I have 4 credit cards and I'm looking to put extra money on them. Here they are in order of when I received them uncluding aprox interest and aprox balance:
1. Bank of America- 10% aprox interest, $1,950 aprox balance
2. Capital One- 20% aprox interest, $430 aprox balance
3. Gap- 30% aprox interest, $370 aprox balance
4. American Eagle- almost paid off, only 2 months old
Cards 1 and 2 are a year and a half old, Gap is almost a year, and American Eagle is 2 months but I've only used it when I had the money to pay it off ($15 left)
I'll have about $500 to put on my cards, the first 3 are almost maxed out and I'm not worried about American Eagle because it'll be paid off this week.
Should I pay off one card completely and not use it (unless I have cash) OR should I put like $175 on each of the first 3 to get them away from the limits? I'm trying hard to improve my credit score and my spending habits are under control.
Thanks!
2007-10-13 16:38:08 · 4 answers · asked by sara 2 in Business & Finance ➔ Credit
I pay more than the minimum every month...trying to figure out what to do with $500 extra. Pay off one card, or get 3 cards away from their limit?
2007-10-13 18:12:55 · update #1
This extra $500 is pretty much a one time only type of thing...not every month...
2007-10-14 06:43:38 · update #2
This is how you should do it.
First rank by interest rate. I'm throwing out the one you will pay off this week.
Next month
Gap - $370 pay this in full
Capital One $430 pay $120 towards
BoA @ 10% make minimum payment
Month after
Capital One approx bal $320, pay off
BoA pay $180.
Month after, and for 4 months until paid off.
Boa $500
If you stick to this you will be out of debt within 6 months.
Always pay the most towards the highest interest rate first, you save the most money that way.
Good luck with your plan
2007-10-13 20:02:21 · answer #1 · answered by Gem 7 · 1⤊ 0⤋
You are the perfect candidate for consolidating your debts, this process should be give Bank Of America, Capital One the opportunity to lower balances, lower interest rates and eliminate cumbersome fees, such as over the limit fees and late payment fees. However there are some disadvantages of debt consolidation and you can find that http://aspencreditcard.info/
2007-10-16 11:56:29 · answer #2 · answered by Anonymous · 0⤊ 1⤋
Each month you have to pay at least the minimum payment on each one.
The best strategy is to put extra money on the one with the highest interest rate.
2007-10-13 23:43:07 · answer #3 · answered by hottotrot1_usa 7 · 0⤊ 0⤋
i would get rid of cards 2 and 3.
2007-10-21 20:55:46 · answer #4 · answered by Y26 2 · 0⤊ 0⤋