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Are there any long-term consequences for carrying a balance?

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Anonymous
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Are there any long-term consequences for carrying a balance?

I have some upcoming dental work ($7k) and was planning to pay in interest-free installments to the office. However, I was just approved (hooray) for a Quicksilver card with 0% APR until March. I am considering putting the work on this card, because I would earn 1.5% ($105) and get 10% discount from the dentist for paying in full ($700!). It is not a problem to pay this off before March. I have no immediate credit needs so I can take the score hit for a few months on the higher util.

 

Are there any long-term negatives to carrying a balance? Will Cap1 hold it against me in the future? I know they like to see you charge up the card and pay it off in full, not sure if this plan will bite me. (I would pay well above minimum each month.)

 

Thanks for any advice.

Message 1 of 3
2 REPLIES 2
RobertEG
Legendary Contributor

Re: Are there any long-term consequences for carrying a balance?

While % util will go up, scoring of % util has no memory, and thus once paid off, it will not have contnued impact.

 

A possible concern of a credtior is when a consumer maintains a high balance for a prolonged period, which can be viewed as an indication that the consumer is over-relying on credit, and thus might be a higher risk.

Based on that, it could trigger a decrease in credit limit, thus resutling in little or no decrease in % util even though the account balance is being reduced.

 

I would try to keep it below approx 80% of overall credit limit, and if above that number, get it down within a couple of months.

Message 2 of 3
Anonymous
Not applicable

Re: Are there any long-term consequences for carrying a balance?


@Anonymous wrote:

I have some upcoming dental work ($7k) and was planning to pay in interest-free installments to the office. However, I was just approved (hooray) for a Quicksilver card with 0% APR until March. I am considering putting the work on this card, because I would earn 1.5% ($105) and get 10% discount from the dentist for paying in full ($700!). It is not a problem to pay this off before March. I have no immediate credit needs so I can take the score hit for a few months on the higher util.

 

Are there any long-term negatives to carrying a balance? Will Cap1 hold it against me in the future? I know they like to see you charge up the card and pay it off in full, not sure if this plan will bite me. (I would pay well above minimum each month.)

 

Thanks for any advice.


As long as you are making large payments, no there should be no long term consequence.

Message 3 of 3
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