Paying off credit cards??

**TN94z** · 03-12-2008, 07:05 AM

I have two credit cards. The one with the highest balance is 11.99%. The second one is 0% until November. I have enough money to pay off the 0% card right now, but I know that you are supposed to pay off the higher rate cards first. Should I just save up until I get enough to pay off the high rate one, or go ahead and pay off the no interest card now and put that payment toward the high rate one?

**third_shift|studios** · 03-12-2008, 07:11 AM

pay off the high interest one with the 0% one

**00 formula** · 03-12-2008, 07:20 AM

Originally Posted by TN94z

I have two credit cards. The one with the highest balance is 11.99%. The second one is 0% until November. I have enough money to pay off the 0% card right now, but I know that you are supposed to pay off the higher rate cards first. Should I just save up until I get enough to pay off the high rate one, or go ahead and pay off the no interest card now and put that payment toward the high rate one?

Why don't you put the money towards the higher rate card now and then pay the rest off on the higher rate card when you get the money? Why wait to pay it all at once and accrue more interest then you have to?

**TN94z** · 03-12-2008, 07:51 AM

Well, my question is would it be better to pay "some" on the higher rate card or "pay off" the no interest card? I am just thinking that if the no interest card was paid off it would not show up on my credit. Either way is fine with me...I just want to know which way would be best. I can actually pay on the higher rate card or I can pay off two no interest bills with the money.

**67CamaroRSSS** · 03-12-2008, 07:54 AM

WHAT?!?!?!? You mean I can't pay off my Visa with my Mastercard???????

FWIW: Depending on the interest rate of the 0% card after the promo, I'd pay off the higher rate 1st. Higher rate = more of your $$$$ to the card company.

**00 formula** · 03-12-2008, 08:02 AM

Originally Posted by TN94z

Well, my question is would it be better to pay "some" on the higher rate card or "pay off" the no interest card? I am just thinking that if the no interest card was paid off it would not show up on my credit. Either way is fine with me...I just want to know which way would be best. I can actually pay on the higher rate card or I can pay off two no interest bills with the money.

You'd be better showing a balance on a 0% card not paid off with a smaller amount on the higher rate card, then a 0% card showing up with a $0 balance and a higher balance on the higher rate card.

Even a card with $0 balance will still show on your report.

**0rion** · 03-12-2008, 08:08 AM

right, you'd be better off carrying a balance on the 0% card versus carrying a larger balance on the 12% card. I'd pay down the 12% card and try to get it completely paid off as soon as you can.

**TN94z** · 03-12-2008, 08:11 AM

Originally Posted by 00 formula

You'd be better showing a balance on a 0% card not paid off with a smaller amount on the higher rate card, then a 0% card showing up with a $0 balance and a higher balance on the higher rate card.

Even a card with $0 balance will still show on your report.

I know that is true. They don't look at it as a zero balance..they look at it as available credit. So I understand that, but the rest of what you said makes alot of sense. What about the 0% paid off and then cancelled so it isn't on your credit at all?

**00 formula** · 03-12-2008, 08:13 AM

Originally Posted by TN94z

I know that is true. They don't look at it as a zero balance..they look at it as available credit. So I understand that, but the rest of what you said makes alot of sense. What about the 0% paid off and then cancelled so it isn't on your credit at all?

It'll still show up and most credit advisors will tell you that canceling credit cards may just hurt your credit.

**SiggyZ** · 03-12-2008, 08:22 AM

Take your cards, freeze them in a block of ice and don't break the ice until they're paid off.

**TN94z** · 03-12-2008, 08:27 AM

Really? None of my old ones show up now. I know you have to stay on them or they will not close them.. if they stay on your credit, it can hurt you as it shows up as available credit.

**00 formula** · 03-12-2008, 08:34 AM

Originally Posted by TN94z

Really? None of my old ones show up now. I know you have to stay on them or they will not close them.. if they stay on your credit, it can hurt you as it shows up as available credit.

It depends how old they are, but I still have closed cards on my record from a year or two ago. I don't think available credit hurts you necessarily, what hurts you is if you start applying for a bunch of credit or get a lot of really recent available credit. If it's an established card, then you are usually fine.

The available credit shows that you aren't maxed on your current credit (as opposed to only having the higher rate card that is maxed being your only current credit).

**TN94z** · 03-12-2008, 08:39 AM

Oh, my credit advisor told me that they look at unused credit card debt as debt that you could possible have when they run your credti...is this not true? I have found that if you don't keep calling old credit card companies then they will never take it off.

**00 formula** · 03-12-2008, 08:48 AM

Originally Posted by TN94z

Oh, my credit advisor told me that they look at unused credit card debt as debt that you could possible have when they run your credti...is this not true? I have found that if you don't keep calling old credit card companies then they will never take it off.

I guess that could be, I've been told otherwise but the info sometimes varies between advisors as well. If you have an advisor and you're talking about a sizeable amount that you are paying off then may be asking them would be your best option.

However, I would still be pretty certain that paying down the higher rate card would be beneficial financially and reflect credit responsibility on your report.

**00 formula** · 03-12-2008, 08:55 AM

Excerpt from an article that may or may not be helpful:

Credit score aid
Many people are reluctant to have multiple credit cards because they're afraid potential lenders will be scared off by a person with multiple credit lines and a high credit ceiling, figuring that lenders will assume such a person will be more prone to debt.

"That's not how credit scores work," says Davidson. "They (lenders) value having a lot of established, old credit cards on your account. Having a lot of activity and responsible behavior reported to the bureaus is good for your credit score."

According to Davidson, the most important aspect of your credit score is the debt-to-limit ratio. This is a ratio indicating how much debt you have in relation to your credit limit. As a result, you will have a higher score if you have lots of available credit and pay your bills on time.

http://biz.yahoo.com/brn/080118/2418....pf=oneclick#3

**TN94z** · 03-12-2008, 08:55 AM

Well, I don't have an advisor any more. That was a while back when I was looking at building my house. Thanks for the advice. I think I will pay on the higher rate card and try to go ahead and get that taken care of.

Thanks guys for the opinions.

**nhraformula** · 03-12-2008, 10:29 AM

Originally Posted by 0rion

right, you'd be better off carrying a balance on the 0% card versus carrying a larger balance on the 12% card. I'd pay down the 12% card and try to get it completely paid off as soon as you can.

agreed

**CJREX** · 03-12-2008, 06:27 PM

You never "save" your money to pay off a high interest credit card.

Paying off a 12% interest debt is financially the same as getting a 12% return on your money.

So unless your money is earning +12% somewhere, it is better utilized removing the 12% drain that is the debt.

**Hi-Po** · 03-12-2008, 08:40 PM

Originally Posted by nhraformula

agreed

Yep.

America and its "credit". I never use my card. Hate that fucking thing.

**splitfinger09** · 03-12-2008, 11:26 PM

i love my credit card. just use it wisely and pay it on time. I get 3% back on some purchases and 1% on everything. if you are responsible credit cards are the way to go..