jal540 wrote:takeshi wrote:Is 12% the APR or the utilization?
The APR is 12%.
Do I calculate utilization as just the percentage of the credit limit I am currently using?
If so, right now I have an overall utilization of 49% and 50% on BT card. If I close the highest APR card, get a $5,000 credit limit on the new card, and pay off the balance (very doable), my overall utilization would go down to 32%.
If I do the above and also cancel the new card when it`s paid off, my overall utilization would be 39%. In two years (paying down the other high balance), my overall utilization could be below 20%. I understand less than 30% is considered good; the lower (but not zero), the better.
Thanks for the advice.
Look at your utilization from two angles. Both can change your score or likelihood of getting a new account or CLI.
1) For the individual card or creditor.
2) Overall based on total credit available across all accounts.
If the card doesn't have an AF I would keep it open for now, at least until you pay down your overall debt.
Good luck and remember: YMMV.