Pay it off as fast as possible. Any small gain you could make on your score is not worth the intrest in this market. Inflation is rising fast and the markets are correcting, now is not the time to hold on to debt.
Welcome @JoeeL
I would place what you have to get any and all accounts down to at least 28%. Then go from there one by one till its all PIF. Any extra place or keep it in savings for any emergencies that pop up and you'll know its there in the bank. Then there wont be any repeat performances. You'll have some back up. JMO.
@JoeeL wrote:Hello, just want to start by thanking everyone who chimes in with advice.
I'm 28 with about $60,000 worth of credit card debt. About 80% of it has come from the last few years, and trying to make it by (like so many others). I have always maintained a 750+ score but with the high utilization rate (90%) my score has dropped to 640-650. Before the NEED to use these cards my balance was never more than 10%.
Bouncing back from COVID related issues my wife and I have been able to save up enough to pay all of that debt in full. My question is what's the best way to do it? Do I want to pay all of my cards off in one lump sum and go to a $0 balance on everything? Or is there a better strategy to get the most gains of out my score? I've read a few things saying pay it all, but I don't want my limits to dramatically decrease, nor do I want to only obtain a small gain in my score.
I was good on building my credit to what it was but I feel like I'm "lost" on it now.
Any advice would be greatly appreciated.
Pay it all off as fast as you can.
Welcome to the forums! You came to the right place, there's a lot of knowledgeable people here who can provide you with excellent advice on your situation (some of whom already have!).
My two cents: you should pay down as much of your CC debt down immediately while ensuring that you've got sufficient cash on hand for your other recurring bills, living expenses, and -- if possible -- a small cushion against unexpected events. If you and your wife have got a pot of $100,000 saved up, for instance, it should be no problem to wipe out the whole $60k debt load in a fell swoop... but if you've only got $60k or so to cover the bills, I'd advise a more strategic approach where you pay most of the cards off or down so that you've got your carried balances back down to "healthy" levels right away -- under 30% overall utilization at the very least, with under 10% preferred -- that will bring down your interest charges, reduce your minimum payments and reported DTI, and generally make your revolving debt situation much more manageable while you regroup. This includes your balances under 0% promos (Best Buy and PayPal) -- you may not be accruing interest on those right now, but the high utilization on those lines is still a red flag to your current lenders.
AA in the form of CL reduction ("balance chasing") is probably inevitable, particularly for your Citi cards as they've already done it once... I imagine their algorithms are just chomping at the bit for you to bring the balances down. Pay 'em down anyway, and you can focus on rebuilding your credit lines after your situation has improved and you've demonstrated to the lenders your ability to bounce back to responsible credit management.
[EDIT] Haha, you took care of business while I was writing my reply... good work! I'll leave my comment up to aid others in similar situations.
