Paying off credit debt

[03coloradowrangler]

Need some advice from some others on paying off credit debt, just a bit unsure on my thoughts on the smartest way to go about it from a credit score # benefit standpoint.

card #1 has the lowest total balance with lowest APR (credit union card).
card #2 has highest total balance with significantly higher APR (amazon Chase card).

I currently have funding to totally pay off card #2 and also pay down about %70 of card #1's debt. I believe the absolute smartest method here is to get rid of the highest APR first obviously.

Using card #2 as a example, does it benefit my credit score any way to totally pay it off in signifiant large chunks for 2-3 months or should I just do a one time lump sum payment all at once and forget about it?

feel like im overthinking this whole credit score business number game.

 

[Apparition]

Pay the one off that costs you the most first.

Don’t worry about carrying a balance for credit.

You’ll enjoy life more with no debt.

 

[DEValken]

Credit score cares about what your usage is... if you have the capital to pay it off now and it doesn't hurt your cash flow I would recommend paying it off now.

If cash flow will be hurt, get it under 10% usage and work from there.

 

[inkedrose]

High interest hurts more than a few credit points. Pay off high interest, make regular payments on low credit. They are looking for consistent payments a(pay off monthly for zero interest) and always carry less than 10% usage

 

[Zorba]

Credit scores are a fucking game, and only the BANKS win. Thought I'd get a "90 days same as cash" deal on about $5K. Credit score hovers around 830 or so, no debt, etc, etc. Was turned down because I "Didn't have a mortgage loan in the last 12 months". Whatever.

 

[Apparition]

Credit scores are a fucking game, and only the BANKS win it. Thought I'd get a "90 days same as cash" deal on about $5K. Credit score hovers around 830 or so, no debt, etc, etc. Was turned down because I "Didn't have a mortgage loan in the last 12 months". Whatever.

I used to stop at Cabelas and get 20% off coupons for doing credit apps. I always paid cash for everything so I had no credit. Saved a lot of money doing that.

Finally needed a credit card and Walmart was the only one i could get.

Hard to rent apartments with no credit.

 

[CMBD]

I just got a new CC that is 0% for 21 months on balance transfers. Rolled my high interest card on to it and can have it paid off in 12 if I want. I have the cash to pay it off, but this way I get to keep my cash and it doesn't cost me any interest. And when its paid off Ill get rid of it

 

[red02tj]

Slightly different take…
1) Open another credit card with a zero interest balance transfer for 18-21 months. One of these is probably good. https://www.cnbc.com/select/best-balance-transfer-credit-cards/
2) transfer both the balances to the new CC, this let’s you stop paying interest for the next 18-21mo.
3) do the math on the 70% you could put down and spread that over the length of you interest free transfer + you regular take home pay so you can come up with a payment schedule that lets you make regular interest free payments while 1) not adding to CC debt for regular purchases and 2) lets you keep a rainy day fund.

Caveat being you’ve got to have the discipline to not add more CC charges.
Bonus is you will get the benefit of your old cards reporting being paid off and less utilization + the new limit of the transfer card will also reduce the overall utilization and increase your score.

P.S. if you need a short term credit score bump, you can ask your existing cards for a no hard pull credit line increase to reduce your overall utilization.

 

[B1Toad]

Slightly different take…
1) Open another credit card with a zero balance transfer for 18-21 months. One of these is probably good. https://www.cnbc.com/select/best-balance-transfer-credit-cards/
2) transfer both the balances to the new CC, this let’s you stop paying interest for the next 18-21mo.
3) do the math on the 70% you could put down and spread that over the length of you interest free transfer + you regular take home pay so you can come up with a payment schedule that lets you make regular interest payments while 1) not adding to CC debt for regular purchases and 2) lets you keep a rainy day fund.

Caveat being you’ve got to have the discipline to not add more CC charges.
Bonus is you will get the benefit of your old cards reporting being paid off and less utilization + the new limit of the transfer card will also reduce the overall utilization and increase your score.

P.S. if you need a short term credit score bump, you can ask your existing cards for a no hard pull credit line increase to reduce your overall utilization.

I did just that when I was younger, in fact I took the 1 year promo offers and paid them off with other promo offers when they were getting ready to expire. You have to read the fine print carefully though, on most of them if you make one late payment they'll charge you for all the interest from day one. It really makes a big difference when there is no interest eating into your payments every month.
Interest is what keeps working folks from ever getting anywhere. I once knew a very successful German guy, I can still hear him as he was pointing his finger and saying "don't pay zee interest, let zumbody elze pay zee interest". He was right.

 

[03coloradowrangler]

Thank you for the suggestions and input.

My balance isnt astronomically high or anything, My concerns are that I work for a home builder and we all know the housing market is getting financially tough, though we are still signing contracts for new holes to be dug in the ground. theres just less going in and id rather be financially prepared to cover my debts when I can rather than shit hit the fan and have a "now what" kind of situation.

Ive got plans in line if the market falls out but luckily our home buyers are all for the most part aging out retirees downsizing, moving closer to to the medical facilities in town & paying cash.

 

[P man]

Not totally on topic but get rid of the credit card debt and don't fall into that trap again!! I am debt free except for a car payment and it feels good. I know people will get on here and say "but you can use them wisely to earn points/save money" and that's fine if you are disciplined with money. I am not disciplined.

 

[DEValken]

@Chris - this is what I got when I first clicked on this in my alerts. WTF?

Paying off credit debt​

Need some advice from some others on paying off credit debt, just a bit unsure on my thoughts on the smartest way to go about it from a credit score #...

---

By 03coloradowrangler
Sep 14, 2023 09:43 PM
4 min. read

---

Need some advice from some others on paying off credit debt, just a bit unsure on my thoughts on the smartest way to go about it from a credit score # benefit standpoint.

card #1 has the lowest total balance with lowest APR (credit union card).
card #2 has highest total balance with significantly higher APR (amazon Chase card).

I currently have funding to totally pay off card #2 and also pay down about %70 of card #1's debt. I believe the absolute smartest method here is to get rid of the highest APR first obviously.

Using card #2 as a example, does it benefit my credit score any way to totally pay it off in signifiant large chunks for 2-3 months or should I just do a one time lump sum payment all at once and forget about it?

feel like im overthinking this whole credit score business number game.

Credit scores are a fucking game, and only the BANKS win it. Thought I'd get a "90 days same as cash" deal on about $5K. Credit score hovers around 830 or so, no debt, etc, etc. Was turned down because I "Didn't have a mortgage loan in the last 12 months". Whatever.

I used to stop at Cabelas and get 20% off coupons for doing credit apps. I always paid cash for everything so I had no credit. Saved a lot of money doing that.

Finally needed a credit card and Walmart was the only one i could get.

Hard to rent apartments with no credit.
I just got a new CC that is 0% for 21 months on balance transfers. Rolled my high interest card on to it and can have it paid off in 12 if I want. I have the cash to pay it off, but this way I get to keep my cash and it doesn't cost me any interest. And when its paid off Ill get rid of it
Slightly different take…
1) Open another credit card with a zero balance transfer for 18-21 months. One of these is probably good. https://www.cnbc.com/select/best-balance-transfer-credit-cards/
2) transfer both the balances to the new CC, this let’s you stop paying interest for the next 18-21mo.
3) do the math on the 70% you could put down and spread that over the length of you interest free transfer + you regular take home pay so you can come up with a payment schedule that lets you make regular interest free payments while 1) not adding to CC debt for regular purchases and 2) lets you keep a rainy day fund.

Caveat being you’ve got to have the discipline to not add more CC charges.
Bonus is you will get the benefit of your old cards reporting being paid off and less utilization + the new limit of the transfer card will also reduce the overall utilization and increase your score.

P.S. if you need a short term credit score bump, you can ask your existing cards for a no hard pull credit line increase to reduce your overall utilization.
Last edited: Yesterday at 7:48 PM

Slightly different take…
1) Open another credit card with a zero balance transfer for 18-21 months. One of these is probably good. https://www.cnbc.com/select/best-balance-transfer-credit-cards/
2) transfer both the balances to the new CC, this let’s you stop paying interest for the next 18-21mo.
3) do the math on the 70% you could put down and spread that over the length of you interest free transfer + you regular take home pay so you can come up with a payment schedule that lets you make regular interest payments while 1) not adding to CC debt for regular purchases and 2) lets you keep a rainy day fund.

Caveat being you’ve got to have the discipline to not add more CC charges.
Bonus is you will get the benefit of your old cards reporting being paid off and less utilization + the new limit of the transfer card will also reduce the overall utilization and increase your score.

P.S. if you need a short term credit score bump, you can ask your existing cards for a no hard pull credit line increase to reduce your overall utilization.

I did just that when I was younger, in fact I took the 1 year promo offers and paid them off with other promo offers when they were getting ready to expire. You have to read the fine print carefully though, on most of them if you make one late payment they'll charge you for all the interest from day one. It really makes a big difference when there is no interest eating into your payments every month.
Interest is what keeps working folks from ever getting anywhere. I once knew a very successful German guy, I can still hear him as he was pointing his finger and saying "don't pay zee interest, let zumbody elze pay zee interest". He was right.
Thank you for the suggestions and input.

My balance isnt astronomically high or anything, My concerns are that I work for a home builder and we all know the housing market is getting financially tough, though we are still signing contracts for new holes to be dug in the ground. theres just less going in and id rather be financially prepared to cover my debts when I can rather than shit hit the fan and have a "now what" kind of situation.

Ive got plans in line if the market falls out but luckily our home buyers are all for the most part aging out retirees downsizing, moving closer to to the medical facilities in town & paying cash.
Not totally on topic but get rid of the credit card debt and don't fall into that trap again!! I am debt free except for a car payment and it feels good. I know people will get on here and say "but you can use them wisely to earn points/save money" and that's fine if you are disciplined with money. I am not disciplined.

 

[Chris]

@Chris - this is what I got when I first clicked on this in my alerts. WTF?

View attachment 457790

Paying off credit debt​

Need some advice from some others on paying off credit debt, just a bit unsure on my thoughts on the smartest way to go about it from a credit score #...

---

By 03coloradowrangler
Sep 14, 2023 09:43 PM
4 min. read

---

Need some advice from some others on paying off credit debt, just a bit unsure on my thoughts on the smartest way to go about it from a credit score # benefit standpoint.

card #1 has the lowest total balance with lowest APR (credit union card).
card #2 has highest total balance with significantly higher APR (amazon Chase card).

I currently have funding to totally pay off card #2 and also pay down about %70 of card #1's debt. I believe the absolute smartest method here is to get rid of the highest APR first obviously.

Using card #2 as a example, does it benefit my credit score any way to totally pay it off in signifiant large chunks for 2-3 months or should I just do a one time lump sum payment all at once and forget about it?

feel like im overthinking this whole credit score business number game.

I used to stop at Cabelas and get 20% off coupons for doing credit apps. I always paid cash for everything so I had no credit. Saved a lot of money doing that.

Finally needed a credit card and Walmart was the only one i could get.

Hard to rent apartments with no credit.
I just got a new CC that is 0% for 21 months on balance transfers. Rolled my high interest card on to it and can have it paid off in 12 if I want. I have the cash to pay it off, but this way I get to keep my cash and it doesn't cost me any interest. And when its paid off Ill get rid of it
Slightly different take…
1) Open another credit card with a zero balance transfer for 18-21 months. One of these is probably good. https://www.cnbc.com/select/best-balance-transfer-credit-cards/
2) transfer both the balances to the new CC, this let’s you stop paying interest for the next 18-21mo.
3) do the math on the 70% you could put down and spread that over the length of you interest free transfer + you regular take home pay so you can come up with a payment schedule that lets you make regular interest free payments while 1) not adding to CC debt for regular purchases and 2) lets you keep a rainy day fund.

Caveat being you’ve got to have the discipline to not add more CC charges.
Bonus is you will get the benefit of your old cards reporting being paid off and less utilization + the new limit of the transfer card will also reduce the overall utilization and increase your score.

P.S. if you need a short term credit score bump, you can ask your existing cards for a no hard pull credit line increase to reduce your overall utilization.
Last edited: Yesterday at 7:48 PM

I did just that when I was younger, in fact I took the 1 year promo offers and paid them off with other promo offers when they were getting ready to expire. You have to read the fine print carefully though, on most of them if you make one late payment they'll charge you for all the interest from day one. It really makes a big difference when there is no interest eating into your payments every month.
Interest is what keeps working folks from ever getting anywhere. I once knew a very successful German guy, I can still hear him as he was pointing his finger and saying "don't pay zee interest, let zumbody elze pay zee interest". He was right.
Thank you for the suggestions and input.

My balance isnt astronomically high or anything, My concerns are that I work for a home builder and we all know the housing market is getting financially tough, though we are still signing contracts for new holes to be dug in the ground. theres just less going in and id rather be financially prepared to cover my debts when I can rather than shit hit the fan and have a "now what" kind of situation.

Ive got plans in line if the market falls out but luckily our home buyers are all for the most part aging out retirees downsizing, moving closer to to the medical facilities in town & paying cash.
Not totally on topic but get rid of the credit card debt and don't fall into that trap again!! I am debt free except for a car payment and it feels good. I know people will get on here and say "but you can use them wisely to earn points/save money" and that's fine if you are disciplined with money. I am not disciplined.

That’s a browser issue. Looks like you’re in reader view.

 

[DEValken]

That’s a browser issue. Looks like you’re in reader view.

Yeah, just noticed the Speedreader posted at the top.

Sorry for the interruption - this thread will now return to the regularly scheduled posts...

 

[Farmergreg]

At 59 I’m in good financial shape best in my life yet my credit rating isn’t as high as it has been.

Discover card shows it and explains what’s changed. Like if you have a big charge on your CC and little available balance left your rating goes down. Doesn’t matter that your history shows you pay the balance off each month.

If you want to get rid of a CC that you don’t use. Credit rating goes down claiming you have less available credit and therefore are using a bigger % of it.

Unfortunately the lending / insurance world lives and dies on credit ratings.

My 2 cents, Pay down the high % one first but keep it open.

 

[CreepinDeth]

Find “7 steps to a 720 credit score”
Download the audio tapes and listen to them to & from work

Thats what helped me in my 20s
I stopped using CCs for 10 years after that
Then when buyin a house, realized I needed to keep a few open and reporting - but no debt needed

We all need to go back to cash
The tracking and surveillance of CC /Debit usage is beyond out of control

 

[freedom_in_4low]

Pay it all off as quickly as you can, keep the accounts open but stash the cards somewhere you don't come across very often...that's the best compromise between your financial well being and your credit score (which are NOT the same). Credit scores are a scam. They just tell the lender how profitable you are to lend to. Don't sweat the score, there are mortgage companies that will work with you on an analysis of your income and assets rather than a credit score.

All that said, I haven't carried a CC balance in 12 years...I have had mortgages and that's it, and credit score is >800.

 

[Zorba]

At 59 I’m in good financial shape best in my life yet my credit rating isn’t as high as it has been.

Discover card shows it and explains what’s changed. Like if you have a big charge on your CC and little available balance left your rating goes down. Doesn’t matter that your history shows you pay the balance off each month.

If you want to get rid of a CC that you don’t use. Credit rating goes down claiming you have less available credit and therefore are using a bigger % of it.

Unfortunately the lending / insurance world lives and dies on credit ratings.

My 2 cents, Pay down the high % one first but keep it open.

Yea, it makes zero sense. I actually dared to use my $20K mastercard to pay for our house re-plumb. Never mind that the CC was paid in full when due, my credit score took a nosedive - and has now returned to normal. And yea - the whole "percentage of credit" bullshit - so if I get MORE credit (that I could charge to the hilt then skip to Rio) that I don't use at all, the score goes up. Its complete bullshit.

 

[Shank]

Transferring to a zero interest card isn't a bad idea as long as you are disciplined not to rack up debt on your current cards or the new one. When I bought my house I bought a few things on zero interest cards (and never anything else) such as furniture. I still have a balance on one item that I can easily pay off, but zero interest, I don't.

When I got out of college I had a fair job and about $3,000 in CC debt. It was harder to get out of than I expected. Now my wife and I pay our cards off every two weeks, when we get paid. It's silly but it lessens the chance of a surprise.

 

[CreepinDeth]

Yea, it makes zero sense. I actually dared to use my $20K mastercard to pay for our house re-plumb. Never mind that the CC was paid in full when due, my credit score took a nosedive -

Was the re-plumb charge (or balance after) in the realm of $6000-$7,000+?? If it was, then thats why

One of the credit scoring lessons I learned
Never ever charge or carry 30% of your credit limit
Its a HUGE hit

Ideally, never carry debt
But even a 30% charge brings a BIG hit