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Payment question


utman17
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If your going to pay a large sum on credit card bills, is it better to spread them out over the four you have, or just pay one down? A friend has 4 credit cards that have over 4k on each of them, she is about at 55% maxed on them, she is going to pay 8k towards them, not sure if she should pay two almost off or just divide them up and pay 2k to each.. Thanks!!

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The real goal is to lower the utilization on the cards.

Utilization is what really jacks people (like me). I have two cards that are nearly maxed out (10k and 4k) and that is doing murder to my credit score.

The best suggestion is to lower utilization of the cards to its optimal level. And I don't have that percentage handy. I would have to look it up.

Now debt management is totally different though. The Fair Isaac corporation doesn't care if you are bending over for 21 percent interest or just chilling with six percent. To them it is all a score.

In that respect, you got a mix of cards and one or more is at 21 percent, then I would zero that out.

The carrying costs for high interest is ENORMOUS.

I got a loan to close out my high interest cards and right now I don't mind too much that I am not able to tackle my 4k and 10k maxed out cards right at this moment because their interest rates are a single digit. I will be able to deal with them in a much better frame of finances.

So that is the choice. Credit management and lower the utilization for a better score. Or debt management (which will hurt your score) but gives you less carrying costs in debt...

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