Credit card prioritizing
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Credit card prioritizing
| Fri, 08-07-2009 - 10:14am |
This is my first post on ivillage and I am looking for some good advice.
| Fri, 08-07-2009 - 10:14am |
This is my first post on ivillage and I am looking for some good advice.
This is my suggestion:
Norma
"Patience is the best remedy for every trouble"- Plautus
Norma
"Patience is the best remedy for every trouble"- Plautus
Thanks for your suggestions.
There are different schools of thoughts on this board. Some said never close an account because it may pull your credit scores down. But if you are not planning to re-finance your house, get a car loan, etc. in a year or two, you may want to only keep a few accounts open. 20 open, inactive accounts can be a hassle to manage, not to mention they can be prone to identity thief and/or fraud. Sometimes the credit card company may close it if you do not use the card for a long time, and supposedly that does not affect your credit scores.
If I were you, I may check your credit scores first (it is a good thing to do periodically anyway), then maybe close 2 or 3 accounts with the lowest limits, wait a couple months, and check your scores again and see how much negative effect there is, and decide what to do with the rest of the accounts at that point.
In general closing account does lower your credit scores, but so does having way to many accounts.
You are extremely fortunate to have such a generous father.
Welcome.
What generous father you have! That must be a huge sense of relief. Do you and your wife have a budget? They are an extremely useful tool to stay out of debt and on task with your finances. I also suggest weekly meetings and both of you being on board with "the money". You can each have different tasks but both be on top of the situation in your weekly meetings. The budget (as you may already know) is what income you have vs what you pay out every month.
It is ok to be very detailed on your budget and you can adjust it over time. Make sure to have a category for savings(college, retirement)and for things you know you will need in the future such as car maintenance. Of course there will be the regular expenses such as water, food, mortgage, cable, electric etc.
I agree the emergency fund is key to getting out of debt and provides peace of mind. Don't forget to replenish it if you use it before paying more debt down. Good luck and if you have questions post often and we will help.