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Question By
bpoland58

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which is better, paying off 1 card or paying equal aamounts down on 3 cards?
I have 3 cards with balances of 400, 511 and 690. Would it be better to pay off the 511 and minimum on others or to put 170 on each of them?

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It depends

Helpful to 11 out of 13 people

There are two ways  to reduce credit card debt:

1-Pay off your lowest balance and then the next lowest addign the amount no longer needed for the lowest balance card , etc.

2-Pay of fthe highest interest rate card first.

The first method  gives more gratification sooner because it is  one less payment each month while the second method reduces the amoutn fo interest you pay.

The usual advice is to pick ne  of these options and stick with that option.

Reply by
foothillfarm

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5 People Helped
Helpful to 3 out of 9 people

ALWAYS pay off the higher interest cards first...Duh!

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Reply by
Sumflow

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Helpful to 1 out of 1 people

Agreed, your snowball will build more momentum sooner with #1.  

For sure there are more than two ways to do almost anything.  You can use 1. Dave Ramsey-esque “low balance first” debt snowball, 2. mathematically superior “high interest first” method, or 3. opt for no snowball at all.  That is three for the unimaginative. 

Or you can devise one based on utilization percentages as I suggested below for part of it. then switch to whatever order you please until you pay them off in full.

If you really want tocreate Wealth keep making the payments and buy income producing assets when you are done.  http://youtu.be/YWxEKkko6BY

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Consilidation of credit card debt

Helpful to 2 out of 2 people

There is a 4th way to make it easier to pay off your credit card debt. Look at the credit card that has the least amount charged on it &/or the lowest interest rate for balance transfers & transfer all the debt you can onto that one card without maxing out your credit limit. If this is not possible, you can transfer some to one card & some to another card. Do not use any cards unless absolutely necessary & work on the lowest balance first the concentrate on the highest balance. Also the more payments you can make on time, the quicker your credit score wil rise. It will not happen overnight, but it should gradually improve by at least 5 points & continue to improve over time. P.S. DO NOT USE A CAPTIAL ONE CREDIT CARD TO CONSILIDATE DEBT! IT IS A RIPOFF AND A COMPLETE WASTE OF TIME & MONEY!

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Reply by
Sumflow

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Helpful to 5 out of 5 people

It you do what it says here.

>all the debt you can onto that one card without maxing out your credit limit.<

It will lower your score, big time real quick if you use more than 30% of the credit limit on that card. 

Do not use more than a third of the maximum on any card.  Does anyone disagree with this?

Your maximum is one third of their maximum.
 

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Reply by
Sumflow

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74 People Helped

>the more payments you can make on time, the quicker your credit score wil rise.<

Does this still apply, or do all payments in one month just count as one monthly payment?

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Snowball

Helpful to 2 out of 2 people

They are all pretty close balances.  Using a spread sheeet like the freeone below you can try different senarios, but for sure Snowball threm out and use the Snowball payments to Invest in income earning assets from then on.

http://www.getrichslowly.org/blog/2008/08/26/free-debt-snowball-spreadsheet/

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response to foothillfarms.

Helpful to 2 out of 6 people

Your response was not only not helpful but was insulting. My question was not from the standpoint of expense but from the standpoint of helping credit score... DUH!!!!

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Reply by
Sumflow

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Helpful to 4 out of 4 people

From the standpoint of credit score it would depend on the credit balances of each card to see how they will be utilized after your payment.  I would put the most funds on the one with the least unused utilization on a percentage basis.

The one with the highest percentage of unused credit would be paid off last.  Try to get them all under 30% percent as soon as possible.

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1 Person Helped

Re your response to foothillfarm

Helpful to 0 out of 1 people

Out of curiosity, where does it indicate that in your question that it was from the standpoint of helping your credit score vs the standpoint of expense/paying less in interest? I think you owe foothillfarm an apology...all you mentioned were amounts...nothing was mentioned about a credit score that I could see.

Reply by
winterisherenow

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0 People Helped

Really? You are going to chastise bpoland58 for something said almost 4 years ago?  As to assuming what was intended by the original question we are on creditkarma - the whole point of this site is to help people raise their credit scores.  foothillfarm should have assumed that raising credit scores was the goal.  Even if the intention was unclear foothillfarm didn't have to be a punk about it.

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