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Pay down questions....


TheDrewbert
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If someone completed a real estate "flip" deal and made a profit of 50k after all flip related expenses were paid and that same someone had about 49.9k in credit card debt, HELOCs, and Student Loans combined, is it wise to just pay everything down to zero all at once or does that cause some weird credit score issue?

Additionally, once everything is at zero, I would like to cancel a number of my CCs for two reasons. 1st, to reduce temptation, second a large number of my CC lines have a 2k or less limit. I would like to limit myself to just 2 or 3 cards with larger limits.

Thanks

Drew

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Pay it all down at once.

Even though a windfall doesn't score quite as much as paying down over time, do what make sense money-wise.

FICO will recover.

If the cards with smaller limits are no annual fee cards, it really makes more sense to keep them open if you're concerned about long-term FICO effects.

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What about the canceling of a majority of my CC lines? I'd like to keep just Discover Card <oldest line>, GM Card <have lots of points, medium age line>, and US Airways card <travel often, have lots of points, young card>.

I have one Sears Mastercard that I've had for 5 years, has a 5k limit and a high interest rate, but other than that, most of my CC lines are 2 years or less.

I have 6 other open lines, all with 3k or less limits.

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If the cards you want to cancel have no annual fees, just keep them open. Cut up the cards or lock them away someplace. The point is, if you don't have the card in your wallet/purse, you are unlikely to make impulse purchases. The act of having to request a replacement card, or go home to get it out of your personal fire-safe (you do have one for important documents, right???) will give you time to think about the purchase first before doing it.

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