I had 2 credit cards max'd out. I've paid 1 card down, so it now only carries a balance of 30% of the credit limit. Should I continue to pay that one down to zero and start on the next, or should I now attack the other to get that balance down below 50% of the limit. I've been told my credit score will improve faster if i now throw all my extra money at the max'd out card to lower it to less than 50%. Is this true? Interest rates are the same on both.
2007-03-30 18:22:01 · 5 answers · asked by Erik 2 in Business & Finance ➔ Credit
There are pros and cons of both options.
If you pay off the first card with the 30% balance but you let the other accumulate finance charges, not to mention late charges, it may go way above the credit limit and that is not good for your credit standing in that credit card company. You might even be labeled as delinquent if you dont pay that card on time. Also, finance charges will still be high on that card. The positive side here is, you will not have to worry about paying off the first card if you have already paid it down to zero.
If you choose the other option of lowering the other card to 50%, then you lower the finance charge of both cards, and you avoid late charges and possibilities of delinquency. But you still have both cards to pay off in the next month.
Its actually your choice. But I suggest you do the math and compute how much the finance charge on each card would cost you on both options, then choose the one with the lower finance charge.
2007-03-30 18:42:29 · answer #1 · answered by Toffee Nut 3 · 0⤊ 0⤋
Maximize your payments on one of the cards, pay the minimum on the second. Start with the one at 50%. And yes, it is true.
2007-03-31 01:26:09 · answer #2 · answered by lyllyan 6 · 2⤊ 0⤋
if the interest rates are the same then yes you should lower the balance of the one that is maxed out.
2007-03-31 03:50:30 · answer #3 · answered by Norman 7 · 0⤊ 0⤋
six of one.....half dozen of the other.....the amount of interest being charged will be the same....You could better your credit score by paying one of them off, then closing your account, so you wouldn't have the capability of going into debt so easily.
2007-03-31 01:28:46 · answer #4 · answered by GregK 2 · 1⤊ 0⤋
pay down #2....that way you have them both down and better credit...(shows the companies you WILL pay your bills.)
2007-03-31 01:25:57 · answer #5 · answered by Chrys 7 · 0⤊ 1⤋