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Better to Pay Off or Leave Balance?

New Member

Better to Pay Off or Leave Balance?

I was reading up on here and I keep seeing people mention 30% of credit available.  I was about to pay all my cards off in full.  None are overdue.  Should I bring all my cards down to a zero balance or would it help my score more by bringing them down to a percentage of the available limit?
 
Also is the percentage of the available limit per CARD or is it TOTAL?  For example 30% would be $150 balance on a $500 limit card or $300 total, spread unevenly between three cards with different credit limits?
Message 1 of 8
7 REPLIES
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Senior Contributor

As with most things, it depends.   Below 50% usage is a g...

As with most things, it depends.
 
Below 50% usage is a good threshold, below 35% is better, 0 balance is still better.
 
Are you planning to close any cards and open another card with better terms?
Message 2 of 8
New Member

No I am not opening any new cards.  I don't have any prob...

No I am not opening any new cards.  I don't have any problem paying what I have right now but since  can pay them off why not?
 
I was only asking because from what I gathered in reading this forum people said it was better to carry some balance than no balance.
 
If paying them all off and giving me zero balances across the board will impact my score in a more positive manner than keeping a small balance on each card with an ontime monthly payment than I'll pay them all off.
Message 3 of 8
Senior Contributor

Only time paying off a CC in full can really ding your sc...

Only time paying off a CC in full can really ding your score is when you PIF one card then open another. Generally this happens when moving a balance from a high interest card to a low interest card. It can adversely affect your score a bit as you appear to be "rate shopping".
 
To avoid this, leave about $100 on the old card, and pay it off over a 3 month period at about $35 a month.
 
Since you're keeping the card, it should not matter. But, if you want an once of prevention, pay off everything but a $100, then pay that off over 3 months till you hit a zero balance.
Message 4 of 8
New Member

Ok I guess I will just pay everything off then as one of...

Ok I guess I will just pay everything off then as one of the cards has a relatively high limit and is a rewards card.  I often pay with that just to get the rewards points and then pay off whatever it was I spent each month.  That can keep some credit moving on my report.
Message 5 of 8
Senior Contributor

If there's no lates, particularly no recent lates, you sh...

If there's no lates, particularly no recent lates, you should be fine with a near zero balance. Exercising each card every now and again certainly doesn't hurt, just keep usage below 35% and you're good.
 
Message 6 of 8
New Member

Open as many accounts as possible maybe 25 at once if you...

Open as many accounts as possible maybe 25 at once if your credit is good that way your available credit will not be so high i charge 100k/ month and even though i pay in full on my credit report it shows the balance when they report. I keep my percentage under 8%
Message 7 of 8
Regular Contributor

Re: Only time paying off a CC in full can really ding your sc...

"
Only time paying off a CC in full can really ding your score is when you PIF one card then open another. Generally this happens when moving a balance from a high interest card to a low interest card. It can adversely affect your score a bit as you appear to be "rate shopping".
 
To avoid this, leave about $100 on the old card, and pay it off over a 3 month period at about $35 a month.
 
Since you're keeping the card, it should not matter. But, if you want an once of prevention, pay off everything but a $100, then pay that off over 3 months till you hit a zero balance."
 
This is wrong. Opening a new account might hurt your score. Transferring a balance doesn't (although if depending on your timing it will be reported on both cards, this may hurt your score). In fact by not transferring it in full, you're adding another card on which you have a balance, and that does hurt your score (albeit slightly).
Message 8 of 8