Paying Off Credit Cards

[canadapettit 10+ year member]

my I ask how you accrued so much CC debt? You both may deserve a smack in the mouch for racking up such a debt..

Its pretty easy when you buy a house and have a kid in the span of 2 months, but thankfully we don't need them anymore and haven't used them in a while and have been paying them down over time.

 

[edzy 10+ year member]

I would pay them off, but keep the accounts open, for an emergancy. Unless it effects your credit, then close them. Even a 0 balance CC is considered potention debt to the cards limit.

So if you were to buy a car or house, that 0 balance card with a 10k limit is counted as 10k debt.

 

[squeak9798 5,000+ posts]

I So if you were to buy a car or house, that 0 balance card with a 10k limit is counted as 10k debt.

Who told you that?

It's $10k in "available credit", but not $10k in "debt".

//content.invisioncic.com/y282845/emoticons/fyi.gif.9f1f679348da7204ce960cfc74bca8e0.gif It's good to have higher available credit than outstanding balances //content.invisioncic.com/y282845/emoticons/fyi.gif.9f1f679348da7204ce960cfc74bca8e0.gif

It's not good to have an absurd amount of open cards, but if you have a few cards with high credit limits it's very helpful to the credit score and lowers overall utilization.

 

[newusername 10+ year member]

With your credit score, it isn't necessarily damaging to have a high limit available (as Brad alluded to, it improves your ratio of debt vs available credit). However, when you go through your application, one of the things most banks calculate is your Total Debt Service Ratio, where they compare how much you make per month vs what you have to pay off in debt. The debt they calculate is the maximum debt you could be in to ensure that you're still able to make your payments, so in that situation having a high credit limit available to you could cause your TDSR to be too high (here in Canada, 40% is too high for most loans and mortgages).

Pay off your credit cards. Leave them open in case an emergency comes up. If you need to apply for some other form of credit, cancel them before you do.

 

[Skip01 5,000+ posts]

Who told you that?
It's $10k in "available credit", but not $10k in "debt".

//content.invisioncic.com/y282845/emoticons/fyi.gif.9f1f679348da7204ce960cfc74bca8e0.gif It's good to have higher available credit than outstanding balances //content.invisioncic.com/y282845/emoticons/fyi.gif.9f1f679348da7204ce960cfc74bca8e0.gif

It's not good to have an absurd amount of open cards, but if you have a few cards with high credit limits it's very helpful to the credit score and lowers overall utilization.

Yessur

 

[edzy 10+ year member]

Who told you that?
It's $10k in "available credit", but not $10k in "debt".

//content.invisioncic.com/y282845/emoticons/fyi.gif.9f1f679348da7204ce960cfc74bca8e0.gif It's good to have higher available credit than outstanding balances //content.invisioncic.com/y282845/emoticons/fyi.gif.9f1f679348da7204ce960cfc74bca8e0.gif

It's not good to have an absurd amount of open cards, but if you have a few cards with high credit limits it's very helpful to the credit score and lowers overall utilization.

Acually its called potential credit. whos to say that after you get that new car loan, because you have a 0 balance on a credit card, that you dont blow it on a Wide screen the next day after your car loan gets approved. Then you cant pay the car loan or the tv loan.

Ask a finacial person.

So they include that in figuring out how much to lend, if you had to pay the new loan and the 10k credit card. It can lower your borrowing ability.

 

[duece212 5,000+ posts]

I would pay them off, but keep the accounts open, for an emergancy. Unless it effects your credit, then close them. Even a 0 balance CC is considered potention debt to the cards limit.So if you were to buy a car or house, that 0 balance card with a 10k limit is counted as 10k debt.

Wrong all around. You pay them off and they will probably have their credit limit decreased, or the account closed. Banks are trying to cut back on credit limits. So don't count on having that credit for a buffer.

A 10k credit limit is not looked at as a 10k debt. Read up on utilization for fico scores

 

[newusername 10+ year member]

Guys, it's about more than just FICO scores. For us banks, that number is a starting point (ie. you must have at least this to be considered for a loan, and this for a line of credit). Once you meet that criteria, we go through other adjudication parts like employment history and we calculate your TDSR.

 

[duece212 5,000+ posts]

Guys, it's about more than just FICO scores. For us banks, that number is a starting point (ie. you must have at least this to be considered for a loan, and this for a line of credit). Once you meet that criteria, we go through other adjudication parts like employment history and we calculate your TDSR.

Depending on the type of credit you are applying for. Some can be auto approvals via the fico score, other larger credit applications (mortgage, vehicle, large unsecured, etc) take into account the whole picture.

To assume an open 10k credit limit will automatically be a negative on a credit app is false though.

 

[Skip01 5,000+ posts]

Wrong all around. You pay them off and they will probably have their credit limit decreased, or the account closed. Banks are trying to cut back on credit limits. So don't count on having that credit for a buffer.
A 10k credit limit is not looked at as a 10k debt. Read up on utilization for fico scores

Really?

Ive never heard of that happening?

 

[duece212 5,000+ posts]

Really?

Ive never heard of that happening?

Not sure if you are being sirius...just incase:

http://www.google.com/search?hl=en&q=credit+limit+decrease&btnG=Google+Search&aq=f&oq=

 

[mcsoul 10+ year member]

Obama says that the Trillion dollar bailout is needed because consumer credit is frozen.

You need to do your part as an American and go further into

debt for the sake of your country.

 

[quins90lac 10+ year member]

I owe 2700 dollars in taxes I envy you.

just send them a couple of hammers they spend out about 1,000 for a hammer so if you send them 3 that should give you a 300 dollar credit

 

[Chevillac 5,000+ posts]

what a silly question.

 

[tRidiot 10+ year member]

my I ask how you accrued so much CC debt? You both may deserve a smack in the mouch for racking up such a debt..

Hahaha.... $7500 is a drop in the **** bucket.