Should I pay down or Pay it All?

[lshwn]

I have $5K to pay down some cc debt.  I have about $30K in total debt.  Should I spread the $5K across cards or simply pay down $500-1000 on a few card?  Or should I just keep the $5K for emergencies and continue paying down my cc debt.  

My FICO (8) score is 616 and I want to improve my credit as I have been dealing with job uncertainty and underemployment for almost 3 years.

Great news! I have no more student loan debt to worry about.

Neiman Marcus	$1,945
MCU credit card	$3,300
Target	$1,200
Credit One	$2,000
Discover	$3,800
Capital One Savor	$420
Visa	$1,950
Nordstrom	$1,900 (already in a paymen plan)
BOA credit card	$1,500
Macy's	$4,300
Credit One	$1,233
Capital One Business Visa	$2,900
Capital One Visa	$1,200
Capital One Visa	$1,700

[NoMoreE46]

It would more helpful if you would include the credit limits on each of those.

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@lshwn wrote:

I have $5K to pay down some cc debt.  I have about $30K in total debt.  Should I spread the $5K across cards or simply pay down $500-1000 on a few card?  Or should I just keep the $5K for emergencies and continue paying down my cc debt.  

My FICO (8) score is 616 and I want to improve my credit as I have been dealing with job uncertainty and underemployment for almost 3 years.

Great news! I have no more student loan debt to worry about.

Neiman Marcus	$1,945
MCU credit card	$3,300
Target	$1,200
Credit One	$2,000
Discover	$3,800
Capital One Savor	$420
Visa	$1,950
Nordstrom	$1,900 (already in a paymen plan)
BOA credit card	$1,500
Macy's	$4,300
Credit One	$1,233
Capital One Business Visa	$2,900
Capital One Visa	$1,200
Capital One Visa	$1,700

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[lshwn]

Most are at 75% utilization if not maxxed out.

[Vinjints]

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@lshwn wrote:

... I have been dealing with job uncertainty and underemployment for almost 3 years.

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Your ability to withstand lack of income should be your priority over a credit score atm. How long are you able to provide food and housing without the 5k?

[lshwn]

Interesting point.  I have two jobs (FT and PT remote) so I want to bring down debt so I can have cash readily available.  The amount of I am spending to pay off debt per month is a lot - especially considering my highest cc is about $4000.  I want to bring my monthly expenses down more than anything.   But improving my credit score is also a bonus so I hope to purchase an apartment in the next 24 months.

[FicoMike0]

From a finance point of view you should pay the highest interest account first.

From a score standpoint, you want to get utilizations down. The thresholds are at 29%, 49%, 69% and 89%. You're scored on the highest account so pay those first. If you have an account over 89%, that's considered maxed and you're taking a big score hit. A maxed account also puts you at risk of balance chasing. You're wise to get ahead of that.

If you list limits to go with the balances, someone will tell you exactly where to put the money.

If all accounts have about the same outrageous interest rate, just go for utilization reduction, the finance part will take care of itself.

Best of luck

[FicoMike0]

If any card is with synchrony, they seem to balance chase a lot.

You could also help utilization by asking for limit increases, but if you're carrying high util, you probably won't get one. 

[lshwn]

Thank you!  The threshold percentages definitely help me to figure this out.  I definitely won't get any increases to help with utilization.

[FicoMike0]

Utilization is a big score driver. The good part is, if you improve it, your scores will respond the next time the account posts, util has no memory.

You mentioned one account is in a payment plan. How did that work? Did they freeze the account and drop the interest to something reasonable? 

[lshwn]

The closed the account and dropped the interest rate.  I was thinking of offering a payment to completely settle this account but I'm guessing that would put me back at square one and maybe not worth it.  So I will keep paying it monthly.