Ok on the big pay off but have some questions...

[LuvingMomof5boys]

I have some TOY accounts that have annual fees that I want to close- for dh and I- to name a few:

Orchard secured- his and hers

HSBC Gold his and hers

1st Premier his-

 

The orchard cards are my oldest card and will be his when is old positive is 10 years old and possibly falls off in february.

 

My next oldest card would be approx 10/05 so its not like years apart.

 

We are currently snowballing our debt (caused by both our stupidity and some circumstances with death but mostly our stupidity) and I would like to pay off and leave open until our debt is paid down (to help with util) and then as the debt is GONE close these.. maybe more.

 

I am not going for a mortgage until probably 2008 maybe 2009 so scores aren't totally important right now but they aren't to be ignored either with AR's etc happening....

 

What do you think- is this an ok plan to go with or should I rethink it? We are currently at roughly 60% utilization and paying 2k a month most months a few 1k and a few 3k (depends on child support received and dh's overtime- though he is going to pick up every shift he can now to speed up the process)

We are making huge progress just by totally discontinuing usage, paying more then minimum (even if only 5-10$) then snowballing the rest of our money (except our small savings deposit) but I want to close these before their annual fees hit (12/06 for one, 1/07 for two, 4/06, 6/06)....

 

Thanks for making it all the way down the message if you have.

B.

[autoxer]

If they have annual fees, and you no longer need them, then go ahead and close them. Good credit is supposed to save you money, not cost you money.

 

What will your utilization look like when you are going for the mortgage?

[LuvingMomof5boys]

if we keep paying at the current rate we will be 0 utilization by the time we need to buy- we don't plan on buying until mid 2008 to early 2009- so we will be able to pay in full. Thats partially why i want to close these now so that they aren't an issue later...

[squirrelgirl]

if we keep paying at the current rate we will be 0 utilization by the time we need to buy- we don't plan on buying until mid 2008 to early 2009- so we will be able to pay in full. Thats partially why i want to close these now so that they aren't an issue later...

 

The cards that have fees - close them as soon as they are at a zero balance. If you don't need a mortgage for another 2-3 years, your scores will have rebounded to what they were pre-closure (and then some - assuming you don't rack up high UT or incur any baddies).

 

Congrats on paying off all your cards!

[LBCS]

Zero Util need not be a goal - the main goal should be to make sure the card companies do not make money off you. As your credit lines keep increasing you will get plenty of zero percent offers for BT's - and you can use them to deposit into a high yield savings account and make money on the interest - and you can pay back your debt even faster :-) I BTed a large chunk of my Chase Card (20K) into a Savings account giving me almost 100 bucks a month free :-) This showed up on Experian today and my score barely dipped 7 points - because I have big limits and Util was still under 20%.I am also planning to do that with my Wells Fargo Card - but the BT is just for 6 months.

 

Good luck with your effort and I hope you buy a house a lot sooner than 2008!!

 

if we keep paying at the current rate we will be 0 utilization by the time we need to buy- we don't plan on buying until mid 2008 to early 2009- so we will be able to pay in full. Thats partially why i want to close these now so that they aren't an issue later...

Edited October 27, 2006 by longbeachcreditseeker

[LuvingMomof5boys]

Thanks Long!

 

We won't be buying until then out of choice- we live in the house we are buying- we rent it from a friend of the family- he has given us the choice to buy whenever we wish- but he only charges us $700 a month for a 210k house- (equals what the taxes cost him per year roughly give or take)

 

We signed a 5 year lease and he knows we want to buy- so he put in our lease that at any point we want to buy the lease can be dually broken and the home will cost 15% less then going rate average in the neighborhood or the amount appraised whichever is less.

 

We have a VERY good landlord luckily- he lets us be open. So we are using this to our benefit to pay off all debt, then get a great downpayment as it will be a huge adjustment to go from 700 per month to 1200 or much more depending on the terms...

 

I hope that as we get our utilization under 30% we will get offers like you mentioned right now my scores are killing me. I posted a prosper loan but I doubt I will get it funded because of my "prosper" score- its nearly 100 less then my fico so I will keep chugging away lol... time will pay for us.

 

Thanks again!

[LBCS]

I just love it when people call me that

 

Thanks Long!

Edited October 28, 2006 by longbeachcreditseeker

[LuvingMomof5boys]

yeah i bet you do- but I was referring to your "long" line of credit lol...

 

Thanks!