Pay Down or Pay Off
Date: Wed, 10/22/2008 - 11:17
Next up, I have two accounts with collections. Both for small amounts. One is a stupid Sprint bill, another is a medical bill. Each are both only a couple hundred. I've read that having a paid collection as as bad as an unpaid collection. What should I do with it? Can you ask them to remove it once it's paid?
Thanks!
Hopefully, someone will correct me if I'm wrong, but I believe t
Hopefully, someone will correct me if I'm wrong, but I believe that the 50% number applies to your overall available credit, not just to individual credit lines. If so, then paying $6000 would do about the same amount of good to your reports no matter which cards you paid with it. If that is the case, then I would pay down whatever has the highest interest rate first because that will save you some money in interest fees.
I'm not sure what to tell you about the collections, so I'll leave that for someone with more experience in that area. :D
the percentage of your total credit card utilization is what mat
the percentage of your total credit card utilization is what matters, not the per-card utilization. I thought it was better to pay down the highest interest rate card first, but I have seen arguments for paying down the card with the lowest balance first, so that you are mentally "winning" by having zero balance cards quicker. Obviously if you have 9% cards and 30% cards you'll want to pay off/down the high interest first. Also remember to REGULARLY call and ask your credit card companies to reevaluate your interest rate and balance. I keep a sechedule on my calendar, some will recheck every 2 months, some every 6 months, some cards (like my Discover card) won't re-evaluate upon request, they will only do it automatically on an annual basis.
