AboutGina Boykin Expertise Financial planning, debt management & credit cards, and money-saving tips for adults and teens. Saving vehicles such as CDs, treasuries, bonds, and money-market funds. I provide honest, objective and relevant information to help you made the best decision for your money.
Experience Over 10 years of combined experience in accounting, audit, investing, entrepreneurship, real estate.
I am the CEO of Atlanta Y.E.S., a nonprofit organization dedicated to financial literacy for youth.
Education/Credentials B.S. Accounting, 10 years of experience in accounting, audit, and investing
Question I have two credit cards with balances on them but a few others with no balances on them. The two with balances are around 85% of the credit. Should I leave it like this and continue to pay these (I pay twice the minimum) or should I transfer some of the balances to the other cards? Which would be better for my credit score and when lenders look at my credit report?
Answer 30 percent of your score is affected by the amount you owe. Lenders look at (1) the total amount you owe combined (2) how much you owe on each revolving credit vs your available credit (3) how many accounts have balances. If you owe more than 1/2 of your available credit on any one card, your score goes down. However, for the cards where you owe less than 1/2, your score is raised. Your score is only temporarily affected by this - as soon as you pay down your other cards, your score will increase. Unless you are planning to purchase a home or car in the next few months, you can leave everything the way it is now.
If you are planning a major purchase, your goal should be to pay down these cards anyway. You don't want to be burdened with a lot of credit card debt when you begin to add on a mortgage or car note.
However, if you have a card with a low interest rate for balance transfers AND there's not fee to transfer, it may be worth looking into this because it will save you money.
Remember, your score is also affected by your payment history and new credit. So continue to pay everything on time, and don't open up any new accounts, so that you keep this part of your score up as well.
