Credit Card: Payment Question of Multiple Cards (Pay Full Vs Pay Partial)

creditcardhelp · 06:28 PM

Hello Everyone

So last year, I really messed up with my credit cards as I got diagnosed with an illness and lost my job missing several payments from February 2009 to July 2009. I have 3 credits with Visa (3 different banks). Unfortunately, they all had their credit limit revoked to 0 some time between May to July 2009. They are closed and I would need to reapply. The balance on them is approximately $800 each (so total of $2400ish). The interest is around 19% on each.

My situation improved slightly in july/august, so for the last 6-7 months. I was paying above the minimum each month (around $30-$35/month).

I would like to improve my credit rating. I was wondering if someone could please tell me what the best strategy would be.

1) Should I keep paying above minimum to change my "bad" credit history to good?
2) Should I reduce 1, 2 or 3 cards to below 30%-50% of the balance, than keep making above minimum payments?
3) Should I pay in full 1, 2, or 3 cards and reapply for new ones to build credit?
4) Any suggestions Appreciated.

If someone could please advise me what the best thing/strategy would be do to approve my credit rating, it would be greatly appreciated.

DoingHomework · 09:50 AM

Quote:

Originally Posted by creditcardhelp

Hello Everyone

So last year, I really messed up with my credit cards as I got diagnosed with an illness and lost my job missing several payments from February 2009 to July 2009. I have 3 credits with Visa (3 different banks). Unfortunately, they all had their credit limit revoked to 0 some time between May to July 2009. They are closed and I would need to reapply. The balance on them is approximately $800 each (so total of $2400ish). The interest is around 19% on each.

My situation improved slightly in july/august, so for the last 6-7 months. I was paying above the minimum each month (around $30-$35/month).

I would like to improve my credit rating. I was wondering if someone could please tell me what the best strategy would be.

1) Should I keep paying above minimum to change my "bad" credit history to good?
2) Should I reduce 1, 2 or 3 cards to below 30%-50% of the balance, than keep making above minimum payments?
3) Should I pay in full 1, 2, or 3 cards and reapply for new ones to build credit?
4) Any suggestions Appreciated.

If someone could please advise me what the best thing/strategy would be do to approve my credit rating, it would be greatly appreciated.

The best thing you can do is continue to pay the balances on time. It will take about 4 years for the late payments to become less relevent on your credit report. Until then you must pay every bill on time. I would not pay too much over the minimum. I would put any extra cash you have each month into an emergency fund to use if you are short the minimum payment any month. This will cost you more in interest but that is the price you will pay to rebuild credit. If your cards have not been canceled then you want to keep them open even with 0 limit so that they keep your account age up.

You will need to live without credit for a few years while paying on time. That is the only way you can rebuild your credit. Do not apply for more cards and do not miss any payments for any reason. If you do it could send you back to the start of that 4 year lookback period.

creditcardhelp · 12:44 PM

Hey! Thanks so much for your response! I really appreciate it!
I was reading around and found that like 30-35% of credit history is based on how far you are for the credit limit. And that it should be ideally below 30% of the difference. In my situation the credit limit is 0, so I will always be over.

In this case, I was thinking, should I lower my balance by paying some of it off, and than just keep paying every minimum-above every month (to increase my credit rating + credit history). Or would you (or anyone else) suggest not lowering the balance at all and just keep paying minimum-above payments to build good credit history.

Thanks so much for your help!

Mogul of Pineapples · 10:43 PM

It sounds like this card is bad news. I would pay it off as quickly as possible and move elsewhere, even if that means starting with a sub prime credit card.

creditcardhelp · 03:41 PM

Hey Mogul thanks for your response but moving is not an option LOL

I'm hoping just to build my credit

I've only had it for like 3-4 years. And messed up with consistent late payments last year due to the whole recession situation and ailing health.

I am really working hard to rebuild my credit and any feedback would be sincerely appreciated!!!

Mogul of Pineapples · 09:52 PM

I just meant moving the balance, not physically moving yourself haha. However since the issuers closed your cards on you, that probably won't be an option either.

I would pay the most you can afford on the cards, as quickly as possible. Once that is done, wait a few months for it to reflect on your credit record, then try applying for a new card - hopefully you will be able to get approved. If you applied right now for something, it doesn't sound like you would be able to get anything other than a secured credit card

06:28 PM	#1
creditcardhelp Green Member Join Date: Jan 2010 Location: Canada Posts: 5	Credit Card: Payment Question of Multiple Cards (Pay Full Vs Pay Partial) Hello Everyone So last year, I really messed up with my credit cards as I got diagnosed with an illness and lost my job missing several payments from February 2009 to July 2009. I have 3 credits with Visa (3 different banks). Unfortunately, they all had their credit limit revoked to 0 some time between May to July 2009. They are closed and I would need to reapply. The balance on them is approximately $800 each (so total of $2400ish). The interest is around 19% on each. My situation improved slightly in july/august, so for the last 6-7 months. I was paying above the minimum each month (around $30-$35/month). I would like to improve my credit rating. I was wondering if someone could please tell me what the best strategy would be. 1) Should I keep paying above minimum to change my "bad" credit history to good? 2) Should I reduce 1, 2 or 3 cards to below 30%-50% of the balance, than keep making above minimum payments? 3) Should I pay in full 1, 2, or 3 cards and reapply for new ones to build credit? 4) Any suggestions Appreciated. If someone could please advise me what the best thing/strategy would be do to approve my credit rating, it would be greatly appreciated. Last edited by creditcardhelp : 01-26-2010 at 09:12 PM.

10:43 PM	#4
Mogul of Pineapples Centurion Member Join Date: Jun 2008 Location: Where the smog from the 101 freeway coats my home's windows... Posts: 634	It sounds like this card is bad news. I would pay it off as quickly as possible and move elsewhere, even if that means starting with a sub prime credit card. __________________ “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently.” -Warren Buffett Current Cards: American Express: Blue Cash, Simply Cash Bank of America: Visa Financial Rewards Platinum Plus Chase: Rewards Visa, Amazon Visa Discover: More Current Everyday Card: American Express Blue Cash

09:52 PM	#6
Mogul of Pineapples Centurion Member Join Date: Jun 2008 Location: Where the smog from the 101 freeway coats my home's windows... Posts: 634	I just meant moving the balance, not physically moving yourself haha. However since the issuers closed your cards on you, that probably won't be an option either. I would pay the most you can afford on the cards, as quickly as possible. Once that is done, wait a few months for it to reflect on your credit record, then try applying for a new card - hopefully you will be able to get approved. If you applied right now for something, it doesn't sound like you would be able to get anything other than a secured credit card __________________ “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently.” -Warren Buffett Current Cards: American Express: Blue Cash, Simply Cash Bank of America: Visa Financial Rewards Platinum Plus Chase: Rewards Visa, Amazon Visa Discover: More Current Everyday Card: American Express Blue Cash

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12:44 PM	#3
creditcardhelp Green Member Join Date: Jan 2010 Location: Canada Posts: 5	Hey! Thanks so much for your response! I really appreciate it! I was reading around and found that like 30-35% of credit history is based on how far you are for the credit limit. And that it should be ideally below 30% of the difference. In my situation the credit limit is 0, so I will always be over. In this case, I was thinking, should I lower my balance by paying some of it off, and than just keep paying every minimum-above every month (to increase my credit rating + credit history). Or would you (or anyone else) suggest not lowering the balance at all and just keep paying minimum-above payments to build good credit history. Thanks so much for your help!

03:41 PM	#5
creditcardhelp Green Member Join Date: Jan 2010 Location: Canada Posts: 5	Hey Mogul thanks for your response but moving is not an option LOL I'm hoping just to build my credit I've only had it for like 3-4 years. And messed up with consistent late payments last year due to the whole recession situation and ailing health. I am really working hard to rebuild my credit and any feedback would be sincerely appreciated!!!