Credit Card Balance question - cougarguard.com — unofficial BYU Cougars / LDS sports, football, basketball forum and message board

COUGZ · 05-15-2006, 09:57 PM

I posted this on CB, but was wondering what reponse I would get here.

I read an article a couple of months ago on CNNmoney.com that it is good to carry a balance on your credit card every now and then.

Was that totally out of place?

I was taught growing up to never carry a penny of balance on your credit card. I have never yet carried a balance, chosing to pay it off every month.

What say ye? Thanks.

And why the hell do I get hurt by paying off my balance monthly? I'm damn sure not going to carry a balance so American Express makes an extra $5 from me...not like I don't pay them for my membership already.

Surfah · 05-16-2006, 12:37 AM

Quote:

Originally Posted by COUGZ

I posted this on CB, but was wondering what reponse I would get here.

I read an article a couple of months ago on CNNmoney.com that it is good to carry a balance on your credit card every now and then.

Was that totally out of place?

I was taught growing up to never carry a penny of balance on your credit card. I have never yet carried a balance, chosing to pay it off every month.

What say ye? Thanks.

And why the hell do I get hurt by paying off my balance monthly? I'm damn sure not going to carry a balance so American Express makes an extra $5 from me...not like I don't pay them for my membership already.

Creditors want to see people be able to manage debt and manage it well. If you have no debt to manage why would they be interested in giving you more credit?

UteStar · 05-21-2006, 03:47 PM

surfah is correct...carrying a small balance can be helpful. It shows that you are active in using your credit cards and that you are paying them off. But you defeat this purpose if you miss a payment. Your credit score is not much affected by carrying balances...your credit score becomes affected when you miss payments or you carry balances that are above 50% or even 80% of your limit.

YardTime · 05-23-2006, 10:07 PM

Okay. I carried a balance that was probably a little over 50% but I paid it off very quickly...like 3 months or so. Is that good or bad for my credit?

UteStar · 05-23-2006, 11:09 PM

That should not hurt your credit. Showing that you have had balances in the past and that you have paid them off and on time, will not hurt you. If you are applying for a loan of any kind and they run a credit check and you are carrying large balances, that will hurt you. But if you are over 50% and you pay it off or you lower it and then a few months later, you apply for a loan, there should be no problem at all.

As I said before, the biggest nicks to a credit report are when you carry too large of balances when they check or you have way too many cards or you have missed payments. Carrying a few thousand dollars worth of debt month to month will most likely not hurt you either if you pay on time and it is not out of whack with what your limits are.

FMCoug · 05-24-2006, 04:22 PM

I think the FICO score hit comes at balances over 30%. So always keep your balance under 30% of your credit limit and you're fine.

COUGZ · 05-24-2006, 04:28 PM

Quote:

Originally Posted by UteStar

That should not hurt your credit. Showing that you have had balances in the past and that you have paid them off and on time, will not hurt you. If you are applying for a loan of any kind and they run a credit check and you are carrying large balances, that will hurt you. But if you are over 50% and you pay it off or you lower it and then a few months later, you apply for a loan, there should be no problem at all.

As I said before, the biggest nicks to a credit report are when you carry too large of balances when they check or you have way too many cards or you have missed payments. Carrying a few thousand dollars worth of debt month to month will most likely not hurt you either if you pay on time and it is not out of whack with what your limits are.

Just so I understand you correctly...I should leave a balance even of like $50 on my credit card every month? If that is best for my credit...I will do it, but it still doesn't make any sense to me.

UteStar · 05-24-2006, 06:29 PM

Someone can correct me if I am wrong...You don't need to always carry a balance, but it is probably not a bad thing to do once in a while just so that you can show you know how to manage a debt and it shows some activity with small balances. But I don't know if having a small balance like that every month will help you. Anyone else know?

SteelBlue · 05-24-2006, 07:08 PM

The guy to ask is Statman on cougarboard. I think he does credit risk analysis for a living.

realtall · 05-25-2006, 01:33 AM

I don't do it myself. I find that my credit score is helped by charging the big items(that I was going to buy anyways) & then paying the balance off each month. To me it makes little sense to pay for carrying a balance unless you can't avoid it. What little your credit rating might be helped isn't worth the bucks that you will be paying the cc company.

05-15-2006, 09:57 PM	#1
COUGZ Junior Member Join Date: May 2006 Location: Provo Posts: 26	Credit Card Balance question I posted this on CB, but was wondering what reponse I would get here. I read an article a couple of months ago on CNNmoney.com that it is good to carry a balance on your credit card every now and then. Was that totally out of place? I was taught growing up to never carry a penny of balance on your credit card. I have never yet carried a balance, chosing to pay it off every month. What say ye? Thanks. And why the hell do I get hurt by paying off my balance monthly? I'm damn sure not going to carry a balance so American Express makes an extra $5 from me...not like I don't pay them for my membership already. Last edited by COUGZ; 05-15-2006 at 10:05 PM.

05-25-2006, 01:33 AM	#10
realtall Senior Member Join Date: Aug 2005 Location: Krum, TX Posts: 891	I don't do it myself. I find that my credit score is helped by charging the big items(that I was going to buy anyways) & then paying the balance off each month. To me it makes little sense to pay for carrying a balance unless you can't avoid it. What little your credit rating might be helped isn't worth the bucks that you will be paying the cc company. __________________ http://realtall.blogspot.com/

05-21-2006, 03:47 PM	#3
UteStar Senior Member Join Date: Aug 2005 Posts: 1,817	surfah is correct...carrying a small balance can be helpful. It shows that you are active in using your credit cards and that you are paying them off. But you defeat this purpose if you miss a payment. Your credit score is not much affected by carrying balances...your credit score becomes affected when you miss payments or you carry balances that are above 50% or even 80% of your limit.

05-23-2006, 10:07 PM	#4
YardTime Junior Member Join Date: Jan 2006 Posts: 68	Okay. I carried a balance that was probably a little over 50% but I paid it off very quickly...like 3 months or so. Is that good or bad for my credit?

05-23-2006, 11:09 PM	#5
UteStar Senior Member Join Date: Aug 2005 Posts: 1,817	That should not hurt your credit. Showing that you have had balances in the past and that you have paid them off and on time, will not hurt you. If you are applying for a loan of any kind and they run a credit check and you are carrying large balances, that will hurt you. But if you are over 50% and you pay it off or you lower it and then a few months later, you apply for a loan, there should be no problem at all. As I said before, the biggest nicks to a credit report are when you carry too large of balances when they check or you have way too many cards or you have missed payments. Carrying a few thousand dollars worth of debt month to month will most likely not hurt you either if you pay on time and it is not out of whack with what your limits are.

05-24-2006, 04:22 PM	#6
FMCoug Senior Member Join Date: Jan 2006 Location: Kaysville, UT Posts: 3,151	I think the FICO score hit comes at balances over 30%. So always keep your balance under 30% of your credit limit and you're fine.

05-24-2006, 06:29 PM	#8
UteStar Senior Member Join Date: Aug 2005 Posts: 1,817	Someone can correct me if I am wrong...You don't need to always carry a balance, but it is probably not a bad thing to do once in a while just so that you can show you know how to manage a debt and it shows some activity with small balances. But I don't know if having a small balance like that every month will help you. Anyone else know?

05-24-2006, 07:08 PM	#9
SteelBlue Senior Member Join Date: Aug 2005 Location: Norcal Posts: 5,821	The guy to ask is Statman on cougarboard. I think he does credit risk analysis for a living.