Just checked my credit card statement ...

[StitchesGr8Fan]

Leaving a balance is ridiculous. It’s basically blowing away money. Using a card one in a while and paying it off right after will keep the card open without wasting money. If they close it because you paid it off it means they deem you a long term risk, and they can do the same thing even with a balance.

 

[WDW_fan_in_TX]

Thanks everyone for the responses. I was talking about paying it down to a $1 to keep it open. I had an extra bank account to use as a savings account. I moved all the money to my main account once and left $0. It closed the account automatically. That's what I was hoping to avoid with closing my credit card. That's why I wanted to leave a buck on it. I want to keep the card for an emergency. But I might be better off paying it off and letting it close then putting the money into the extra bank account we opened to start an emergency fund. It won't accue interest, but I won't be charged unless I take it below a certain amount.

 

[afan]

Thanks everyone for the responses. I was talking about paying it down to a $1 to keep it open. I had an extra bank account to use as a savings account. I moved all the money to my main account once and left $0. It closed the account automatically. That's what I was hoping to avoid with closing my credit card. That's why I wanted to leave a buck on it. I want to keep the card for an emergency. But I might be better off paying it off and letting it close then putting the money into the extra bank account we opened to start an emergency fund. It won't accue interest, but I won't be charged unless I take it below a certain amount.

You're comparing apples and oranges. Bank accounts need money in them to stay open.

A credit card just needs to be used once in awhile and generally you'll get an email or letter saying use by x date or we're closing. So if I have forgotten to use it I'll load 5 bucks on Amazon and leave it. Only a concern with my 2 oldest cards, I don't want to close them.

 

[gottalovepluto]

Thanks everyone for the responses. I was talking about paying it down to a $1 to keep it open. I had an extra bank account to use as a savings account. I moved all the money to my main account once and left $0. It closed the account automatically. That's what I was hoping to avoid with closing my credit card. That's why I wanted to leave a buck on it. I want to keep the card for an emergency. But I might be better off paying it off and letting it close then putting the money into the extra bank account we opened to start an emergency fund. It won't accue interest, but I won't be charged unless I take it below a certain amount.

@afan
When there is a history of bad credit it is possible the credit issuer will close the card when they zero out the balance. Similarly some issuers will chop the CL as the card gets paid off. (sorry to tag having issues quoting for some reason).

OP, I concur you’re better off without it. And, I don’t know but suspect carrying a balance on the card isn’t helping your credit score.

 

[WDW_fan_in_TX]

Oh ok. I didn't know that. Glad to know it's that way.

You're comparing apples and oranges. Bank accounts need money in them to stay open.

A credit card just needs to be used once in awhile and generally you'll get an email or letter saying use by x date or we're closing. So if I have forgotten to use it I'll load 5 bucks on Amazon and leave it. Only a concern with my 2 oldest cards, I don't want to close them.

 

[WDW_fan_in_TX]

Gotcha. I don't think there's a history of bad credit. I've paid it on time and make at least the minimum every time. And it's really helped my credit. It's gone from sub 500 to over 600 in about 2 years.

@afan
When there is a history of bad credit it is possible the credit issuer will close the card when they zero out the balance. Similarly some issuers will chop the CL as the card gets paid off. (sorry to tag having issues quoting for some reason).

OP, I concur you’re better off without it. And, I don’t know but suspect carrying a balance on the card isn’t helping your credit score.

 

[afan]

@afan
When there is a history of bad credit it is possible the credit issuer will close the card when they zero out the balance. Similarly some issuers will chop the CL as the card gets paid off. (sorry to tag having issues quoting for some reason).

OP, I concur you’re better off without it. And, I don’t know but suspect carrying a balance on the card isn’t helping your credit score.

Oh trust me I know that, part of why I hate bofa so much. Paid the card off and they cut my cl to 500 and that was with a score over 700.

But that also wasn't the clarification that was needed. And with cls as low as OP already has it's hard to say what they'd do anyway.

I would understand letting a small balance close so it generates a statement that will post to the credit report and then paying in full on time as a way of helping repair the score, but there's a huge dif between leaving an amount in a bank acct and on a credit card to keep them open.

 

[dpswift]

If you pay off your card and keep working on your credit rating you should be able to get a better card for emergencies. Putting the extra money in an emergency fund is a good idea.

 

[StitchesGr8Fan]

@afan
When there is a history of bad credit it is possible the credit issuer will close the card when they zero out the balance. Similarly some issuers will chop the CL as the card gets paid off. (sorry to tag having issues quoting for some reason).

OP, I concur you’re better off without it. And, I don’t know but suspect carrying a balance on the card isn’t helping your credit score.

Yes, but they will also close an account with a balance if they deem you a risk. You will still owe the balance, but the card will be closed for new transactions.

 

[WDW_fan_in_TX]

I've sold enough cards to either pay off CC1 (the lowest CL) or pay down one of the other 2 (CC2/CC3). Not sure which way would be better to go. Pay half of what's left on CC1 and pay the rest onto CC3, which has the highest CL but also the highest balance, thus saving interest, or just use it all and pay off CC1 and leave myself with a $0 balance. Then I can just charge maybe 1 thing to it each month, pay it off and help my credit that way.

Also, if it's better to pay it off, is it best to pay off at any point in the month? Or just pay it off on the day it's due? Or does it matter?

If you pay off your card and keep working on your credit rating you should be able to get a better card for emergencies. Putting the extra money in an emergency fund is a good idea.

 

[trenty]

I've sold enough cards to either pay off CC1 (the lowest CL) or pay down one of the other 2 (CC2/CC3). Not sure which way would be better to go. Pay half of what's left on CC1 and pay the rest onto CC3, which has the highest CL but also the highest balance, thus saving interest, or just use it all and pay off CC1 and leave myself with a $0 balance. Then I can just charge maybe 1 thing to it each month, pay it off and help my credit that way.

Also, if it's better to pay it off, is it best to pay off at any point in the month? Or just pay it off on the day it's due? Or does it matter?

I would:
Pay off the one with the smallest balance first. Then close that card, especially if there is an annual fee or monthly fee. Then pay off the next smallest balance, rinse and repeat.

Don’t worry about your credit rating or charging one thing a month. Close your cards, build up an emergency fund. Then when you have a better handle on your finances, consider looking for a no-fee card if you feel you must have one. But first, learn to live and survive without the credit card.

I know I have mentioned TOTAL MONEY MAKEOVER to you before. Reading that book was a game changer for me. Others here have mentioned looking into FPU- that is a great idea too. But if you don’t want to take the FPU course - the book explains how to get out of debt and stay out of debt.

 

[WDW_fan_in_TX]

Thanks for the tip. There is an annual fee on all 3 cards. And I only have enough to pay CC1 off or pay down either CC2 or CC3. I don't have enough to pay off CC1 as well as another card. I'll just have to continue making monthly payments on the other 2. So I will do that. Is it best to go ahead and pay off or wait until the payment is due?

And I have downloaded that TMM book and started it. I tried reading it at work, but I would always lose focus and have to get back to working on work. I have looked into FPU, but my preacher said they'd already done it and wouldn't be doing it again for a while. So that's not an option.

But I plan on paying the full amount due on CC1 when my payment comes due early next month. Will be a small burden off my shoulders.

I would:
Pay off the one with the smallest balance first. Then close that card, especially if there is an annual fee or monthly fee. Then pay off the next smallest balance, rinse and repeat.

Don’t worry about your credit rating or charging one thing a month. Close your cards, build up an emergency fund. Then when you have a better handle on your finances, consider looking for a no-fee card if you feel you must have one. But first, learn to live and survive without the credit card.

I know I have mentioned TOTAL MONEY MAKEOVER to you before. Reading that book was a game changer for me. Others here have mentioned looking into FPU- that is a great idea too. But if you don’t want to take the FPU course - the book explains how to get out of debt and stay out of debt.

 

[CoP Luv]

Call and find out the payoff amount ASAP and then pay it off right then and there. Once you do that, close the account. Everyday you wait with a balance is another days worth of interest added to your bill.

Then, you can put the minimum payment that you were making on CC1 towards CC2 (in addition to the payment you were already making toward CC2) so that you can pay it down faster.

 

[greeneyedchick]

Agreed. pay off as soon as possible since you're accruing interest by the day. It's important to call for the pay off amount since it will be slightly different from your last statement. You also need to be able to pay it off immediately. If you have to mail in a check, then you need to have them give you the pay off amount for that takes into account the time for them to receive the check in the mail and process it. Hopefully you can pay it off online.

 

[Travel60]

OP, you've had lots of good credit card advice and you seem to be working on that. I'm going to offer some completely unrelated life advice. For most of my early work life, I held down a full-time job and a part-time job (sometimes two). Even after I had kids. Perhaps with the holidays approaching, you (and spouse/partner) can find a second part time job and put every cent of that paycheck into paying of CCs. Once you have paid them off do it one more year and put it all in savings. Think of it like a temporary life change. You can do anything for 2-3 years!

 

[trenty]

Thanks for the tip. There is an annual fee on all 3 cards. And I only have enough to pay CC1 off or pay down either CC2 or CC3. I don't have enough to pay off CC1 as well as another card. I'll just have to continue making monthly payments on the other 2. So I will do that. Is it best to go ahead and pay off or wait until the payment is due?

And I have downloaded that TMM book and started it. I tried reading it at work, but I would always lose focus and have to get back to working on work. I have looked into FPU, but my preacher said they'd already done it and wouldn't be doing it again for a while. So that's not an option.

But I plan on paying the full amount due on CC1 when my payment comes due early next month. Will be a small burden off my shoulders.

I would do as @CoP Luv advised. Pay of CC1 ASAP, then put the minimum payment that you were making on CC1 towards CC2. I didn't mean to say to pay of CC2 in full as well (or wait until you have enough to do so.

What we are describing is called the debt snowball method: https://www.ramseysolutions.com/deb...4FTxHZ7niXGjaRRBvGKQd-V-57E42z7qzO7dblpta-E_v

There is some controversy surrounding Ramsey and his methods. I don't particularly agree with everything he preaches, but the debt snowball worked for me, as does his budget planning app.

 

[Nettlelondon]

Get rid of card 1 as soon as you possibly can.

If the current minimum payment on that is $20/month (for example) and the minimum on Card 2 (next smallest balance or next highest interest rate or whatever method you use to rank them - I would go with interest rate) is $20 once you have paid off card 1 pay $40 / month to card 2. Same amount of money going out but this time you will be making a bit more progress to get through the principal on the borrowing rather than just interest and fees.

If your church isn't going to run any sort of financial education programmes in the near future maybe ask around and see if any others are - I am sure that they will be welcoming without you having to switch your worship allegiance as it were (though things may work differently in the US than here in the UK).

But stick with it - you are making progress even if it doesn't feel like it. Even if the main progress is understanding that you need to get your head around the situation. Nothing will resolve itself without intervention. Good work for keeping with it.

 

[barkley]

f your church isn't going to run any sort of financial education programmes in the near future maybe ask around and see if any others are - I am sure that they will be welcoming without you having to switch your worship allegiance as it were (though things may work differently in the US than here in the UK).

i've also seen some offered through community groups and local colleges (to non students as well).

 

[Mackenzie Click-Mickelson]

If your church isn't going to run any sort of financial education programmes

And someone's county is also another place to look. Ours has at least 4 different options available with one targeted specifically for Latinos and is available in our county and the one above us (that has a high Hispanic population). Then there's Catholic Charities which may be under the Catholic Church but is not a faith-oriented aid and is one of the most often quoted in our area to be directed to for families in need. Then there's the Community college. The local library is also one to go to.

Local may be better in some ways because they know your area and particulars to it including unique struggles.

 

[WDW_fan_in_TX]

Just to update. I just did a little spreadsheet by sitting down and looking at all 3 cards. I just wanted to know exactly what I'm paying. So dthis may change what I need to pay towards/off first.

CC1
CL - $300;
Monthly Fees - $0 (no credit protection fee either);
Annual Fees - $0;
Interest Rate - 30.74%;

CC2
CL - $500;
Monthly Fees - $0 but it has credit protection fee each month;
Annual Fees - $99.99 (billed monthly at $8.25)
Interest Rate - 29.24%

CC3
CL - $700;
Monthly Fees - $12.50 monthly fee + credit protection fee;
Annual Fee - $49;
Interst Rate - 35.90%

I would like to keep CC3 open. It has the highest credit limit, but the problem is it also has the most fees and highest APR. CC1 has lowest CL but no fees. So that's where my conundrum stands. Should I pay off CC1 or put all $300 towards CC3 and just keep paying monthly minimum payments on the others?