New here! What do do with credit cards to help our score?

[brbmake]

Hello,

This has probably been asked a bunch of times, but looking for info.  Here is the situation. Hubby and I have 3 credit cards.  Well, I have 2 that are mine and we have 1 joint one.  We have worked very very hard to get our credit scores up from being young and dumb.  His is about a 703 right now and I am about a 680.  (yes, those are up, even though still not where I want them).  Couple questions:

1. My 2 cards are capital ones with 23.65% interest and our joint one is a USAA with 16.9%.  I asked both places if they would lower the interest on their cards and they won't. They said we can apply for new cards with lower interest, but they won't lower them.  Is it better to just pay them off (never a late payment, but we have a higher ratio of use than we'd like) and keep them because the longer the account is open the better, or should we try to apply for cars with lower interest? 

2.  The USAA will allow us to transfer to their card and charge only that portion 0% interest for 2 years, but doing so would max that card out.  Yes or no?

Looking for all advice as we are hoping to buy a house for the first time in the next 18 months and want to have our credit be as awesome as possible.  We have nothing negative on our credit report other than high utilization. 

[Anonymous]

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@brbmake wrote:

Hello,

This has probably been asked a bunch of times, but looking for info.  Here is the situation. Hubby and I have 3 credit cards.  Well, I have 2 that are mine and we have 1 joint one.  We have worked very very hard to get our credit scores up from being young and dumb.  His is about a 703 right now and I am about a 680.  (yes, those are up, even though still not where I want them). Couple questions:

1. My 2 cards are capital ones with 23.65% interest and our joint one is a USAA with 16.9%.  I asked both places if they would lower the interest on their cards and they won't. They said we can apply for new cards with lower interest, but they won't lower them.  Is it better to just pay them off (never a late payment, but we have a higher ratio of use than we'd like) and keep them because the longer the account is open the better, or should we try to apply for cars with lower interest?  If you do close your oldest accounts do not worry, they should report up to 10 years and will be included in your Average Age of Account (AAoA) calculation. If your current cards are not working for you there is no harm in getting better ones. My oldest account is Capital One-will be 20 next year (how did that happen???) and they have been great to me. I really enjoy still having an active card that I opened when I was 18 but thats just me. And it has 10.9% fixed interest which helps. But just think, if you open an account now, in ten years when your closed Capital One card falls off, its replacement card will now be 10....so do not get too hung up on that. 

2.  The USAA will allow us to transfer to their card and charge only that portion 0% interest for 2 years, but doing so would max that card out.  Yes or no? No. USAA is sexy as all get up, but they will not allow product changes or credit line combinations.

Looking for all advice as we are hoping to buy a house for the first time in the next 18 months and want to have our credit be as awesome as possible.  We have nothing negative on our credit report other than high utilization. High utilization is a score killer. The best thing you can do for yourselves is to pay down some debt. You did not mention what your total credit lines are or your balances. But if it is a higher credit line you are seeking you should look into joining Navy Federal Credit Union (if you have USAA you should be able to join NFCU). They are known to give out high credit lines. Do not utilize the full limit; but having that extra available credit line can help your overall utilization. They also have a 6.74% Platinum card so it is a win-win.

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[Anonymous]

I would definately pay those things off so you can stop paying that high interest!

Once you pay them off, you can continue to use them if you want but make sure to pay them in full before each statement.  Sometimes when you have high balances, they up their interest rates to collect more money from you (knowing that some can't pay in full) because they know you'll be paying the minimum for several months. 

Do not do a BT, you will max your CL and will look bad on your credit.

[Anonymous]

Paying off debt should always be your #1 priority.  Doing so will not only help your credit scores, but also put you in a much better position to be applying for that mortgage in the future.

[brbmake]

Thanks for the help! Our credit lines are as follows: Cap Visa: $4000 credit line, $2800 balance, Cap MC: $6000 CL, $4000 balance, USAA: $7200 CL, $3500 balance. 

[SouthJamaica]

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@brbmake wrote:

Hello,

This has probably been asked a bunch of times, but looking for info.  Here is the situation. Hubby and I have 3 credit cards.  Well, I have 2 that are mine and we have 1 joint one.  We have worked very very hard to get our credit scores up from being young and dumb.  His is about a 703 right now and I am about a 680.  (yes, those are up, even though still not where I want them).  Couple questions:

1. My 2 cards are capital ones with 23.65% interest and our joint one is a USAA with 16.9%.  I asked both places if they would lower the interest on their cards and they won't. They said we can apply for new cards with lower interest, but they won't lower them.  Is it better to just pay them off (never a late payment, but we have a higher ratio of use than we'd like) and keep them because the longer the account is open the better, or should we try to apply for cars with lower interest? 

Yes pay them off and keep them. Don't pay interest any more.

2.  The USAA will allow us to transfer to their card and charge only that portion 0% interest for 2 years, but doing so would max that card out.  Yes or no?

Yes it would;  don't max your card out.

Looking for all advice as we are hoping to buy a house for the first time in the next 18 months and want to have our credit be as awesome as possible.  We have nothing negative on our credit report other than high utilization. 

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[Anonymous]

So you're currently at 60% aggregate utilization with 2 out of 3 of your credit lines at 67%-70% utilization.  You should definitely put a plan in place to get those paid down/off ASAP.