- Posts: 1
- Joined: Sun Sep 26, 2010 1:08 pm
- Location: Oregon
I have a Citibank card with a promotional rate of 1.9% that is scheduled to revert to its purchase rate of 18.99% in about one month. About 6 months ago when Citibank attempted to raise my purchase rate to 29.99% I had the account closed. The statement shows my limit is $11,500 and the current balance is $10,200.
The thought of paying 18.99% on 10K sickens me, but if I pay off the balance in full, my debt-to-available credit ratio goes up (because the card has been closed), and I am less worthy in the eyes of a lender. I have perfect credit, but my debt-to-available credit ratio is really bad... Everytime I pay down a card, my limit gets cut to just a hundred dollars or so above the balance. I am self-employed and depend on credit cards for times of poor cash flow, so I've been reluctant to pay down balances because I am afraid that if I pay down a credit card, I will lose access to that credit.
So, what are your thoughts of paying the balance down to about $2,000 and then just making the minimum payment until the card is paid off? How will that look on my credit report (i.e. - will it appear as a $2,000 balance on a credit card with a limit of $11,500? Or, will it appear simply as a $2,000 balance with no available credit?)
Thank you for your replies.