Paying down debt

[david_respond]

Originally Posted by cdcdguy

I am still not sure if I will pay one off completley, or pay all down some(the interest rates are all about the same).

It's totally your choice, how you want to pay.

Do whatever suits you the best. My suggestion is to go for one that let you sleep in the night.

[tkemery]

Originally Posted by Karla with a K

cdcdguy
First of all congratulation on being pro active in wanting to get this under control especially if your future plans are to downsize and wanting to secure the best possible rate when you do.

Have you recently pulled your credit and do you know your score?
If you haven't you can go to www.annualcreditreport.com
The credit report is free,but if you haven't checked your score recently I would pay the $5 or $6 to get your score then you will have a baseline to work with.

The ratio of total balances vs total credit limit equals 30% of your score. So getting your balances below 50% of your total credit limit will increase your score.

You say that the interest rates are all about the same, now if they are in the higher range before paying any of them pick up the phone.
Call each card especially those you have a long relationship with and ask for the "account retention" department.
Tell them you want a lower rate, you can tell them you have received a lower "balance transfer rate offer" and want to give them the chance to match the offered rate in order to continue the relationship you have had for a long time.

This is where you having the funds in the bank will help,because knowing you have the money to pay off and "close"(your not going to really close the account but they don't know that) the account will be a good bargaining tool.

If they should use the "your almost to credit limit balance" as the excuse not to lower your rate
Ask them how much of the balance would I need to lower to get a lower rate"

Do this for each card making sure to note offer as well as the name & employee number(or some other way to identify the rep.) of each person you spoke with.
You can then review your list to see where you want to "spend" your money.

I am not a fan of folks closing cards , well except for local store cards.
Remember the 30% of your score is based on the ratio. So if you have $30k in credit limits and balances and reduce the balances to lets say $15k your now at 50%
Go in and close half of them and your in the same situation almost to your total credit limit.
You will be much better cutting up the cards or putting them away and not using them.

If you have been comfortable in the total payments you are currently making continue to earmark that total amount to pay down the remaining balances. Because if all of a sudden your having to pay $300 or $400 less in monthly credit card payments you will find something to do with that money so use it to get the other cards paid off as fast as possible.

I agree with most of what you said. However, and I know this will bring on alot of backlash, I work for a large credit card company in the retention department. While I dont want to lose a customer, I still have to balance that with the risk to the bank. With the limited information the original poster gave, I could not tell you if I could lower the rate or not. You are rght the debt/income ratio as well as the balance/credit line ratio are some factors that go into the rate. I would also recomend going to myfico.com. There is good information there that will help anyone to know how to better their score, since the original poster said having a better score is important for their future plans.

I would not agree with closing all unused accounts. Many people are under the misconception that they need to close all their accounts to better their score.

I agree that the original posted should pay down the higher credit cards first, not necessairly that smallest balance. Make the money work for you. If you can earn more in interest banking money than you can what you are paying for any credit card or loan, than bank it.

[FLPL75]

tkemery
I see your new, welcome !!! It is great to have another source of info from someone in the business



yes you are right a lot will depend on the "total picture"
Thats why I suggested calling everyone to see what they can offer

hmm I wonder if our paths ever crossed via the phone
I have spent a lot of time calling for lower rates for friends and family (they are always there to give the ok to the credit card company to talk to me)
This is one of my favorite things to do next to car shopping

[tkemery]

Originally Posted by Karla with a K

tkemery
I see your new, welcome !!! It is great to have another source of info from someone in the business



yes you are right a lot will depend on the "total picture"
Thats why I suggested calling everyone to see what they can offer

hmm I wonder if our paths ever crossed via the phone
I have spent a lot of time calling for lower rates for friends and family (they are always there to give the ok to the credit card company to talk to me)
This is one of my favorite things to do next to car shopping

Thanks for the welcome.

[Rggr]

Originally Posted by tkemery

I would not agree with closing all unused accounts. Many people are under the misconception that they need to close all their accounts to better their score.

I'll second the welcome and thanks for another persepctive.

I would suggest closing accounts but not necessarily for the score. The OP has run up balances due to poor use of credit and budget choices. I would close the accounts and stick to a budget to avoid that situation again.