Smaug Posted October 22, 2008 Report Share Posted October 22, 2008 I have about $60k in credit card/line debt on five cards, which, in part, has my credit score down to 654.I am selling a real estate parcel and will be able to pay off all five cards/lines in December.One is in "management" and I'm assuming pay that one off immeditaitely. Should I just totally pay off the rest?? Some people say pay them off but don't close them, others say if I pay them off given my history the lender will probably immediately slice my limit down and that will not help my credit score on the debt/credit ratio, as well as cutting future leeway. AMEX already did that with one line, cut it from 12K to my balance, $7,200.Some people say pay them way down but keep a balance. Or pay them off over a few months with large payments.Should I call the lenders and ask if my credit limit will change with a big pay down? Thank you. Link to comment Share on other sites More sharing options...
swirlgirl Posted October 22, 2008 Report Share Posted October 22, 2008 In today's credit crunch, I doubt the cc company would tell you upfront if they would lower your limit. Are the cards current or are they in default?If they are current, I would suggest paying them off in full if your have the money. There's no sense in paying more interest. Then, wait a little while for the zero balances to hit your credit report. This should increase your score. Then, after that, put small purchases on the card and pay them off. You need to show activity.A lot of people advocate keeping a balance of 10%-35%. But I'm not a fan of such. Personally, I like knowing that I don't owe anybody any money. Link to comment Share on other sites More sharing options...
cap1kid Posted October 22, 2008 Report Share Posted October 22, 2008 Pay them off- but keep them open - you need the age of the cards to help your score- your utilization will be way down too- that will help your scores- There is no way to predict what kind of reaction the credit card companies will have- it today's credit world alot of people are seeing credit limits reduced- interest raised- and even cards closedfor no apperant reason. If you charge a little bit each month and pay in full- no matter how much interest they charge you will pay none. Link to comment Share on other sites More sharing options...
Smaug Posted October 22, 2008 Author Report Share Posted October 22, 2008 Cards are current, in fact, just sent a bunch of payments in early.Well, I don't want to pay them off and watch them get closed. One of them (Chase) just sent me a notice that their APR on my line was going to go to 29 percent in January...I guess I don't much mind if that one gets closed !! Link to comment Share on other sites More sharing options...
cap1kid Posted October 22, 2008 Report Share Posted October 22, 2008 If the companies close them- so be it- but don't close it on your own if it has significant age ( unless you are paying fees) cut em up if you must but keep the account open. or better yet buy a tank of gas each month with the card- and pay in full. Link to comment Share on other sites More sharing options...
Smaug Posted October 22, 2008 Author Report Share Posted October 22, 2008 Then, wait a little while for the zero balances to hit your credit report. This should increase your score. Oh, there is a good question. How long does that take? Do they cycle through and check every 60-90 days or something?Can you spur them to with a call? Link to comment Share on other sites More sharing options...
isislc Posted October 22, 2008 Report Share Posted October 22, 2008 Oh, there is a good question. How long does that take? Do they cycle through and check every 60-90 days or something?Can you spur them to with a call?The CC companies usually report to the CRAs any changes on your CCs within a week after the due date of your bill. During that week is when the next cycle closes and all the interest and fees are reported for the next cycle. Every cycle is approx 28-30 days so they would get reported every month. As for my opinion, pay them all down and make sure to never go above 30% in utilization. Anything above 30% will give you a ding, ideal usage is 0-9% for max Fico reporting. As some of the previous posters, if any of the cards carry any yearly or monthly fees, close them. Also, if your Chase card doesn't carry any fees, don't close the card. Yes, you received a notice that they are bumping up to 29% but if you use it for a tank of gas then pay it off, you don't have to worry about paying any interest on the purchase. That is the whole reason they have that 20 day grace period on purchases. One last thing, have you tried calling Chase to complain about the APR? I'm an AU on a card and they did the same thing to my cardholder. She called them up and protested the APR bump and they reduced the APR back to what it originally was along with a CLI. Doesn't hurt to try. GL and congrats on the major card payoffs! Link to comment Share on other sites More sharing options...
Denita Posted October 22, 2008 Report Share Posted October 22, 2008 But, when you call Chase to get the rate back down make sure you have paid them off first. There will be a pretty good incentive for the Chase rep to give you the rate you had rather than the 29% Link to comment Share on other sites More sharing options...
Charlie9 Posted October 25, 2008 Report Share Posted October 25, 2008 Should I call the lenders and ask if my credit limit will change with a big pay down?Call your credit card companies and tell them you are going to transfer your balance to a lower rate or close the account all together. If the company wants to keep your business then they will transfer you to a Retention Specialist that will offer you lower rates or other incentives. With the Chase card that is going to 29% APR in Jan. 09 read the letter fully, if they are changing the terms of agreement you may have the option to reject them or they will offer a lower rate on the account to keep it open. Link to comment Share on other sites More sharing options...
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