credit cards/credit score!

hbrittingham

Its better to have two cards with lower percentages of the balance in use than to have one charged up and one with nothing. Pay extra on the one with the balance, and use the other sparingly, paying it off every month. Your credit score will be better becasue of it.

^^^^^^knows how credit works!

The higher your balance to available credit is, the more it effects your credit negatively.

FoxyLifter

I would only do it if 1) the balance transfer was free, 2) it carried a 0% interest for x amount of months, AND 3) I could pay off the entire amount owed within those x amount of months. Run the numbers for both scenarios (balance transfer or no balance transfer, it gets complicated with the time value of money) and see what results you get. If you are going to continue using a credit card for purchases, I would not recommend transferring the balance. My advice? Pay the minimum of both credit cards and if you have any money left over after bills, gas, food, other monthly expenses and contributing towards your retirement (401k, for example), then use the rest of your money to pay off the higher interest rate credit card first until it's paid off. Then work on paying off the lower interest rate credit card. The hard part is to stop using the cards. Get out of debt as fast as you can. Paying compound interest stinks, to say the least.

FoxyLifter

Its better to have two cards with lower percentages of the balance in use than to have one charged up and one with nothing. Pay extra on the one with the balance, and use the other sparingly, paying it off every month. Your credit score will be better becasue of it.

^^^^^^knows how credit works!

The higher your balance to available credit is, the more it effects your credit negatively.

Credit scores are tricky. The more UNUSED available credit you have, the better. You have all this "money" available to you but you don't need to use it. That's what looks good. It can get tricky once you get into ratios, but like I said, it's a complicated game.

Fat2Fit_imready

I'm in the middle of trying to pay down my debt right now. Let me just say that getting laid off sucks. So does taking a year to find a job with comparable pay. I had everything paid off before that happened so I'm working my way back to credit card freedom. One thing to remember is that part of your credit score is based on how much credit you have compared to how much of it you have available. Carrying high balances on all of your cards will definitely hurt you. Having lots of available credit and always paying more than the minimum on time is good.

One other factor is whether or not you actually have any revolving debt. About a decade ago my parents bought a new house. My mom's credit score was 802. She was told the reason it wasn't higher was because she had no revolving debt; in other words, she pays everything off at the end of every month. She actually asked me if she shouldn't carry a small balance to up her score. I laughed.

The other thing to remember is that if you don't have a balance on a card and aren't using it, the credit card company won't report anything for that month, good or bad. With that in mind with the one card I have so far paid off I'm paying my Netflix bill each month. I have an automatic payment from my checking account to that credit card to exactly cover the Netflix charge. This way I don't have to think about it and that card is reporting that I'm making payments on time, as well as my available credit and zero balance each month. So when you pay off the higher interest card, don't close it. You want that available credit to be counted as a part of your score.

I've been getting offers of zero percent interest for 15 - 21 months (depending on the offer) on a new card. I've been debating it to use it to transfer the balance of a higher card so I can pay it off more quickly. I haven't bitten yet, though. Slowly, slowly, my credit score has been improving. It's back up over 710 and I was actually able to get a 2.9% interest rate when I bought a car earlier this year. It does take awhile but you CAN do it.

Thank you Sue, i never paid attention to my credit score up until 2 years ago!! One day ill be there ;-) Thanks for your information!!

Fat2Fit_imready

Its better to have two cards with lower percentages of the balance in use than to have one charged up and one with nothing. Pay extra on the one with the balance, and use the other sparingly, paying it off every month. Your credit score will be better becasue of it.

^^^^^^knows how credit works!

The higher your balance to available credit is, the more it effects your credit negatively.

More new info, thank you!!

Fat2Fit_imready

Pay down the one with the highest interest rate, while making minimum payments on the other. In my experience, balance transfers almost always cost money. It's usually not worth it, so I wouldn't worry about it.

Carrying credit card debt simply to "build your credit" is not wise. I use credit cards for all of my transactions for cash back rewards, but I never carry a balance from month to month.

This. I have 3 credit card with very high credit availability, but may only put on $100 on each (to keep them active) and pay them off at the end of each month. With the exception of our mortgage and car (2 years) left, living pretty much debt free makes life SO MUCH easier.

A.C.E. Certified Personal and Group Fitness Trainer
IDEA Fitness member
Kickboxing Certified Instructor
Been in fitness for 30 years and have studied kinesiology and nutrition

So thats what they mean about your "utilizing" you card. Like using a small % of them? So should i pay off one and then use it just for like.... the light bill, which i pay on time every month, so im still using it, but paying it off before the end of the month! Also pay the other off and use it just for gas, which i fill up every week? That will help me?

Having credit available and not using it doesn't "help" your credit score much. Credit score is a culmination of debt ratio and availability along with history of payment. NEVER be late and never max out (unless it's a legit emergency).
I have a rewards card right now that I've been using to pay everything including groceries and house bills. Then at the end of the month I pay it off. I get back 2% of the balance in cash to my account each month. It's great getting money back from the bank and not paying any interest, just for putting it on their card.

A.C.E. Certified Personal and Group Fitness Trainer
IDEA Fitness member
Kickboxing Certified Instructor
Been in fitness for 30 years and have studied kinesiology and nutrition

good to know!!! ;-) ill be buying a house in no time lol jk jk jk one day!

__Bad_Leroy

Using Credit to pay for Credit is never a good idea.

Sure it is. Ever refinance a mortgage?

Kelly1552013

Finances are a lot like health. It can be easy to be generic (eat fewer calories than you burn and you will lose) but in order to get specific advice for your situation, more information is needed. This is like getting a general health question answered via the internet vs. having a doctors appointment to assess your particular symptoms and get an accurate diagnosis and perscription.

My husband and I are financial educators in Chicago, IL and specialize in helping the average American with a diagnosis and perscription for their financial situations. We provide this servce at no fee.

The general information in this thread is fairly accurate, generally you want to maintain minimum payments on the lower interest card while paying as much as you can on the higher interest card. But there may be other things that you should be doing to further your financial position right now.

Anyone can PM me if they'd like to set up a phone consultation.