Credit score wise, is it better to pay off one credit card or split it up and pay down two?

Answer 1

Credit score wise, there isn't much of a difference. Your credit score looks at the ratio of your total debt to your total available credit - paying down either will help. If one of them has a higher interest rate, focus on that one. Pay $1 more than the minimum payment on the other - that way it won't show up on your credit report as "minimum payment."

Answer 2

[example] If you have two cards, each card has a $5000 credit limit. You carry a balance of $2500 on one card and a zero balance on the other - FICO would score you higher if you split the balances.


But before you split the balance you need to think about a few things and crunch some numbers --

What the terms of the balance transfer (BT) is on the card you are planning to BT to. If you have to pay a BT fee and how much it would be, if the interest will be less, etc.

If you don't "need" your scores to look their best at this time, not going to apply for credit any time soon, etc, and the BT terms are not the best, then you might be better off to leave things as they are. There would be no reason to pay extra money (BT fees etc) just to have your scores look a bit better for a short time.

If the BT terms are good and you would actually save money, low / no BT fee and even lower interest than is on the card that currently has the balance, then it would probably be worth it to BT some of the balance.

Answer 3

Why are you paying them down? If it is to make a large purchase then don’t try to pay them down…. What I mean is don’t spend all your money to pay off the credit card to make your credit look good and find you don’t have the cash for the purchase you wanted to make such as a down payment on a home.

If you are just looking to get out of debt and clean up your credit pay them down together… don’t skip payments. Remember that fees are added for not paying the minim balance and interest is added on. Once interest is added to the bill your next bill is calculated on the purchase and interest and increases. When you pay a bill always check to see that the payment you make is enough to pay something down on the total amount. Sometimes a minim stated on a bill is not enough to cover penalties.

Once you know what you need to pay for each bill you have two choices to pay down debt.

1. Pay the one the highest interest rate any additional you can afford. 21% costs you more than 12%. It will save you money in the long run by paying down that monthly interest fee.
2. if you have one or two bills that are small amounts and one time fees such as a doctor bill at 6% interest and you can pay it off in one or two lump payments then do it. Once paid off transfer that bills payment amount to that higher interest rate. It is not the better of the two choices but if you need a satisfaction of making a dent in your debt it can help boost your confidence.

Bottom line is don’t build up debt on interest by not paying off a card to pay another. You only cancel out the other payment and it shows your not paying a debt.

Also look at your spending habits. Do you need the $4.00 coffee from star-bucks or can you make do with the free one from the break room at work. Brown bag it often and if you do go out split a meal or order a healthy side dish that would cost less. My favorite is a sweet potato… it costs no more than $2.00. I eat out with my friends. Its fiber and filling so I am not hungry and it works great with my diet. Another great choice is each person brings a salad item to work and you have lunch together no one over spends and it’s a great healthy choice.

Answer 4

I'd actually split it up and pay two down, because who knows, they might spontaneously increase your credit limits.

Answer 5

always have your credit cards at least half way,I wouldnt pay them completly off,it build your credit if you continue payments on it