Quick question regarding paying down credit cards. I have had about 10 cards maxed out over the last 10 or so months. I have never missed a payment, I am about to pay them down / off. My credit score has obviously dropped just due to the utilization rate of each card, and I fully expect my score to go up quite a bit. Again, never had a missed payment.
My situation is I have enough to pay off all but 2 cards. Both of which my balance is promo 0% until end of summer. Do I pay all but those two cards off or do I spread it around and drop all cards to a less than 20% usage? Obviously I would save more money by paying off all but the two, but what would benefit my credit score better? Thanks for any help!
Last App: May 9, 2022 | Last HP: May 9, 2022 | Gardening since: May 9, 2022 | Last updated: May 15, 2022
I guess short term. I'm just tired of seeing a low credit score and have fears that issuers will start closing my credit lines. I've already had havertys (synchrony) close an account for no reason. 100% on time payments and I always paid more than minimum. They closed it during my 0% 18 month purchase promo. Lowered my credit line twice as I made payments then closed it. I don't really have a "need" for credit at this time. No major purchases coming up. I am trying to obtain an Amex at some point for a travel card.
in the case you cannot pay off the remaining two this summer, pay off balances of all the other cards. if the other cards are at zero it will give you options for a new 0% balance transfer.
otherwise I would pay the two down to at least 87% util, so they are not "maxed." then pay off as many of the others as possible.
So based on your feedback and reading some other topics it seems at the very least those two need to be paid down below 87%. Is this because anything over that is considered maxed and they look at this different and potentially will close the account? Can you explain how that works? I assume it would just make them less likely to take action and start closing accounts. Thanks. What time frame do they start doing this once cards sit "maxed"
@Arcreactors wrote:Quick question regarding paying down credit cards. I have had about 10 cards maxed out over the last 10 or so months. I have never missed a payment, I am about to pay them down / off. My credit score has obviously dropped just due to the utilization rate of each card, and I fully expect my score to go up quite a bit. Again, never had a missed payment.
My situation is I have enough to pay off all but 2 cards. Both of which my balance is promo 0% until end of summer. Do I pay all but those two cards off or do I spread it around and drop all cards to a less than 20% usage? Obviously I would save more money by paying off all but the two, but what would benefit my credit score better? Thanks for any help!
For credit score purposes it's best to pay those 2 down to 28% or at least down to 48%
@Arcreactors wrote:So based on your feedback and reading some other topics it seems at the very least those two need to be paid down below 87%. Is this because anything over that is considered maxed and they look at this different and potentially will close the account? Can you explain how that works? I assume it would just make them less likely to take action and start closing accounts. Thanks. What time frame do they start doing this once cards sit "maxed"
Well, as you have seen, banks such as Sync may react unfavorably when they see a cardholder with high utilization elsewhere. So even for the remaining list of cards, some banks are more likely to balance chase as your balances come down, although there are no hard and fast rules about when banks might or might not respond to high utilization.
Can you list out the banks where you have your balances, which you intend to pay down, which you intend to continue taking advantage of the 0% funding. All else being equal, it's probably better to keep the 0% balances where they are, but to answer your original question there may be some specific amounts that can be sorted out to best improve your score.
in my debt payoff journey I took the finances > fico mindset. I have had maxed out cards due to balance transfers. the $ saved in interest from a 0% promo was more beneficial to me than the few points I would lose for maxing out. in fact, paying off all my cards except one or two gave such a boost in score that the points for being maxed out didn't even matter. I never had any adverse action LIKELY because of my perfect payment history. if your history is perfect I wouldn't worry about accounts closing. you mentioned synchrony closing, but that is more a "synchrony thing" than a you thing. it happened to a lot of people without warning.
check out this post for some details about thresholds.
I'm in a fairly similar situation and chose the path of saving interest over scoring. At first I was just paying down current balances and getting below %90, %70, %50 and %30 on individual cards made a huge difference in scoring. Eventually I paid down my balances as much as I could afford and my scores went up to over 800 (was still around %50 UTIL overall) but I was paying a lot of interest on balances. Decided to go the finances over fico route, took some HPs and dings for new accounts. Transfered balances over to the new accounts so now I'm not paying interest and dealt with the score drops of one account showing %83 UTIL and another showing %56.
If you post your balances and interest rates it'll help with suggestions. If you pay off your cards that you're paying interest on will you still be able to pay off the %0 interest cards before that %0 interest ends?
@JFox418 wrote:I'm in a fairly similar situation and chose the path of saving interest over scoring. At first I was just paying down current balances and getting below %90, %70, %50 and %30 on individual cards made a huge difference in scoring. Eventually I paid down my balances as much as I could afford and my scores went up to over 800 (was still around %50 UTIL overall) but I was paying a lot of interest on balances. Decided to go the finances over fico route, took some HPs and dings for new accounts. Transfered balances over to the new accounts so now I'm not paying interest and dealt with the score drops of one account showing %83 UTIL and another showing %56.
If you post your balances and interest rates it'll help with suggestions. If you pay off your cards that you're paying interest on will you still be able to pay off the %0 interest cards before that %0 interest ends?
You had scores over 800 with aggregate revolving utilization over 50%??? That is astounding to me.