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I've just come into a decent sum of money through work which will allow me to pay down a little over $4,500 worth of credit card debt.
I may have gotten a little overzealous earlier today when I paid off the balance on 3 of my 4 credit cards, I made a small payment on the 4th credit card which also has my highest balance. I have $1,750 remaining on this credit card, the others were $64, $340, and $1,230. Should I slowly pay off this 4th credit card? Or have I paid off too much debt too quickly?
I'll still have some credit going for me after paying off the credit cards. I have my mortgage, my car which is a lease, and I'm not sure if it counts, but I have my phone bill/internet/auto insurance/utilities. (do those count?)
Want to maintain my credit score, which had been rising lately since I had been making my payments on time, more than triple the minimum payment, and didn't have too high of balances in relation to my credit limit.
There's no such thing as paying off debt too quickly. So pay off that last card ASAP!
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I'll still have some credit going for me after paying off the credit cards. I have my mortgage, my car which is a lease, and I'm not sure if it counts, but I have my phone bill/internet/auto insurance/utilities. (do those count?)
No, your phone bill, etc. doesn't count toward your credit score (unless you are seriously delinquent in paying those bills; that can show up negatively on a credit report). But of course your mortgage does count. I'm not sure if the car lease counts, as strictly speaking you haven't borrowed any money to get the car, but it might.
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Want to maintain my credit score, which had been rising lately since I had been making my payments on time, more than triple the minimum payment, and didn't have too high of balances in relation to my credit limit.
Just keep paying your mortgage (and other bills) on time, and charge a bit to your credit cards every month but pay them off in full each month, and your credit score will continue to increase over time. There is absolutely no need to carry credit card balances in order to have a high credit score!
There's no such thing as paying off debt too quickly. So pay off that last card ASAP!
No, your phone bill, etc. doesn't count toward your credit score (unless you are seriously delinquent in paying those bills; that can show up negatively on a credit report). But of course your mortgage does count. I'm not sure if the car lease counts, as strictly speaking you haven't borrowed any money to get the car, but it might.
Just keep paying your mortgage (and other bills) on time, and charge a bit to your credit cards every month but pay them off in full each month, and your credit score will continue to increase over time. There is absolutely no need to carry credit card balances in order to have a high credit score!
Thanks!
I remember when the mortgage company dove into my credit history they pulled up everything that I owed, and the lease for the car was part of my debt to net worth ratio.
I remember when the mortgage company dove into my credit history they pulled up everything that I owed, and the lease for the car was part of my debt to net worth ratio.
A car lease is treated as a sort of pseudo-loan for credit purposes since it works in much the same way, you just have the option to return the car at a set time to relieve the remaining obligation.
Do whatever you're comfortable doing to pay them off but the real question is why do you need 4 credit cards? I would kill the 3 you just paid off and keep the 4th unless one of the other ones is a super special card or something.
Do whatever you're comfortable doing to pay them off but the real question is why do you need 4 credit cards? I would kill the 3 you just paid off and keep the 4th unless one of the other ones is a super special card or something.
I would keep the cards but then I travel and absolutely need to have a functioning card. Last trip, one card expired, one was canceled due to a breach of security, another card had a problem with the strip and card readers would not read it consistently. Right now I have one card that is going to be replaced with a chip reader card and Costco is about to replace my American Express with a Visa card.
That said, never ever use a credit card as a source of borrowing. Pay if off every month. If you have a problem doing that you need to take a hard look at your finances and spending.
There's no such thing as paying off debt too quickly. So pay off that last card ASAP!
No, your phone bill, etc. doesn't count toward your credit score (unless you are seriously delinquent in paying those bills; that can show up negatively on a credit report). But of course your mortgage does count. I'm not sure if the car lease counts, as strictly speaking you haven't borrowed any money to get the car, but it might.
Just keep paying your mortgage (and other bills) on time, and charge a bit to your credit cards every month but pay them off in full each month, and your credit score will continue to increase over time. There is absolutely no need to carry credit card balances in order to have a high credit score!
I would beg to differ that paying off debt too quickly can make you vulnerable to an emergency that could force you into even worse debt. You do need an emergency fund - usually folks say at least 3-6 months of your fixed (non-discretionary) expenses. You say you're already afraid you may have paid some things off too quickly which makes me think you're feeling a little nervous from being low on cash now.
You're doing good! Keep working on it and even more so, work to not take on more new debt. You're getting there!
I would beg to differ that paying off debt too quickly can make you vulnerable to an emergency that could force you into even worse debt. You do need an emergency fund - usually folks say at least 3-6 months of your fixed (non-discretionary) expenses. You say you're already afraid you may have paid some things off too quickly which makes me think you're feeling a little nervous from being low on cash now.
You're doing good! Keep working on it and even more so, work to not take on more new debt. You're getting there!
I agree with this... Murphy's Law comes around when you are doing well. Pay off everything only to have an emergency and no money. That would put you right back into credit card debt.
Have at least two months of emergency fund... at least. Hit that last card and carry no cc debt.
Do whatever you're comfortable doing to pay them off but the real question is why do you need 4 credit cards? I would kill the 3 you just paid off and keep the 4th unless one of the other ones is a super special card or something.
Thanks, but I'm not looking for advice on my credit cards.
Plus it is bad to pay off a card and immediately cancel it, especially on short lived accounts.
I do plan on cancelling a few, but after using them here and there for a few more months, I'll probably go down to 2-3. I currently have 7 credit cards, and only a balance on 1. A few of them are store cards that I rarely use, most of them I used to keep transferring balances to keep the 0% APR interest rate.
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