What is the best way to allocate extra money for credit card payments?

[ascorbic]

Here are a few of my credit card balances

Balance         Limit   APR     Utilization Percent 
3563.03 	4100	0	86.90317073
2402.77 	3400	3	70.66970588
9197.66 	10300	0	89.2976699
2165.87 	2500	2.75	86.6348
2511.64 	3000	2.75	83.72133333

I want to improve my credit score. I have been paying ontime on all of these accounts but I think the high utlization percent is killing my score. Should I work on lowering the utilization on each account, or should I try to use the snowball method to pay accounts off? I have been snowballing the 3% APR account (that is why the utlization is so much lower relative to the other accounts), but I am wondering if that is really the best approach.

I don't expect a huge jump in my score any time soon, but I am at a 560 right now, I'd like to break 600 in a year. And these APRs are locked in, the accounts are closed so as long as I continue to make payments these rates won't go up.

I am thinking my strategy should be to try and pay an additional 500 a month (this is a stretch) on the biggest account with an 89% utilization. After three months it would take it to a 70%.

I guess I could also try bringing the utlization down on the smaller balances first, if I paid 500 on the 2511.64 balance it would be at 67%. Then next month 500 on 2165.87 would bring that down to 66% and the following month 3563.03 minus 500 would be 74% utiliziation.

Is this even the right thinking or should I just stick with snowball?

[cooliemae]

I would use the snowball method because it's really the overall utilization of your credit with a look at the individual cards as well. In your case with such debt-to-credit ratio on all your cards, I don't think it really is going to make much difference to get one card down, but by using the snowball method, you'll be saving money on interest over the longer haul.

[cptacek]

How did you get these rates locked in? That is some cheap money, yo.

[Joan.of.the.Arch]

Ah yeah, I am curious about the locked-in rates, too. The zero percent rates are probably introductory deals from when you first took out the credit cards, no? (All of them look like intro deals, really.) Or they could be balance transfer deals on an older card. But those deals normally convert to a higher rate after a period, certainly by one year later. Just "closing" the account does not take away the lender's ability to impose the agreed upon rates after the intro period. I guess it depends on what you mean by "closed." Just cutting up the card and telling the issuing lender that you are not going to use the cards anymore doesn't close the account. Basically, if you owe, there is still an account. Do you have a written agreement with the lender that they will not raise these rates?

[ascorbic]

The rates are locked in because it is a repayment plan. The accounts are closed (under the creditors definition of closed) and in repayment under agreed upon terms.

[disneysteve]

I would snowball highest to lowest rate. It doesn't matter what the utilization is on each card. It is the overall number that matters.

[heidrek]

snaowball approach is a pretty simple and effective strategy to implement - makes good sense and it's a great way to see improvement quickly to keep you motivated.