Valued Contributor
Posts: 1,673
Registered: ‎11-11-2012
Re: To Pay or Not to Pay, that is the Question..

daybreakgonesXe wrote:

VikingsLoyalFan wrote:

Ok, so I imagine this question has been asked over a 1,000 times but I keep reading something different. Can someone please explain to me the difference of paying a cc completely to 0 or leaving 9% utilization on it? I have never let the balance go to 0 in fear of not having reoccurring account (OK) on my credit. Do I pay them completely off or leave them with a really low balance? Thanks in advance!  

That depends what you want to do! If you have multiple cards, many people like to pay off the accounts to 0 while leaving one account with a 1-9% utilization amount over their total credit lines, in order to really maximize their scores.


If you're not planning on apping for anything anytime soon, this really isn't necessary. Feel free to have a small balances on whatever you want!

I think we need to be completely clear here though!   There are two concepts:


1) Having a balance on your card at the time the statement is produced

2) Carrying a balance, i.e. not paying in full the statement balance by the payment due date.


All FICO score discussions are about 1).   People, for whatever reason, who want to maximize score, with pay in full BEFORE the statement CLOSES, on all but 1 of their cards.  So these statements then show 0 balance and that is what is reported to the CRAs.  (Some banks, like US Bank, report at month-end rather than at statement date, so you pay then before the end of the month, but the idea is the same)


Carrying a balance usually incurs interest charges and does nothing for your score, so whenever possible (and of course there are times that this might not be possible) don't do this.  If you are in a 0% interest period, then it's OK, but the complete balance will be reported to the CRA.