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Pay off 1 credit card or pay 2 down below 50%?


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Ok,

I'm in the position to pay off 1 credit card next week. I could either pay off 1 credit card or I can actually split the money and pay over half on that credit card and one other. Which would take me below 50% utilization on both of them. What do you think would be better? Both have about the same interest rate. One has a $1000 limit and the balance is about $800. The other card has a $800 limit and the balance is about $500. Should I pay the one off or pay both of them down? What does everyone think?

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The guidelines for success in paying down multiple cards anyway is to focus on 1 at a time, then roll that payment plus what you've been paying over to the other one(s) the following month.

Either way your util will drop and fico will raise. You might want to leave like $20 or a minimum payment on the card though to keep it used.

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We have been doing our best to reverse engineer FICO for awhile now, and I agree that having three TL's below 50% will cause a bigger boost in your overall score than paying one card off.
Definitely true, but the satisfaction of paying off one card may give sufficient motivation to pay down the other in a hurry.

Either way, you can't lose. Just pay them down and be done with 'em. ;)

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The guidelines for success in paying down multiple cards anyway is to focus on 1 at a time, then roll that payment plus what you've been paying over to the other one(s) the following month.

Either way your util will drop and fico will raise. You might want to leave like $20 or a minimum payment on the card though to keep it used.

The above is the best strategy. But strategy for what???

Do you want good debt management or do you want good credit management. The two are not one in the same and are often opposed to each other. The debt strategy is to lower your debts so that way you are not bending over with needless interest charges.

As for the credit management strategy, it really wouldn't matter if your scores were already 750 and above because at that point, your score increments upwards at an infinitesemal rate. As for lower scores, getting a bump in your FICO score should be the least of all of your concerns.

The best way to get optimal credit is to exercise responsible credit behavior and exercise it for years. So, don't worry about any kind of short term bump because you are in this game for the long run (like the rest of your life). The debt strategy of reducing your debts will help you out better in the long run.

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