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Regular Contributor
Johnny_Favorite
Posts: 266
Registered: ‎09-05-2012
0

Can Somebody Nice Explain "Don't Carry a Balance?"

So you have a credit card with a $2000 limit.

 

You charge $200 bucks on it.

 

You pay it off.

 

It reports as zero when it hits because there's no balance.

 

How exactly do you build credit if it never shows you have a balance due? What am I missing and sorry if this is a dumb question (it probably is)




Frequent Contributor
TeeandDee
Posts: 426
Registered: ‎02-09-2012
0

Re: Can Somebody Nice Explain "Don't Carry a Balance?"


Johnny_Favorite wrote:

So you have a credit card with a $2000 limit.

 

You charge $200 bucks on it.

 

You pay it off.

 

It reports as zero when it hits because there's no balance.

 

How exactly do you build credit if it never shows you have a balance due? What am I missing and sorry if this is a dumb question (it probably is)


Hi! It's not a dumb question at all.  From what I've learned on here, it is recommended that you let all credit accounts report zero balances except one, and keep that one at atbout 9%.  This keeps utilization down and helps your FICO score.  People can still see you are using your accounts becuase it reports the "Highest Balance" so they know you are using it, but keeping utl down is always recommended, especially when you may be apping for new accounts, mortgages or cars.  Just my two cents..hope it helps!:smileyhappy:

Slowly building....
Valued Contributor
Duncanrr
Posts: 2,841
Registered: ‎06-08-2012
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Re: Can Somebody Nice Explain "Don't Carry a Balance?"

There are other reasons other than FICO scores. It keeps you from over-extending yourself with credit card debt. You will be less likely to be paying high interest to CC companies and if you have financial trouble, like losing a job, you will not have to worry about making high payments on CC's.


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webhopper
Posts: 7,230
Registered: ‎09-16-2011
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Re: Can Somebody Nice Explain "Don't Carry a Balance?"

I don't agree with never letting a card report a balance. The fact is that your highest balance is reported. I have allowed a 4k balance to report on chase. A 4890 balance has reported on discover and a 8625 balance has reported on nfcu.

I also paid in full immediately after statement cut.

I personally think that manual reviewers and computers give me bonus points for actually using my cards.

For the most part I don't carry balances but if one months spend is rather high on a card I will let it report just to increase my "high balance"

Starting Score: 08/29/2011 TU 671 EQ 674
Current Score: TU 754 EQ 694 EX 697
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webhopper
Posts: 7,230
Registered: ‎09-16-2011
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Re: Can Somebody Nice Explain "Don't Carry a Balance?"

I also let a 5780 balance report on zync.

That being said I don't let balances report on all cards at the same time that would be stupid. I also don't let any balances report if I'm planning for an app

Starting Score: 08/29/2011 TU 671 EQ 674
Current Score: TU 754 EQ 694 EX 697
Wallet: NFCU Visa Sig 25k, Amex Lowes 22k, NavCheck 15k, Amex PRG, Amex Zync, Discover It 13.5k, Amazon Visa 5k
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Valued Member
Link2k
Posts: 65
Registered: ‎04-17-2012
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Re: Can Somebody Nice Explain "Don't Carry a Balance?"

I think there may be some confusion here.

 

Don't carry a balance means simply pay your account in full every month no matter how much you charge. 

 

That is completely different than don't let a balance report. A balance can report even if you pay it in full.  The last three months a balance has reported on my cards but I pay all my new charges meaning no interest is charged.

Regular Contributor
Johnny_Favorite
Posts: 266
Registered: ‎09-05-2012
0

Re: Can Somebody Nice Explain "Don't Carry a Balance?"

Okay thank you all. I think I'm understanding a little better now.

 

Credit newbie here.  

 

 




Valued Contributor
nicholasyud
Posts: 1,734
Registered: ‎08-13-2012
0

Re: Can Somebody Nice Explain "Don't Carry a Balance?"

If you had fund to paid then using it as much as you want but then paid most of them off before statement cut off .....leave 1 or 2 to report to balance........that s how I do.....


Starting Score: 560
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shadow2k
Posts: 108
Registered: ‎01-04-2008
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Re: Can Somebody Nice Explain "Don't Carry a Balance?"

[ Edited ]

webhopper wrote:
I don't agree with never letting a card report a balance. The fact is that your highest balance is reported. I have allowed a 4k balance to report on chase. A 4890 balance has reported on discover and a 8625 balance has reported on nfcu.

I also paid in full immediately after statement cut.

I personally think that manual reviewers and computers give me bonus points for actually using my cards.

For the most part I don't carry balances but if one months spend is rather high on a card I will let it report just to increase my "high balance"

Highest Balance is the largest balance that's been on the card at any time.  If you charged $5k, pay it the next day, and then the statement cuts showing a $0 balance, that $5k high balance will still be reported as your Highest Balance.  You don't need to let the statement cut for that to show.  And no, you get no bonus points for that.

 

 

Frequent Contributor
seigex
Posts: 425
Registered: ‎05-16-2012
0

Re: Can Somebody Nice Explain "Don't Carry a Balance?"


shadow2k wrote:

webhopper wrote:
I don't agree with never letting a card report a balance. The fact is that your highest balance is reported. I have allowed a 4k balance to report on chase. A 4890 balance has reported on discover and a 8625 balance has reported on nfcu.

I also paid in full immediately after statement cut.

I personally think that manual reviewers and computers give me bonus points for actually using my cards.

For the most part I don't carry balances but if one months spend is rather high on a card I will let it report just to increase my "high balance"

Highest Balance is the largest balance that's been on the card at any time.  If you charged $5k, pay it the next day, and then the statement cuts showing a $0 balance, that $5k high balance will still be reported as your Highest Balance.  You don't need to let the statement cut for that to show.  And no, you get no bonus points for that.

 

 


This, and also remember that credit reports don't have a memory, so nobody, not even fico, will know what your previous months balance was. However, you WILL lose points for having a maxed out card posted to your report (on statement cut date)  even if you pay it off the day after, and will have to wait a month for it to recover.

 

Also the banks make their money on fees and I'm sure would rather have PIF your balances each month since to them it means less risk and less chance that you're going to default, and they're gonig to not only have to write off your debt, but spend money trying to collect. I'm sure they'll be more willing to extend you higher CLs and on the spot signature loans with lower interest if you have a hsitory with them of responsibly managing your money.

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