Pay Off CCs Each Month...Or Not Too....That is the question

[nicemann]

Ok I have seen different opinions all over the Web....Is it better to pay off credit cards each month or to allow them to have less then 10% carried over each month?

My problem is I hate having balances on my credit cards so I always pay them off each month.  Sometimes I pay them off before they even come around to billing time.  I use my CCs for everything.  My BoA Visa is my main card and it gets used for 95% of anything I purchase.  I don't like to carry cash.  I have both a checking account and savings account with them so I just transfer money each week to it.  It has a $5000 limit and at the most I spend $300 during the week.  I use that card for the airline miles.

Just want to find the real truth if you need to keep a low balance on the card to get your FICO score to increase.  To be honest the interest sucks and I hate paying any extra then I have too.

Thank you!

[Anonymous]

Between DH and myself we have 17 CC.  I carry a balance on about 5.....I am paying down on these cards & almost never use them!   All the other cards carry a bal $0....I use them for something about twice a year to keep them active....but these I PIF within grace period.

[nicemann]

So should I carry low balances or is zero OK?  I probably will use all 6 of my cards each month just to keep them active and showing a payment on them for my CRs.  Just don't want to pay interest if it doesn't help make my FICO score increase.  I made the mistake when I was younger to depend on credit cards and it got me into this situation.  I prefer not to owe anyone money.

[KingAdrock]

For a maximum score, you want a non-zero balance equaling 9% util (both individual and total util) on less than half of your revolving accounts. The other half should have zero balances.

That being said, it's not necessary to actually carry a balance for your CR to show a balance. Your account can show a balance even if you PIF every month. It depends entirely when your CCC reports to the CRAs. This is usually on the statement date, which should not to be confused with your payment date.

[Anonymous]

When I talk about leaving a balance- this is on a card i use everyday/week.

Pay you statement balance in FULL-

If you want to tweak FICO a bit - pay all or most of your ACTUAL balance- this way you can control what gets reported to the CRA's.

Eventually - you will just PIF without the need to tweak the score- by having higher CL's- and the FICO tweaking does not matter-

Took me about 6 months to get to this point-

I still pay early sometimes just out of habit-  

[nicemann]

LOL two different opinions. Just like I keep reading on the websites. Guess I will just continue what I have been doing. Hopefully not having the balances will not hurt me. Heck I may even get lucky and they report to the CR when I do have a balance.

Anyone have any personal experience with this?

[KingAdrock]

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nicemann wrote: LOL two different opinions. Just like I keep reading on the websites. Guess I will just continue what I have been doing. Hopefully not having the balances will not hurt me. Heck I may even get lucky and they report to the CR when I do have a balance. Anyone have any personal experience with this?

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Not so different really. Notice Timothy said " this is on a card i use everyday/week". If you make only one purchase a month and PIF, you will show a zero balance.BUT, if you make purchases throughout the month you WILL show a balance, since only a portion is due this month.

And for the record I always PIF, the only time I have EVER carried a balance is when I had a promo 0% APR.

[nicemann]

Sorry you are correct. Guess since I was mine daily, I should be ok.

Thank you once again.