Question about credit card debt...?

Question

I have about 12K in cc debt between 6 cards. For credit score reasons, is it better to consolidate onto 2 cards (which will max out both) or to keep my balances spread amongst the various cards (ranging from 1,500 - 3,500) as they are now?

Answer 1

I don't recommend going over 35% of your credit limit. Chase just lowered my limit - causing my current balance to be 65% of my limit. I lost about 30 pts!

Answer 2

Wow. What kind of interest are you paying on $12K in credit card debt! Holy cow! You need to get that paid off. Don't do any consolidating unless you can lock in a super low rate. What will really increase your credit score is paying off some of the cards and closing them. Unless you're incredibly wealthy, your debt to earnings ratio will vastly improve when you get 2 or 3 of those cards paid off.

Answer 3

Opt for a credit card debt consolidation loan...

Credit Card Debt Consolidation Loan: When using the credit card, people ignore the consequences of using the card too often. Frequent use of credit card causes bills to be accumulated and worsens your credit score. Besides lowering your credit score, you also face financial burden since the interest charged is very high.

Answer 4

The credit companies will keep records of all cards. Wether you keep it or not. Now that you have six this is the start of your credit history. They are mostly rated on payment default, 30,60,90 days - this is most important. One 30 day notice makes a difference. As far as how many and the extent of the debt is a fraction of a credit rating. The next largest contributing factor is length of history. If you have a card in good standing for a long period of time it incresases your credit rating. The newer cards tend to be subject to hurt your rating until they gain history.

Answer 5

Depends...do you plan on paying them off to close or just pay them down?

When you say consolidate do you mean transfer balances two two cards or to actually c.c consolidation?

Closing cards can hurt your credit but then so can high balances.

If you meant transfer balances then obviously go with the lowest rate available on ONE of your existing cards. Do not make any late payments new purchases on this card or it will revert to a "default" rate which could end up being higher than the cards you transferred from.

Answer 6

It is better to have more cards with less than a 35-40% balance on each of them.

As you get certain ones paid off, cancel them and try to get higher credit limits on the ones you have left. In the end keep at least 2 cards otherwise your credit score will suffer. Good Luck.

Answer 7

Here's what i've been advised by numerous sources re: credit card debt and raising credit score:
1. keep credit card balances under 50% of your limit. the closer you are to your limit, the more damaging to your credit score. anymore than 50%, and you're "overextended" on your credit obligations.
2. don't cancel your cards. when you cancel a credit card, you are cutting your credit history short. keep it, but don't use it. make it a goal to use your credit card (once you pay them off) and pay it off the next billing cycle. part of credit history and credit score is being able to use credit wisely and to your benefit. learn from your mistakes when you finally are getting better interest rates for your big-ticket items, your credit history becomes your friend, not you enemy.
3. pay off highest interest rates first. you are wasting the most money on those cards. by virtue of paying them off, you are automatically in a better position to negotiate a better future interest rate with the cc company because your credit score would have went up with the consistent and timely monthly payments and the lower overall balance. move down the line from there.
4. shift portions of balances to lower interest cards, if possible. but try to manage the under 50% balance on the cards.
5. opening up new accounts lowers your credit score. chances are you have enough credit as is. if you have trouble with temptation, dont carry your cards.

this advice has worked for me. it comes from mortgage brokers and sources like myfico.com.

Answer 8

I have found on the net that there are a lot of things about fixing your credit you can buy some good some not. I started to use one of those companies that help with consolidation but, I bought these programs that have worked wonderfully. If you follow their easy instructions you will improve you credit and credit score.They even tell you about your credit cards and what to do with them. They even have the forms or letters you should use to send to the credit bureaus. I even bought the programs for my daughter who filed bankruptcy and she has improved her credit also. They teach you everything, how to increase your fico to reading your report and how to go about cleaning your report. I try to tell everyone about these programs because they are so good. These people know what they are talking about and have done the research and they are patterned after someone who filed bankruptcy and how he fixed his credit and now has even better than he had. I feel I have gotten my moneys worth buying them. The address is below.

Answer 9

The credit bureaus claim they take AN AVERAGE of your utilization ratio. They want it to be an overall average of 35% or less of your limits. It should not, in theory, make a difference how it is spread out.

Answer 10

The best advice I can give you is to cut up your credit cards and start on a "cash only" lifestyle. Don't get caught up in credit cards. It will only lead to a life of misery and lack of control.