Hi all, I hit this site many times a day and enjoy the advice given. Now it's my turn again. I just transferred part of a balance off one card to another. I thought it was important not to max out the new card and put a bit less than half the balance on it and nothing else. The b/t rate is not super,super, but is better than my other rate and is good for the life of the balance. Now I read something about total credit limit of all cards compared to the debt is the most important no matter what balances are.So, would it be better to transfer more to the new card while I can . It would still be same amount of debt. Is this making sense? Basically I have one big cc bill and thought keeping balances under 50% on this card would help the most, but maybe it's debt wherever it is.
Just spent an hour on search then jumped into "the discussion". I really don't post often as I can usually learn from other posts. I don't answer much as my computer was down for 3 months and I'd hate to give bad advice when I still feel I'm learning. Can't anyone one have a thought on balances. i am being so dilligent paying and trying to get a better score. Funny, some days it's ok, some days it drops the more I try. I almost feel the CRa's are mocking me.
The answer is that both individual card balances and total balance vs. limits count. You want to keep each individual card balance less than 50% of the card limit. You also want to if possible, keep the total amount owed on all your cards to about 35% or less of your total combined credit limits.
Ok, I am trying to do that ,but would it be better all around to max the low interest card and get a big chunk of the other balance at a lower rate. My goal(before the war and before half my company was laid off) was to get a house for my dog.Either way, paying the one big debt made sense, just not sure how long a maxed out card would affect me. I would probably pay it off in 6? months. I haven't moved on it yet, but want this debt crunched, no more boyfriends in Vegas!
ok, reread your post, better to keep the individual limits low, stay where I am and pay off, will do.
If you can pay it off or down before you need to apply for a mortgage, I say put it all on the one card. Get the lowest rate you can. In the end you'll get out of debt faster. Also, some places (like credit unions) look at the individual items. When I went to the credit union for my car loan, I explained to them that I had gotten an offer at 3.9% for the life of the balance, so I transferred the entire amount and almost maxed that card. I had several other paid off ones. I also explained that I would only make minimum payments on that card until all higher rate debt was paid off, and showed them my plan. I also will never charge anything on that card because payments are applied to the lowest interest rate first, which would mean accruing interest on a higher rate until everything was paid off. So, in effect, that credit limit won't be used for anything else. The loan officer said that after I explained it she could see that it was the best thing to do in the long run, and my loan was approved. So, I guess it depends on your circumstances and your goals.
Hmm, another thought. Thank you for responding. Every goal is different , so if my goal is a mortgage, lower debt is best. I may transfer some more. Trying sooooo hard to pay off this card. I will forever realize the affects of credit. I used to put things on my card to retain my cash in my checking account. Now, I try to pay everything on the debit card to actually see what I can afford. I'm not used to being a penny-pincher, but am realizing the benefits!
