Credit Advice

Have a question? Have advice to share? The combined knowledge and experience of everyone in the Credit Karma community can help you. Enter your question or help others below to get started!

Question

Posted in Credit Cards
Profile Image

Question By
topcollector

1 Contribution
0 People Helped
How to utilize a 0% credit card....
I just recently got approved for a $5000 credit card with 0% interest for 18 months. My problem is I currently have 5 outstanding credit card balances and am not sure how to utilize the $5000 line of 0% credit properly. The balance transfer fee is 3%. I have outlined my current 5 cards with current balance, interest rate and my regular monthly payment amount.

$1030 balance, 15.24% interest and $50 month payment. (this account is closed)
$2400 balance, 22.99% interest and $150 month payment.
$1490 balance, 19.99% interest and $50 month payment.
$6570 balance, 10.40% interest and $150 month payment. (this account is closed)
$5800 balance, 15.24% interest and $500 month payment. (this account is gets most charges per month, hence the higher monthly payment allocated to this card)

I am thrown off by the fact that my highest current balance is also my lowest interest rate. I have analyzed this scenario a few times and have drawn my opinion but would like some expert opinions on how they would handle this.

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW
All Responses

Result 1-1 of 1Results per page: 5 | 10 | 25Page 1 of 1   Previous | Next
3 Contributions
1 Person Helped
Most Helpful Response

Pay off your higher interest rate cards

Helpful to 1 out of 1 people

Take the $2,400 and $1,490 and switch to the new card. That will put it at around 80% utilization of the credit line, which is substantial.

Do not charge anything to it until your utilization has decreased to less than 25%. In the meantime, try to pay off the 2 cards at 15.4% faster and keep bringing the balance of your 10.4% down.

Remember, your objective to to be debt-free, but once you reach 25% or less on your credit cards, your lenders will probably give you better rates or increase your credit lines.

Reply by
topcollector

1 Contribution
0 People Helped

That is exactly the conclusion I came to as well. I am going to continue making $500 month payments to my higher balance card at 15.24% as that will bring that balance down quickly. I am also going to raise my $150 payment on my lowest rate card, with the highest balance, to $250. 

Thanks for you response.

Result 1-1 of 1Results per page: 5 | 10 | 25Page 1 of 1   Previous | Next

Your Credit Scores Should Be Free. And Now They Are.

View your scores and reports anytime.

SIGN UP NOW

Reply to this Question

Write your response:
Enter Your Comments

The Credit Advice pages of the Site may contain messages submitted by users over whom Credit Karma has no control. Credit Karma cannot guarantee the accuracy, integrity or quality of any such messages. Some users may post messages that are misleading, untrue or offensive. You must bear all risk associated with your use of the Credit Advice pages and should not rely on messages in making (or refraining from making) any specific financial or other decisions.