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Spreading High Balance Cards to Lower Card Utilization

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Super Contributor

Re: Spreading High Balance Cards to Lower Card Utilization

Taking the 7 cards at > 50% utilization all down below 48.9% is the best way to go here.  After that, taking them all down below 28.9% is the next step.  Spreading any of those balances out across 8+ revolvers would just be rearranging deck chairs on the Titanic.

Message 11 of 14
Super Contributor

Re: Spreading High Balance Cards to Lower Card Utilization


@BrutalBodyShots wrote:

Taking the 7 cards at > 50% utilization all down below 48.9% is the best way to go here.  After that, taking them all down below 28.9% is the next step.  Spreading any of those balances out across 8+ revolvers would just be rearranging deck chairs on the Titanic.


If any of the cards are carrying interest at over 12% APR, and cards with zero balance potentially have lower cost APR options, looking at where those balances are carried while being paid down makes good financial sense, even if some of those cards end up over 50% but get lower APR options.

 

To dismiss the APR out of hand, in favor only of the utilization on each card, is an incorrect view of the real financial cost of carrying debt.

 

No one pays you anything for a better FICO score. On the other hand, paying less in interest each month is a direct financial gain to the debt payer.

High Bal Jan 2009 $116k on $146k limits 80% Util.
Oct 2014 $46k on $127k 36% util EQ 722 TU 727 EX 727
April 2018 $18k on $344k 5% util EQ 806 TU 810 EX 812
Jan 2019 $7.6k on $360k EQ 832 TU 839 EX 831
Message 12 of 14
Super Contributor

Re: Spreading High Balance Cards to Lower Card Utilization

I agree that less debt is > FICO scores, no doubt.  The OP however suggested that he was looking toward score-improvement... which of course doesn't always directly follow saving money on interest.  Certainly I would never suggest greater debt in order to maximize FICO scores, but my response was one in line with what the OP was looking for.

Message 13 of 14
Super Contributor

Re: Spreading High Balance Cards to Lower Card Utilization


@BrutalBodyShots wrote:

I agree that less debt is > FICO scores, no doubt.  The OP however suggested that he was looking toward score-improvement... which of course doesn't always directly follow saving money on interest.  Certainly I would never suggest greater debt in order to maximize FICO scores, but my response was one in line with what the OP was looking for.


I take the term "Credit Health" to relate also to how much one is paying for credit. Having been through the challenges of covering several hundred dollars per month of interest cost, it can be a relevant point.

High Bal Jan 2009 $116k on $146k limits 80% Util.
Oct 2014 $46k on $127k 36% util EQ 722 TU 727 EX 727
April 2018 $18k on $344k 5% util EQ 806 TU 810 EX 812
Jan 2019 $7.6k on $360k EQ 832 TU 839 EX 831
Message 14 of 14
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