Help me make a plan? Thanks! :)

Question

A lot of things have happened since I last signed in here that have changed my life circumstances quite a bit, so I need some advice about my credit card accounts/utilization, etc.  Here’s the rundown so that you’ll get an idea: Kohl’s:  2000 CL, 0 balance
Macy’s:  2100 CL, 0 balance
Barclay’s Barnes & Noble MC:   1000 CL, 0 balance
Paypal Credit:  3500 CL, 0 balance
Chase Flexible Rewards:  4000 CL, current balance 920
Target:  2000 CL, 0 balance
Citi TYP Visa:  4000 CL, current balance 850
Citi Double Cash:  5000 CL, current balance 145
Capital One Venture:  10,000 CL, 0 balance
Capital One QS:  4250 CL, 0 balance
Amex BCE:  20,000 CL, 325 balance
Discover Miles:  17,500 CL, current balance 7000
Chase Freedom:  1500 CL, current balance 500
Justice Federal Credit Union Platinum Visa:  10,000 CL, 0 balance
Bank of America Better Rewards:  7000 CL, 0 balance
Sallie Mae World Mastercard:  1600 CL, 0 balance Most of the cards that have a balance on them currently are bills that I would simply pay anyway (such as car insurance, mobile phone, etc., that kind of thing), or are going to be paid off completely in the next couple of weeks (for example, that Freedom is paid as of next week, flat out).  However, that Discover card is, quite obviously, the anchor dragging me down.  It’s an old card with very old purchases and I never really paid much attention to paying it off completely before this, being content to just “let it ride”, especially with the limit on it.  However, my husband DESPISES Discover, especially the APR rate that I have on this account (he considers it “extortion” level) and he’s determined that we pay it off and dump it altogether.  I have to say that I concur, as I don’t really use it anymore.  My utilization rate, according to my calculations, is somewhere around 11 percent across the board, but that Discover card alone, it’s quite obvious that the util is high, higher than I want, anyway.  Would it be beneficial to do a couple of balance transfers onto some of the higher limit cards (i.e., Justice FCU, Bank of America, Venture, etc.) and spread out the amount owed so that the util rate on Discover drops?  We’re not spending anything more than what we already have currently (most of the cards are being used for monthly bills that we would normally owe anyway), so the overall util rate won’t rise.  I figure that if I divide the balance between cards, it’ll be quicker to pay it all off because it won’t seem like such a huge wall to overcome, if that makes sense. My ultimate goal is to purchase a new home in a couple of years, as we have a new baby and our current home is honestly way too small to accommodate a new child.  I also have student loans that are currently in a grace period but will activate in December, so I want to prepare for that as well.  We’re well on our way to wiping out all CC balances (though it may not look like it by this account), so I want to make it easier to get that done faster.  Any advice, or am I on target with this plan? Annual income is 84k, scores are currently in the high 700s, if that matters. Edited to add:  I want to try not to put a balance transfer on my Amex, because that's the card we use the most (groceries, gas, etc.) and I'm vigilant about PIF'ing that particular one every month. Thanks in advance.

Answer 1

agentsmith wrote:
Ozz_Man72 wrote:
I have a BoA Better Rewards card with a 0% APR BT offer until July of next year, so I was hoping to maybe transfer half of the balance from the Discover onto that in order to save a little money, but.... if it's not worth considering, I may not bother.  As you say, it's not THAT high, but 40% util on one card kind of bothers me.... No BT fees on the BoA, by the way, which is also an incentive.  I do think that splitting up the balance onto different accounts will motivate me to pay it down faster because it doesn't LOOK so overwhelming.  It's the same exact amount, I know, but two 3500 dollar balances "look" better than one big 7000 one.  Oh then now you should absolutely take advantage of it - no BT fees and 0% APR for a year... that'll save you bunches of money!
What's the limit on the BoA? Because the more money you move onto it, the more money you save by getting it out of that 19.99% APR. Since it's 0% I'd just try to put as much as you're comfortable with onto it, even if it means the card is at 70-80%. If you need help feeling comfortable with a high % utilization, I'd do the interest calculations to see how much you'd save, and that might motivate you. Every $1000 you take off the discover card will save you $200+ in interest over a year. Then I'd put majority of the money towards paying off whatever balance remains on the 19.99% discover, to save interest. Once that's paid off, then begin paying down the balance on the 0%. And good luck finding/buying a nice house!
Was the 0% BT fee on your BofA card a promo? I've only seen 3% whenever I've checked into applying for that card. If it truly is 0%, just do the BT and pay it off.