Posted on
February 3, 2010
at
10:46 am
Hey Guys,I was wondering, if you have multiple cards (i.e. 3), is it better to pay off 1 card in full or use that money to make 1/3-1/2 payments on each? Which option would a) help get out of debt faster b) improve credit rating?For example, I have 3 visa credit cards = owing 800 each with interest rate of 19.50%Should I pay off one of these cards in full or should I use the money to make like, say around 400-500 payments on each card?Thanks!
Posted on
February 3, 2010
at
11:26 pm
I think you can get the benefit with the 3erd one. or you can try Visa Cards.
Posted on
February 4, 2010
at
2:27 am
I've read somewhere that what helps is that you keep your balances below 30% of the credit limit (on each card).
Posted on
February 4, 2010
at
3:41 am
1/2 1/3 payment sounds good if you can afford it. However if you are struggling with the payments you can sign up for a Debt Management Plan so your interest rates can be negotiated.
Posted on
February 4, 2010
at
5:31 am
I got this from an msnbc article:
consumers with high unpaid balances and poor FICO credit scores. Reducing credit card limits, closing down accounts with no warning, and abruptly increasing interest rates are just some of the aggressive tactics the card companies are implementing right now to shore up their business. That means serious repercussions for you throughout 2009. Your FICO score may drop — not because you changed your financial behavior, but because the credit card companies changed the rules on you. The best way to insulate yourself is to get out of credit card debt once and for all.
Posted on
February 4, 2010
at
5:35 am
Oh thanks for quoting that! I actually agree & the article is perhaps talking about settling one'sdebt once and for all. There are many debt settlement detractors. Saying that debt settlementwould only cause more harm to one's credit, but think about it - owing that much for that longhas already caused some damage on the credit - with debt settlement, once the consumer has clearedthe debt off - wouldn't the credit (fico score) only improve?
Posted on
February 4, 2010
at
5:37 am
Here's the FICO Score breakdown: The bolded parts are the segments affected by prolonged non-payment and amount owed - which are also the segments that are going to recover via debt settlement:
-35% Payment History- 30% Amount Owed-15% Length of Credit History-10% New Credit-10% Types of Credit Used
Posted on
February 5, 2010
at
11:49 am
Use the snowball approach. Figure out the order you want to pay off the cards (I suggest the highest interest first) and pay only minimum on the others. Once one card is paid off, add that amount to the second card and so on and so on.
