PIF vs Carry a balance?

[Anonymous]

I found a credit counseling service through the local university.  It's run by university students but their profs are involved also.  We have an appt to go talk to them on Thurs and hopefully come up with some strategies for how to tackle our debt and raise our credit scores.

One thing I want to be able to understand better before we go into the meeting is why it's better to carry a balance (less than 9% -I believe I've read on these boards) on one card rather than pay ALL cards down to $0 every month.  I spoke to a realtor friend of mine this week and she advised me to pay my cards down to $0 and I didn't really have a great answer about why I've read that it's more advantageous to carry a small balance.

Can you give me some reasoning so that I have a legitimate reasons for why the carry a balance strategy is better for boosting scores when I am asked?  I'd like to be able to say something other than random strangers on the internet told me so.

Thanks!

[Anonymous]

You should not *carry* a balance on any card. The strategy is for all your cards to report a balance of $0 except for one, and for that one to report a balance of 1-9%. Then you pay that balance right away -- you do not carry it month to month, or pay interest on it.

Up to you, but you can learn everything you need to from this board -- nothing a credit counseling service can do for you that you can't do yourself, and plenty they can do that gets in you in more trouble.

[Anonymous]

Thanks, I appreciate the response.  I guess I didn't quite understand the concept.  So am I doing this right?

I only have a $300 limit but I've been trying to use it for all my purchases which means I use it at a store and then immediately transfer the money from my bank account so that I can use it again.  And then I let a few dollars report on my bill and pay that.  Is that what I should be doing?

The place I'm going to is not actually a credit counseling place in the classic sense of the word.  I'm not entirely sure how to define it.  But it's free and they are just going to look at our credit reports and help us come up with a plan of attack.  None of what we do to reduce our debt is done through them.  I'm reading everything I can on here but I'm still getting confused (I deal with a lot of brain fog from health issues).  The information here is still pretty overwhelming but I'm wading through it as best I can.  I feel like I need more indiviualized direction.  But I'm definitely planning to check in here and see if their suggestions line up with what the forums would suggest.  

[kuku4koco]

Yes, what you are doing is right.. charge it.. let it report on your statement and pay it by the due date.  (or you can charge it multiple times a month and pay it off asap, to be able to keep using it.) Always allow an amount preferrably lower than 10% to report on your statement and pay about 5 days before due. (to make sure money clears the bank).  Goodluck on you rebuild!! 

[Anonymous]

If you post your details here, the forum would be happy to provide a plan of attack. Can't hurt to share what this credit group at the college suggests to get second opinions, too.

In the last three months I've gone from barely being able to get a $200 secured card, to having $16k of unsecured credit -- all because of free and generous help from this forum. It's an awesome place.

[Anonymous]

Wow!  That's amazing!  I can't believe how helpful and kind this forum has been already.  

I will get together a post with my details.  Thanks!