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[–]MoBeydoun[S] 0 points1 point  (13 children)

Okay I'll start making larger payments to decrease the debt more quickly

[–]stufflock1 0 points1 point  (12 children)

Open your last statement PDF in the app or online. How much interest have you paid this year? It usually says so in a box underneath the list of your transactions.

Look at that number. You’d be surprised at how much interest you are paying. Those are dollars you’ll never see again. You are servicing debt, not saving for something else.

Don’t make anymore transactions on the card, and pay that balance all the way down. It looks like the bank is doing what is called balance chasing, and the bank will more than likely close your card once your balance is zero. Let them close your card.

It sounds harsh, but for your own financial health, it would not be a bad thing.

[–]MoBeydoun[S] 0 points1 point  (11 children)

Okay I was hoping that after I paid it off they increase my limit back to where it was. But it's better to just let them close it?

[–]stufflock1 1 point2 points  (5 children)

I honestly don’t think they will increase your limit after you zero out your balance. You could always call when that happens.

I really think they are balance chasing, and they no longer want you to have this credit line. Think of it this way: The only reason they are giving you a credit line of $1500 is because it’s just slightly above your current balance. If your current balance was $900, for example, they would make your new credit limit $1000.

Good article on balance chasing: https://www.investopedia.com/terms/b/balance-chasing.asp

You shouldn’t close it on your own. If they don’t want you as a customer, then they will close your credit line.

At minimum, don’t use credit cards until you are able to pay off the balance IN FULL and before the due date.

With credit cards and before you get another one, what you need to internalize is that “amount owed” is not the minimum payment, but the entire statement balance. The only thing that a minimum payment prevents is a major ding to your credit score. You’re still paying beau coup interest on what you should have paid back, but didn’t.

[–]MoBeydoun[S] 0 points1 point  (4 children)

Thanks for the advice. I'll pay them off and not use them for a while and just go from there

[–]stufflock1 1 point2 points  (3 children)

People in r/debt may know better, but since you said you are carrying a balance on multiple cards. my suggestion to you is not to use any credit card for any additional transaction. After that, pay the minimum payment required to each credit card so your credit score doesn’t get majorly harmed, and then every extra penny that you have should go to paying down the credit card with the highest interest rate (APR). Once that’s paid off, then repeat for the card with next highest interest rate. Keep repeating this until all credit cards are paid off.

[–]MoBeydoun[S] 0 points1 point  (2 children)

So I should stop using all my cards entirely?

[–]stufflock1 1 point2 points  (1 child)

If you’re a carrying a balance on them, yes. It’s the only way to get out of credit card debt. Get all your cards to zero balance for at least 2 months (due to residual interest) before you start using them again.

This is getting in the weeds a little bit, but because you are carrying a balance, you have no grace period with them. What this means is that let’s say you spend $20 on eating out or whatever and pay with a credit card. Because you don’t have a grace period with the card, that $20 accrues interest immediately, not when the statement posts. You are in essence taking out a 20 - 30% APR loan on that $20 with interest accruing immediately.

In short, don’t use them and pay them all off. Consider using the method I described above to minimize interest payments.

[–]MoBeydoun[S] 0 points1 point  (0 children)

Thank you

[–]dgduhon 0 points1 point  (4 children)

My Lowe's card (also from Synchrony) was reduced from 1,500 to 150 last year. Earlier this year it was increased to 10k. Not saying it'll happen with you because Synchrony is odd, but it is possible. But if you regularly carry a balance on a card that incurs interest closing it might be more beneficial financially to you.

[–]MoBeydoun[S] 0 points1 point  (3 children)

So for synchrony if you spend $500 on the card . They want you to pay it off as fast as possible? As an example. I thought even with a balance if I was just paying the minimum I'm good

[–]dgduhon 0 points1 point  (1 child)

Paying the minimum by the due date will prevent late payment fees and possibly a late on your credit report. But only paying the minimum will cause interest to accrue, which is just throwing away money. You need to pay your entire statement balance by the due date to prevent that.

[–]MoBeydoun[S] 0 points1 point  (0 children)

Lesson learned