CLOSE Your Credit Cards To Escape DEBT

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On the serving pancakes podcast, conversations about volleyball go beyond the court.

Today we have a little best friend compatibility test.

Hey, how long have we been best friends?

It's just a day we met.

As the league won volleyball season heads towards its final stretch,

there's no better time to tune in.

You'll hear unfiltered analysis behind the scene stories and conversations with

leaders making an impact across the sport.

Whether you're following the final push of love season or just love the game,

serving pancakes brings you closer to the action and the people shaping the future of volleyball.

Open your free IHART radio app, search serving pancakes and listen now.

Presented by Capital One, founding partner of IHART Women's Sports.

It's financial literacy month and the podcast eating while broke is bringing real

conversations about money, growth, and building your future.

This month, here from top streamers, Zoe Spencer,

and venture capitalist, Lakisha, Landrum Pierre,

as they share their journeys from starting out to leveling up.

There's an economic component to community striving.

If there's not enough money and entrepreneurship happening in communities,

they failed.

Listen to eating while broke from the Black Effect podcast network

on the IHART Radio app, Apple Podcast, or wherever you get your podcasts.

I'm Daniel Alarcon, and this is my friend is much more famous than I am.

I wouldn't go that far, but I'm John Green, co-host of the podcast The Away End

with my old friend Daniel.

On our podcast The Away End, we'll share with you the magic of international football,

all leading up to the 2026 World Cup.

Together, we'll find out why of all the unimportant things, football, soccer is the most important.

Listen to The Away End with Daniel Alarcon and John Green on the IHART Radio app,

Apple Podcast, or wherever you get your podcasts.

Now on the IHART Radio app, Apple Podcast, or wherever you get your podcasts.

When it comes to credit cards, if you just can't pay it down,

well, number one, you have to make sure that you stop using like the cards.

Stop buying things so that you can manage it properly.

It's so tough right now because we're in a time where credit card interest rates are the

highest that they've ever been ever. A lot of people with credit card debt is just mounting,

you know, it's just growing every single month. So the best thing you can do at this point,

if it's just like out of your control and you do not foresee yourself being able to pay

that credit card down within the next 90 days, the best thing to do is honestly to close that

card right now so that you can then work on a payment plan. Now don't close it and then

forget about it and not contact your bank. No, close it but have a plan to work out

either a settlement with the bank or an agreement to pay it back. If you close it and do nothing,

then it'll probably end up charged off within 30 or within 60 days. But closing it so that you

can stop the charges temporarily, stop, you know, stop the interest a little bit and work on paying

it back, you can, I would say you can of course, you know, get another credit card, you can transfer

that balance, but most likely if you are in credit card debt, you probably don't even have

the bar and power to get another credit card to transfer the balance to a lower interest rate

card. So yeah, like you can settle with banks and now a lot of banks are in tax times coming up.

So banks settle tremendously during tax time, like they bank on that time. So now's the time to

try to, you know, come up with a conclusion on how you're going to settle your balances.

And, you know, rectify it like your habits, but yeah, you can settle. You can settle, but you

got to know that you will have to pay it. I actually went through that as well.

It reached out to a bank. It was, I think at one point I was late or something. Maybe I think I

had utilized the credit card to the max and then I was late and they raised interest rates from

like 19% is like my college credit card. It went up to 29%. Then it became just ridiculous. I

looked at the payoff date. It was like, it seems crazy. Now it was 2035. And this is like three

or two thousand. I'm like, all right. Yeah, I'm like, there's no way this is going to happen. So

then I called and they consolidated it down to a point where I had to pay it off. But I just had

to make sure I paid six consecutive payments. Some of them at the same time. Yeah, you know,

it's like six to nine months. Yeah. Yeah. So when it comes to things like that when we're trying

to pay off debt, because there's been different strategies. And I wondered if you have one, right?

Is it do I pay the card that has the highest usage or do I pay the one that has the least usage?

So I pay that off and then I work my way like the snow. What's your thoughts on that? So that's

a great question. I do like the snow. So if your goal is to just get rid of your credit card debt

and you don't really care to raise your credit score at this time, if you're not trying to use your

credit, then the snowball effect is probably the most effective. Get the credit card with the highest

interest rate, pay it down and then work your way down, right? However, if you are still trying to

use your credit and want to grow your credit while you are paying down your utilization, then I

personally recommend look at any card that has a utilization over 48% tackle those first. If you

can get all of your cards under 48%, then you don't have what's called the max out penalty on

your credit score, meaning when you apply for credit, it's not showing that you have a card that's

maxed out, right? People think maxed out is 100%. After 48%, banks are looking at you like you have

a maxed out card. So get all of your cards over 48% under 48%. Then the next tier that you

should aim for is under 30%. So once you get all the cards under 45%, work to get them under

under 30% and then you just work your way down. If you care about your credit score.

What's the penalty at 48? It's got points for sure. So basically, depending on how many cards you

have, any cards that you have over 48% and depending on the score that they're looking at,

I'll say home, I'll use the mortgage scoring. Every card over 48%, you're going to, you basically

should minus 15 points per card from your score. Also, if you have cards that are 30% to 45% or

30% to 47%, you pretty much need to subtract about 10 points per card, right? Mortgage points.

So yeah, the 48% when it comes to credit cards is showing that you're maxed out, right? So get

all of your cards under 48%, then get them under 30% and then you know, work your way down. If you

care about your score, but if you just are concerned with reading yourself of credit card, the,

you know, as fast as you can or cheap, the cheapest that you can, then yeah, the snowball effect is

probably the one that makes the most sense because the interest does continue to build, of course,

on credit cards. So what about business credit? What's the difference between personal credit and

business credit as far as how it's looked at for your credit score and how you get it and stuff like that?

Yeah, so most business credit, most business credit cards or loans are not solely based,

it's not based on your personal credit scores based on like your business profile score and so there

is a way to build your business score, but it is different in separate from like your personal credit

score. What I tell everyone, make sure because you, I find a lot of people, especially in the

industry that will only care about their business score, but then like just don't care about their

personal score, which to me, it's backwards. If you have a great credit score, a personal credit

score, then it also sets you up to have and build great business credit easier. Like you know, you're

not, I have never had any of those net 30 accounts that people recommend. I don't, I don't deal with

all of that, but I do have a lot of business credit extended to me simply by using my personal credit.

People always say like, you don't want a PG, your personal credit. I mean, I personally,

I do not subscribe to that theory. If I have great personal credit, you absolutely can,

I can definitely vouch for my business credit with my personal credit because number one,

lower interest. Like if you are just going solely off your business credit profile,

you're going to pay higher interest for pretty much everything. If you PG, most of the cards that PG,

it's lower interest, personal guarantee. Yeah, yeah. And so also building, establishing personal

relationships with companies like we talked about American Express, that's the, like you can get

an American, you have an American Express personal card. Now you can get an American Express

business card. Same goes with Chase, same, same goes with most of the big banks. So yeah, I

personally build business credit on the back of my personal credit. And that does not mean that

they're reporting on my personal credit profile. It just means that once I, when I applied for that

account, they looked at my personal credit. And I have no problem with that because it's good.

Right. So I wonder from that aspect, when they look at your personal profile and your business profile,

do inquiries work the same? Because I know a lot of new businesses will apply for new credit cards.

And so do, they look at the same and how does that work? Are they negative? Are they

mandatory? If you have a certain amount within a year. So are you referring to, like if they do,

if you do PG and they do run your personal credit and it's for a business account? Are you saying

does those affect? Well, I know if I apply for like five credit cards, which I wouldn't, but I did

personal personal personal first. Oh, okay. So in fact, they would look at as too many inquiries

within a certain amount of time. Right. If I have a business and I'm applying for credit cards,

do those inquiries, does it, does it, does it look like the same? No, it isn't, it isn't,

it isn't looked at the same when it comes to business because most of the times, like the funding

requirements are different. And you know, but however, when it comes to your personal credit,

credit card increase way more than installment increase. So if you're applying for a car,

you can apply, like if you go to a car like, you know, they'll put, they'll run your credit

like 20 times for most people. If you don't come already with your financing, those are not counted

individually. A lot of people freak out when that happens. But if you are doing, if you're applying

for installments loans within a 14 day time frame, there is something that's called deduplication,

which all increase of the same manner will be basically, you're only going to be affected

at the weight of one. You'll see all of them on your credit profile, but they're not all

individually impacting you. Now, when it comes to credit cards, they're the worst type of increase

because they every single credit card increase does impact you the same. But I mean, here's the thing,

increase are only worth up to 55 points. So I tell people all the time, people worry about

increase more than they worry about payment history credit utilization credit age. And it's just

like, you should not be trying to save or protect your credit increase more than you are building

credit. Like because a lot of people will not build credit because they're scared of increase.

And it's just like, so you're going to, you care more about 10% of your credit profile,

then collectively 75% of your profile, that doesn't make sense. When you're building credit,

you're going to get increased. I don't care about increase ever. Because if you have a great

credit profile, they will never affect you. There has never in history of ever where you were someone

denied solely for increase. And people, people convinced themselves that the increase is what caused

the denial. Like, no, you were denied because you have a lay payment or X, Y, and Z. A bank is not

going to deny you solely because of an increase if your credit profile qualifies for the card or

account, they will be, they will be crazy. A bank wants you to, you know, of course,

borrow the money from them. And if you are denied for an inquiry, you can always get a reconsideration.

On the serving pancakes podcast, conversations about volleyball go beyond the court. Today we have

a little best friend compatibility test. Okay. And how long have we been best friends? It's just a

day we met. As the league won volleyball season heads towards its final stretch, there's no

better time to tune in. You'll hear unfiltered analysis behind the scene stories and conversations

with leaders making an impact across the sport. Whether you're following the final push

of love season or just love the game, serving pancakes brings you closer to the action and the

people shaping the future of volleyball. Open your free iHeart radio app, search serving pancakes,

and listen now. Presented by Capital One, founding partner of iHeart Women's Sports.

It's financial literacy month and the podcast Eating Wall Broke is bringing real conversations

about money, growth, and building your future. This month here from top streamers,

Zoe Spencer, and venture capitalist LaKisha, Landrum Pierre, as they share their journeys from

starting out to leveling up. There's an economic component to community striving. If there's not

enough money and entrepreneurship happening in communities, they failed. Listen to Eating Wall Broke

from the Black Effect podcast network on the iHeart Radio app, Apple Podcast, or wherever you get your

podcast. I'm Daniel Alarcone and this is my friend is much more famous than I am. I wouldn't go that far,

but I'm John Green, co-host of the podcast The Away End with my old friend Daniel.

On our podcast The Away End, we'll share with you the magic of international football,

all leading up to the 2026 World Cup. Together we'll find out why of all the unimportant things,

football, soccer is the most important. Listen to The Away End with Daniel Alarcone and John

Green on the iHeart Radio app, Apple Podcast, or wherever you get your podcasts.

You know the famous author, Roald Dahl. He thought up Willy Wonka and the BFG,

but did you know he was a spy? Now that did I. You can hear all about his wildlife story

in the podcast The Secret World of Roald Dahl. All episodes are out now.

Was this before he wrote his stories? I must have been. What? Okay, I don't think that's true.

I'm telling you, because I was a spy. Binge all 10 episodes of The Secret World of Roald Dahl.

Now on the iHeart Radio app, Apple Podcast, or wherever you get your podcasts.

If you're watching the latest season of The Real Housewives of Atlanta,

you already know there's a lot to break down. Of course you're accusing Kelly of sleeping with

a merry man. They holding K Michelle back from fighting Drew. Pinky has financial issues.

On the podcast Reality with the King, I Carlos King, recap the biggest moments from your

favorite reality shows, including The Real Housewives franchise. The drama, the alliances,

and the tea everybody's talking about. To hear this and more, listen to reality with the King

on the iHeart Radio app, Apple Podcast, or wherever you get your podcasts.