Pay down or not to pay down?

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Replied by Meya on topic Re: Pay down or not to pay down?

All it took was a little feedback Brian23, it always work. It worked for me and I am still managing it....lol. God I love this site!
:white-flag:
10 years 9 months ago #1

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Replied by Brian23 on topic Re: Pay down or not to pay down?

Gamergal, yeap you def hit it. Plus, if you do happen to get a CLD you wont owe much on any other card so your utilization won't be that bad. Plus, if you continue to use and PIF every month, your history will look great.
10 years 9 months ago #2

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  • Gamergal74
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Replied by Gamergal74 on topic Re: Pay down or not to pay down?

Well reading the responses makes alot of sense. I'm going to go ahead and pay the cards down. If I get a cld on one or more of my cards then so be it. I guess it really won't matter if I'm not carrying a balance and my score will recover so maybe when this is all over I can get even better cards than I have now. I guess it is going to go back to cash for me and I can't say I'm unhappy about it because in the long run it is better anyway. So I figure with the money I save on interest I'm going to start up a roth ira for my husband and I and look towards the future. Thanks everyone for your input!:cheesing:
10 years 9 months ago #3

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  • marylan73
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Replied by marylan73 on topic Re: Pay down or not to pay down?

Thanks, Meya! :cool:
10 years 9 months ago #4

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Replied by Meya on topic Re: Pay down or not to pay down?

Way to go Mary! Said, and done!:white-flag:
10 years 9 months ago #5

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Replied by Meya on topic Re: Pay down or not to pay down?

Sorry so late gamergirl, but it seems like you have been given the best adviser from the response above. Everyone pays their debt differently and according to how much they are able to pay during that period. On some of my cards, I pay 50% of what I used and some I pay $20 of what I used depending on the initial balance.

Now if you are worried about your scores, then yes it is good to keep the balances down low or if any at all. If you are not really focusing on scores then make sure you have a plan to pay off or low pretty quickly. CLD are not triggered by how much or what you put down, these creditors are scared and out to cut anyone to the max.

We have members here who pays in full or have a good track record with their creditors and they still got decreased. There is no true answer or solution to keep a decrease away from you. So I say, just be prepared for the worst but expect the best. :scared: :scared: :worried:
10 years 9 months ago #6

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  • marylan73
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Replied by marylan73 on topic Re: Pay down or not to pay down?

Gamergal74,

Welcome to Finance Globe. I want to say first of all, congratulations on getting your refi and keeping your home in this difficult economy.

Banks will be struggling for some time, and credit will just not be as cheap and easy as it was during the credit boom. https://www.financeglobe.com/Finance/Articles/articles/123/1/-Credit-Limit-Reductions/Page1.html

In your situation, your choice is between paying down your balances and risk losing some of your credit line, or continuing to pay big interest charges month after month. Many cardholders are dealing with this same issue. But paying the minimum payment, or even double the minimum is bad news. https://www.financeglobe.com/Finance/Articles/articles/54/1/Don039t-Get-Caught-in-the-Minimum-Payment-Trap/Page1.html

Credit can come in handy for emergency situations - as it did for you when you had a shortage of cash - but the size of your credit limits aren't as important as your overall financial picture.

Debt is the opposite of wealth, and leaving your credit card balances maxed out when you have an oppurtunity to pay them down will drain your dollars in interest charges, possibly for years to come.

Don't worry so much about how your actions affect your credit score or your credit limits - you already have a house and a few credit cards.

Reduce your level of debt so that you can eventually begin saving money to get you through emergency situations. More jobs are expected to be lost and smart consumers should be prepared for a difficult 2009.

No credit limit, no matter the size, can replace the security of having your debts paid off and some money in the bank.

Mary Lan Tomkins
10 years 9 months ago #7

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Replied by smcc on topic Re: Pay down or not to pay down?

Have to ask this question, while your wondering about paying off your credit cards or the minimum limit, or double the minimum limit, how much are you saving? I would pay off you cards for the following reason: If money is still somewhat tight, why not pay off your cards, have zero balances on all of them and use your cards in case of emergency. This gives you a safety net until your cash reserves are built up to take over that responsibility.

If your saving money and only paying the minimum or double the minimum, what happens if something comes up where your cash reserves can't solve the issue and the amount of credit you have available isn't enough or together both of them can't help you?
10 years 9 months ago #8

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Replied by cireone on topic Re: Pay down or not to pay down?

Nowadays I dont think it has anything to do with carrying a balance or not. SOme companies have devised a plan on how to figure if your a risk or not. It could be from high utilization to no utilization, where you live or where you shop, The number of accounts you have can also raise a red flag. No one is saf now, but be lucky if you havent had you CL decreased.
10 years 9 months ago #9

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Replied by Brian23 on topic Re: Pay down or not to pay down?

gamergal74, I too am a rebuilder and my year where everything will wipe off my report is 2011 (so I will still be rebuilding for the next 2+ years).

I agree with HJM, unless you have AMEX, I don't think we really have too much to worry about on the CLD.

But, I have been seeing more and more of GEMB doing decreases as well. But, to be completely honest, if you don't start to bring down your utilization, you are going to see CLD on any card that you have. In this market, Creditors do not like to see that you are using more than you can afford to pay back on credit (and they review this by what you spend and how much you pay back monthly). I know about 6 mths ago, I couldn't figure out why my scores were still in the 500's and I couldn't seem to break that point, so I paid most of my stuff off and bam 620-650 CS. Which still isnt great but at least it's average.

If you pay everything down to a nominal amount (less than 35%) you can still charge what you want every month, but just make sure that you pay that difference off the next month to stay at a stable utilization.

Hope this helps...
10 years 9 months ago #10

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Replied by hjm331 on topic Re: Pay down or not to pay down?

AMEX has been the most popular lender to reduce credit lines even if you have paid off your balance in full. If you don't have an AMEX card, I would just pay off the cards with balances and lower utilization so when lenders look at your credit report, they won't get nervous and take adverse action due to high utilization and too many cards with balances.
10 years 9 months ago #11

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  • Gamergal74
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was created by Gamergal74

Hi I am new to this forum and I would like to pose a question and maybe get some input on the current situation and how it pertains to my situation.

Okay I want to pay my credit cards down to 20% and I have the means to do it now but by looking at not just this forum but others, I have noticed that people are paying off there cards and getting cld's regardless of how loyal and good paying they are.

Here's my situation. My husband and I had one of those famed subprimed mortgages that alot of people are defaulting on but regardless of how hard it's been, we struggled and got our payments in on time every single month until we recently were able to refinance, but during that time we basically had to live off of our credit cards when we ran out of available cash which wasn't much.

My thing is I'm basically scared to pay down my cards due to so many people getting cld's that are doing so. I haven't had a cld yet on any of my cards but is it because I do carry a balance and they do make money off of me every month? I mean would it be safer for me to just pay double the min payment and call it a day or what?

For those of you wondering, yes my score has tanked due to high util but won't it tank regardless if I pay off these cards and get cld's all over the board? Maybe some util is what these companies want so they can make some money? I would greatly appreciate it if yall could chime in with your opinions on this matter. Meya if your there I would appreciate your input as I had to go through the rebuilding phase like you did.

Thanks
10 years 9 months ago #12

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