User Panel
User Panel
User Panel
|
Posted: 2/21/2023 8:06:49 PM EDT
[#1]
Quoted: I have 4 cards to pay off totaling 20K. For credit reasons, do I: A. Pay off the full balance B. Pay them down below the 30% mark Is one better than the other credit wise ? Do I get gigged for paying them completely off or improved credit if i drop them below the 30% mark, or improved either way ? Pay them all off in full if you can. Debt to credit ratio and on time payments is what affects your credit score. A hard pull of your credit score will also tick it down a couple points each time it's done. Use them, but always pay them off in full each month. If you roll a balance, do it on things like mortgage, home equity line, or vehicle loan, basically things that have collateral against them. |
|
|
|
Posted: 2/21/2023 8:08:43 PM EDT
[#2]
Maybe pay the one with the highest rate first?
 If you're carrying a balance of $20,000 on cards I wouldn't get too caught up in how paying them will effect your credit score. |
|
|
|
Posted: 2/21/2023 8:10:43 PM EDT
[#3]
I paid off the lowest balance card first. I know the math says not to do that, but showing progress in getting rid of that debt is huge motivation.
Then I used the extra cash towards the next highest balance. I paid that off in a couple years and closed the account. Then I paid off the final card to zero, but I kept the account open. I don't let the balance rise more than a couple hundred bucks. If you or someone else has a problem keeping credit card balances under control then pay off the cards and close the accounts. Don't pay it down some and then fall into the trap of charging it right back up. |
|
|
|
Posted: 2/21/2023 8:16:41 PM EDT
[#4]
Quote HistoryQuoted: Maybe pay the one with the highest rate first? If you're carrying a balance of $20,000 on cards I wouldn't get too caught up in how paying them will effect your credit score. Exactly. Pay them off as fast as possible |
|
|
|
Posted: 2/21/2023 8:20:51 PM EDT
[#5]
Pay one at 90% then move to the next. This will help your credit score the most. Obviously pick the higested interest rate first.
|
|
|
|
Posted: 2/21/2023 8:22:21 PM EDT
[#6]
pay the minimum for the rest of your life sounds better.
|
|
|
|
Posted: 2/21/2023 8:27:05 PM EDT
[#7]
Traditional advice is pay off the highest interest rate first but in reality I'd pay the one that accrues the most interest charges each month .It may not necessarily be the one with the highest rate due to having a much larger balance.
|
|
|
|
Posted: 2/21/2023 8:30:18 PM EDT
[#8]
Ignore the very short term credit score change (if any). Pay off the highest interest first, then down the line. Once you are paid off, never carry a balance (pay in full every month). Also, don’t cancel any cards.
|
|
|
|
Posted: 2/21/2023 8:31:28 PM EDT
[#9]
Depends on a lot of things
But eat ramen and pay it off as soon as you can |
|
|
|
Posted: 2/21/2023 8:31:41 PM EDT
[#10]
Pay off the lowest first then snowball that payment to the next lowest and so forth.
|
|
|
|
Posted: 2/21/2023 8:32:27 PM EDT
[#11]
Depending on the interest %'s, it might be worth getting a consolidation loan and just making the one payment per month.
|
|
|
|
Posted: 2/21/2023 8:34:21 PM EDT
[#12]
Quote HistoryQuoted: Ignore the very short term credit score change (if any). Pay off the highest interest first, then down the line. Once you are paid off, never carry a balance (pay in full every month). Also, don't cancel any cards. 1. percent of debt to total available credit - If you make some big payments to a smaller one, it is almost assured that they will increase your credit limit. Every time I buy something big and then pay it off, they raise my limit by a few thousand, it seems. 2. avg length of accounts (longer is good) |
|
|
|
Posted: 2/21/2023 8:34:50 PM EDT
[#13]
Quote HistoryQuoted: I paid off the lowest balance card first. I know the math says not to do that, but showing progress in getting rid of that debt is huge motivation. Then I used the extra cash towards the next highest balance. I paid that off in a couple years and closed the account. Then I paid off the final card to zero, but I kept the account open. I don't let the balance rise more than a couple hundred bucks. If you or someone else has a problem keeping credit card balances under control then pay off the cards and close the accounts. Don't pay it down some and then fall into the trap of charging it right back up. 
|
|
|
|
Posted: 2/21/2023 8:36:37 PM EDT
[#14]
Just pay them all off if you have the cash.
Why keep paying interest? |
|
|
|
Posted: 2/21/2023 8:37:49 PM EDT
[#15]
Quote HistoryQuoted: Pay one at 90% then move to the next. This will help your credit score the most. Obviously pick the higested interest rate first. Credit score doesn’t matter in this case. OP isn’t going to finance a car while trying to pay down debt. And the EE is your friend. |
|
|
|
Posted: 2/21/2023 8:39:31 PM EDT
[#16]
Pay them off in full right away. Don’t overthink this.
|
|
|
|
Posted: 2/21/2023 8:44:11 PM EDT
[#17]
Quote HistoryQuoted: Pay one at 90% then move to the next. This will help your credit score the most. Obviously pick the higested interest rate first. There is no reason to leave a balance and pay interest. If you have the discipline, make a few small purchases and pay the card in full each month. Do this with all the cards one by one. I have no idea why people think you have to pay interest to get get a good FICO score. The amount of interest you pay, is not I. The current FICO model. Your CC company may offer a free score and they will tell you what you can do to get a better score. |
|
|
|
Posted: 2/21/2023 8:46:27 PM EDT
[#18]
Quote HistoryQuoted: Depending on the interest %'s, it might be worth getting a consolidation loan and just making the one payment per month. A consolidation loan makes sense if you have the discipline to pay off the cards every month. A lot of people get the loan and then run up a new balance. |
|
|
|
Posted: 2/21/2023 8:50:50 PM EDT
[#19]
OP, why does credit score matter, are you trying to finance a Dodge Challenger 392 with $20k in credit card debt?
|
|
|
|
Posted: 2/21/2023 8:51:10 PM EDT
[#20]
Never carry a balance unless it's 0% interest.
|
|
|
|
Posted: 2/21/2023 8:59:20 PM EDT
[#21]
pick the one with smallest balance, pay it off and close it.
then pick the one with the highest interest, pay it off and close it. do this for ALL 4 cards. by the time you are down to the last card and almost paid it off, you'll get offers for a zero interest card. pay off last one and close it, then open new card with zero interest and plan to pay if off each month. |
|
|
|
Posted: 2/21/2023 9:01:28 PM EDT
[#22]
At 20K on the cards, I would pay that all off, who cares what it does to your score right at that point. It will stabilize a month out anyhow.
|
|
|
|
Posted: 2/21/2023 9:02:11 PM EDT
[#23]
Quote HistoryQuoted: pick the one with smallest balance, pay it off and close it. then pick the one with the highest interest, pay it off and close it. do this for ALL 4 cards. by the time you are down to the last card and almost paid it off, you'll get offers for a zero interest card. pay off last one and close it, then open new card with zero interest and plan to pay if off each month. Never close or cancel credit cards. |
|
|
|
Posted: 2/21/2023 9:04:34 PM EDT
[#24]
Pay them off - every month. I've not carried a balance on my credit cards in 25+ years. My credit score is just fine.
|
|
|
|
Posted: 2/21/2023 9:05:14 PM EDT
[#25]
Credit cards are the debil...
|
|
|
|
Posted: 2/21/2023 9:06:52 PM EDT
[#26]
I haven't carried a balance in forever. Citi says my FICO is 868.
|
|
|
|
Posted: 2/21/2023 9:07:34 PM EDT
[#27]
If you have the cash to pay them off, pay them all off. No reason to carry a balance and pay interest when it does nothing for your credit score.
If you can't afford to pay them all off, start off by focusing on the one with the lowest balance then continue doing so. |
|
|
|
Posted: 2/21/2023 9:09:31 PM EDT
[#28]
Quote HistoryQuoted: Credit cards are the debil... Not true...but misusing them can be pure hell. |
|
|
|
Posted: 2/21/2023 9:12:54 PM EDT
[#29]
I was there once. Never again.
|
|
|
|
Posted: 2/21/2023 9:18:59 PM EDT
[#30]
Quote HistoryQuoted: I haven't carried a balance in forever. Citi says my FICO is 868. Which FICO are they looking at. FICO 8 is used for car loans and a perfect score is 850. You have an excellent credit score but they may not be quoting a common FICO or they may be using another system. I think some of the scores go to 900. |
|
|
|
Posted: 2/21/2023 9:28:20 PM EDT
[#31]
Quote HistoryQuoted: OP, why does credit score matter, are you trying to finance a Dodge Challenger 392 with $20k in credit card debt? He's trying to finance some rims from one of those "rent wheels by the week" places. |
|
|
|
Posted: 2/21/2023 9:49:33 PM EDT
[#32]
Pay that shit off!
Carrying credit card debt BY CHOICE is beyond retarded. I can’t believe anyone who graduated third grade would need to ask such a question. |
|
|
|
Posted: 2/21/2023 9:52:22 PM EDT
[#33]
Tax season is usually a good time to get out of the poors cycle.
Coming from a former tax time poor. Now I am poor after tax time
|
|
|
|
Posted: 2/21/2023 9:55:53 PM EDT
[#34]
First start with the 30% on as many cards as you can then start dropping them 1 by 1. 10% or less doesn't usually hurt your credit.
But paying them off 1 by 1 in my experience doesn't increase your score nearly as fast as dropping multiple to 30% at 1 time. On top of that as you drop them down the minimum payments become less meaning a tight pay week won't hurt as bad. Or just pay the minimum on one one month to add the additional to another card. |
|
|
|
Posted: 2/21/2023 9:56:59 PM EDT
[#35]
Holy shit. Burn all of those cards.
|
|
|
|
Posted: 2/21/2023 9:57:29 PM EDT
[#36]
I had a card with a $5000 limit, and that's what I had on it. I paid it down to zero, each month when I use it, I pay it off. As far as my credit, I don't care, the house is paid off, vehicles are paid off nothing on my property is on credit.
|
|
|
|
Posted: 2/21/2023 10:00:00 PM EDT
[#37]
Quote HistoryQuoted: Never close or cancel credit cards. Quote HistoryQuoted: Quoted: pick the one with smallest balance, pay it off and close it. then pick the one with the highest interest, pay it off and close it. do this for ALL 4 cards. by the time you are down to the last card and almost paid it off, you'll get offers for a zero interest card. pay off last one and close it, then open new card with zero interest and plan to pay if off each month. Never close or cancel credit cards. Why? You don't need a dozen credit cars. I cancelled ones that didn't make sense any more and settled on a couple that I like. Been over 800 for years. |
|
|
|
Posted: 2/21/2023 10:00:51 PM EDT
[#38]
Get a card that has a 0% balance transfer offer. Transfer all debt. Pay it off over the time of the 0% offer. Citi just sent me one for 18 months.
|
|
|
|
Posted: 2/21/2023 10:03:03 PM EDT
[#39]
How about this. Quit using them, pay them all off and get out of debt. Rack up $20,000 in cash in the bank and start carrying $500 in your wallet every day. Use your credit cards to only buy gas and lunch, pay them off in full every month. See how that feels. And stay out of debt.
|
|
|
|
Posted: 2/21/2023 10:04:39 PM EDT
[#40]
There is never a benefit to carrying a balance.
|
|
|
|
Posted: 2/21/2023 10:08:56 PM EDT
[#41]
Quote HistoryQuoted: pay the minimum for the rest of your life sounds better. If you have a zero percent interest account that's not a bad idea! I've never had one be at zero for more than a few years (the minimum payment wiped out the balance) |
|
|
|
Posted: 2/21/2023 10:17:01 PM EDT
[#42]
Quote HistoryQuoted: First start with the 30% on as many cards as you can then start dropping them 1 by 1. 10% or less doesn't usually hurt your credit. But paying them off 1 by 1 in my experience doesn't increase your score nearly as fast as dropping multiple to 30% at 1 time. On top of that as you drop them down the minimum payments become less meaning a tight pay week won't hurt as bad. Or just pay the minimum on one one month to add the additional to another card. Payoff the cards in full one by one. They talk about 30% credit utilization and some say on each card, others say your total utilization for all cards. What some don’t understand is they count your balance as of the closing date even if you pay the balance the next day. For example, you have a $10,000 credit limit with a $3,300 balance when the statement closes. You pay the entire balance the next day. You have a 33% credit utilization. If you paid $1,400 the day before the statement closes, you would have a $1,900 balance and a 19% credit utilization. If you don’t pay the card off in full, you will pay interest on your balance for each day of the statement period. There is no grace period like there woukd be if you started with a zero balance. You will pay a lot of interest on the account that you could have avoided. Nerd wallet article. |
|
|
|
Posted: 2/21/2023 10:20:12 PM EDT
[#43]
Quote HistoryQuoted: Get a card that has a 0% balance transfer offer. Transfer all debt. Pay it off over the time of the 0% offer. Citi just sent me one for 18 months.  Attached File |
|
|
|
Posted: 2/21/2023 10:20:25 PM EDT
[#44]
Quote HistoryQuoted: pay the minimum for the rest of your life sounds better. Hookers and blow is a better idea IMO. |
|
|
|
Posted: 2/21/2023 10:20:56 PM EDT
[#45]
I reified my house to a lower interest rate last march. My credit score took a pretty big hit, I guess because I lost the loan history of my old loan and created a new one. I wasn't exactly happy about it but a google search said it would come back. As of 2 months ago, it reached the score it was before I reified.
Moral of the story, it might take a bit, but your score will bounce back. |
|
|
|
Posted: 2/21/2023 10:21:25 PM EDT
[#46]
Pay them off but don’t close them. Closing them will tank your credit.
My advice is to follow Dave Ramsey’s plan and pay the minimum on all but the lowest balance. Pay that one off first then, once it’s paid off, add whatever you were paying on that one to the next lowest, and so on till they’re all paid off. If you can pay them all off right now without putting yourself in a bind do it, but again, don’t close them. I wouldn’t dump my emergency fund into them but I would get them paid off ASAP. If you don’t have an emergency fund I would build that before paying the cards off. I use my chase card like a check book. I pay all my bills with it and then pay it off before the reporting date (this is different than the statement date and they can tell you what that window is). I do it because they pay me 1.5 to 5% cash back while my bank pays less than .5% interest. Once you pay them off your credit will jump up some and if you use them and pay them off before they report, it will stay up and even increase. If you close them your credit will take a big hit that could take years to reverse. I know this because the only card we had (BOA) closed our account with no warning and destroyed our credit. It took years to get it back into the 800’s after opening the Chase card account. I’ve learned a lot since then about how credit cards report and how they affect your credit. The short version is: using them is bad and not using them is bad lol. |
|
|
|
Posted: 2/21/2023 10:23:45 PM EDT
[#47]
To answer your original question, I don't see any penalty to paying off a card 100%. I do lose a couple of points if I run up a big balance in a month, but it pops back up when I pay it off w/o paying interest.
It's generally a bad decision to finance stuff with a credit card; if it's worth financing, there's probably another way to borrow money with lower interest rates. However the way to get out of debt the quickest is to make good decisions. 1. sell stuff you don't need and turn it into money (you got into debt somehow, did you really need that stuff?) 2. don't buy stuff you don't absolutely need (expensive hobbies, fine dining, etc) 3. get a higher paying job / extra job / overtime is a good idea, if you can swing it. 4. make big payments, to the highest % rate card first 5. don't look at individual card balances as a measure of your progress. look at the total you owe. get quicken or some kind of personal finance software, you can clearly see your progress each month. It's going to be faster if you pay off the high interest debt first. Use the graphing capability of the software to stroke your ego if you must. #4 and #5 are going to make Dave Ramsey shake with rage, but do you want to make yourself feel good or get rid of your debt? If you have a steady job and plan to be around for a while, buying a house and not paying rent is an excellent way to build wealth. Buying new cars is (usually) an excellent way to dissipate wealth. |
|
|
|
Posted: 2/21/2023 10:29:07 PM EDT
[#48]
Quote HistoryQuoted: Why? You don't need a dozen credit cars. I cancelled ones that didn't make sense any more and settled on a couple that I like. Been over 800 for years. On the other hand, when you close a line of credit, 2 things happen. You lose your "good" active history. It didn't leave any bad marks on your record, but it is no longer considered as active. The second thing is that your balance to income ratio grows. That is, the utilization rate of your current available credit, goes up (because you have less available credit to use). You might argue that 0 utilization is better than utilization. Just leave them open and never use them or always pay them off every month. It isn't the "best" thing for your score. A lender doesn't want to see 0% utilization on an open line of credit...because that lender isn't making any money. Keeping a zero balance month to month for a long time is great for your bank account, but not the best for your score. Not saying have 20 open credit cards or saying pay interest, just for you score. Saying there isn't a perfect answer at all times and closing a paid off card, does have a negative impact on your score temporarily. The length of time that impact will last.....nobody fucking knows or will tell you. |
|
|
|
Posted: 2/21/2023 10:37:22 PM EDT
[#49]
There’s no benefit to a revolving credit balance, with how high the fees are. Keeping CCs open with available credit ups your credit score.
|
|
|
|
Posted: 2/21/2023 10:40:07 PM EDT
[#50]
Quote HistoryQuoted: There's no benefit to a revolving credit balance, with how high the fees are. Keeping CCs open with available credit ups your credit score. |
|
|
Win a FREE Membership!
Sign up for the ARFCOM weekly newsletter and be entered to win a free ARFCOM membership. One new winner* is announced every week!
You will receive an email every Friday morning featuring the latest chatter from the hottest topics, breaking news surrounding legislation, as well as exclusive deals only available to ARFCOM email subscribers.
AR15.COM is the world's largest firearm community and is a gathering place for firearm enthusiasts of all types.
From hunters and military members, to competition shooters and general firearm enthusiasts, we welcome anyone who values and respects the way of the firearm.
Subscribe to our monthly Newsletter to receive firearm news, product discounts from your favorite Industry Partners, and more.
Copyright © 1996-2024 AR15.COM LLC. All Rights Reserved.
Any use of this content without express written consent is prohibited.
AR15.Com reserves the right to overwrite or replace any affiliate, commercial, or monetizable links, posted by users, with our own.
