July 24th, 2007


More Financial Matters

You guys have been pretty good with financial questions so far, so I have another one for you. My Bank of America Credit Card is currently carrying a several-hundred-dollar balance, mostly due to the fact that I'm at an introductory rate and (at the moment), my money is better served in savings than paying off the token rate on the card. However, the introductory period is going to end any day now. I have my statement due 8/5 and it hasn't gone up yet, but it probably will next month.

Poll #1027004 Pay off Credit Card?

I should...

...keep paying the minimum due until the rate goes up.
write a large check to drop the balance before the rate goes up.
pay it all off before the rate goes up.

As always with financial questions, the "why" is more useful in the long term than the "what", so post vociferously. While we're at it, what makes the most sense for my credit rating (in general) - paying off the balance before the statement is written every month or letting them charge me a little interest?

Edit: I know the bottom option is the one that will save me the most money in the short term. But every little bump in my credit rating will make getting a mortgage easier for the house I'm buying, and I know that your credit goes up when you make monthly payments and down when you make lump sum payments. What's the cost-benefit analysis look like?
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