I am debating with myself.. Pay off small CC balance in full? Or make "Interest Saver" payment on my 5x larger balance? (debts, rate)

[Creamer1]

Well, I almost forgot about this forum. I will ask my question here. It is my hope that I receive quailty advice. Without too many details, that is my "disclaimer."

Now, in short: My choice is.. I have two Capital One cards. (This is basically my only real "debt" as it is revolving credit, and my only two accounts that remain as such.) Capital One card 1 I have had since 2006, and my balance (and limit) is $2500. Capital One card two I have had since 2009, and my balance (and limit) is $520. (Yes, I know. I have the opportunity to change that today, and then ongoing at about $300 a week.)

I have $700, and I could completely PIF the smaller.. or, my larger has an "Interest saver" payment of about $1000.

I've been making minimum payments for too long, and want to put that to bed before we enter the new year. This has been a stellar year, and I will honestly feel better leaving these debts (which, yes, I did rack up ON MY OWN CREDIT CARDS) in the past... of this amazing good year.

I want to do whichever will raise my credit score the most, with minor concern about being "balanced chased," though Capital One doesn't much seem to care.. and SHOULD be happy I'm paying it.

Both my accounts are active and in use.. as I said, I have been paying the minimum a long time.

Best move with this first $700?

[CaptainNJ]

best move would probably be to put it towards the one with the higher interest rate

[Creamer1]

Originally Posted by CaptainNJ

best move would probably be to put it towards the one with the higher interest rate

Not the higher BALANCE?

I'll have them both paid in like a month...

[CaptainNJ]

Originally Posted by Creamer1

Not the higher BALANCE?

I'll have them both paid in like a month...

the balance doesnt really matter at all. the interest rate determines what is costing you more.

[jayrandom]

Originally Posted by CaptainNJ

the balance doesnt really matter at all. the interest rate determines what is costing you more.

This. Just posting in case having two people say the same thing makes it more likely you'll believe it.

[nybbler]

Pay the smaller one off, and put the rest towards the other. This means new purchases on that card get the interest-free grace period for being paid in full in the future, if you continue to earn more than you spend. If you had the $1000, it would be different, because by paying the $1000 you would avoid interest on the remaining $1500 (which must be a balance transfer, right?). But if you don't have the $1000 that doesn't help.

[M3 Mitch]

Originally Posted by CaptainNJ

best move would probably be to put it towards the one with the higher interest rate

Ding ding ding winner chicken dinner. This is the only mathematically correct play.

[rjm1cc]

Originally Posted by nybbler

Pay the smaller one off, and put the rest towards the other. This means new purchases on that card get the interest-free grace period for being paid in full in the future, if you continue to earn more than you spend. If you had the $1000, it would be different, because by paying the $1000 you would avoid interest on the remaining $1500 (which must be a balance transfer, right?). But if you don't have the $1000 that doesn't help.

agree

[Lacerta]

If you really are going to have them both paid off in a month, we are only talking a couple dollars, if that, of difference on the two interest rates, so it really doesn't matter that much which one you pay down this month and which you finish off next month.

[Grumpty]

For your situation I would say split the $700 proportionately. $120 against the $520 owed and $580 against the $2500 owed. Not sure weekly payments are going to help your score any differently than a monthly payment.