topic Re: how bad is carrying balance in terms of Credit history? in Credit Cards

how bad is carrying balance in terms of Credit history?

Anonymous — Fri, 20 Dec 2013 04:32:28 GMT

hey guys, i was paying my credit card today and one question popped up .

so far, i've been paying in full before the due day, but what would happen if i just pay miniume amount instead of full amount?

i know it sounds really REALLY stupid but i am new to credit card so please excus my foolish question..

so, IF i pay just miniume amount, would that look really bad to my cureent/future lenders?

could it possibly put down my credit score?

thanks !

Re: how bad is carrying balance in terms of Credit history?

FinStar — Fri, 20 Dec 2013 04:36:35 GMT

@Anonymous wrote:
hey guys, i was paying my credit card today and one question popped up .
so far, i've been paying in full before the due day, but what would happen if i just pay miniume amount instead of full amount?
i know it sounds really REALLY stupid but i am new to credit card so please excus my foolish question..
so, IF i pay just miniume amount, would that look really bad to my cureent/future lenders?
could it possibly put down my credit score?

thanks !

So why are you entertaining only paying the minimum if you're already on PIF mode? Are you having a cash flow situation?

Re: how bad is carrying balance in terms of Credit history?

Anonymous — Fri, 20 Dec 2013 04:50:49 GMT

@Anonymous wrote:
hey guys, i was paying my credit card today and one question popped up .
so far, i've been paying in full before the due day, but what would happen if i just pay miniume amount instead of full amount?
i know it sounds really REALLY stupid but i am new to credit card so please excus my foolish question..
so, IF i pay just miniume amount, would that look really bad to my cureent/future lenders?
could it possibly put down my credit score?

thanks !

No. You'll be fine. As long as the util is down before you apply. And as long as you don't miss a payment. If you're only paying minimum, you'll have a hard time getting approved, but once it's paid back down with minimal util, no problems.

Re: how bad is carrying balance in terms of Credit history?

Anonymous — Fri, 20 Dec 2013 04:59:10 GMT

@Anonymous wrote:
@Anonymous wrote:
hey guys, i was paying my credit card today and one question popped up .
so far, i've been paying in full before the due day, but what would happen if i just pay miniume amount instead of full amount?
i know it sounds really REALLY stupid but i am new to credit card so please excus my foolish question..
so, IF i pay just miniume amount, would that look really bad to my cureent/future lenders?
could it possibly put down my credit score?

thanks !

No. You'll be fine. As long as the util is down before you apply. And as long as you don't miss a payment. If you're only paying minimum, you'll have a hard time getting approved, but once it's paid back down with minimal util, no problems.

Thank you for your reply !

so as long as i do not miss the payment date, i will be fine rite?

I just got worried that someday, i might not be able to PIF XD hhaah

thanks again !

Re: how bad is carrying balance in terms of Credit history?

Anonymous — Fri, 20 Dec 2013 05:15:08 GMT

Just don't run them up too high. You'll be fine.

Re: how bad is carrying balance in terms of Credit history?

Anonymous — Fri, 20 Dec 2013 05:33:32 GMT

@FinStar wrote:
@Anonymous wrote:
hey guys, i was paying my credit card today and one question popped up .
so far, i've been paying in full before the due day, but what would happen if i just pay miniume amount instead of full amount?
i know it sounds really REALLY stupid but i am new to credit card so please excus my foolish question..
so, IF i pay just miniume amount, would that look really bad to my cureent/future lenders?
could it possibly put down my credit score?

thanks !

So why are you entertaining only paying the minimum if you're already on PIF mode? Are you having a cash flow situation?

oopss somehow i didn't see your reply..my bad !

well, its christmas soon ...after that, there's new year....

so i figured i might end up using more than i earn XD ..

Re: how bad is carrying balance in terms of Credit history?

FinStar — Fri, 20 Dec 2013 05:43:34 GMT

@Anonymous wrote:
@FinStar wrote:
@Anonymous wrote:
hey guys, i was paying my credit card today and one question popped up .
so far, i've been paying in full before the due day, but what would happen if i just pay miniume amount instead of full amount?
i know it sounds really REALLY stupid but i am new to credit card so please excus my foolish question..
so, IF i pay just miniume amount, would that look really bad to my cureent/future lenders?
could it possibly put down my credit score?

thanks !

So why are you entertaining only paying the minimum if you're already on PIF mode? Are you having a cash flow situation?
oopss somehow i didn't see your reply..my bad !
well, its christmas soon ...after that, there's new year....
so i figured i might end up using more than i earn XD ..

Just stick to a budget so you don't overspend and end up with the Christmas debt blues. Scores could drop if your utilization stays stagnant, so have a plan of action to manage your debt. Paying the minimum should be a short term solution, not long term though.

Re: how bad is carrying balance in terms of Credit history?

Anonymous — Fri, 20 Dec 2013 06:03:45 GMT

@FinStar wrote:
@Anonymous wrote:
@FinStar wrote:
@Anonymous wrote:
hey guys, i was paying my credit card today and one question popped up .
so far, i've been paying in full before the due day, but what would happen if i just pay miniume amount instead of full amount?
i know it sounds really REALLY stupid but i am new to credit card so please excus my foolish question..
so, IF i pay just miniume amount, would that look really bad to my cureent/future lenders?
could it possibly put down my credit score?

thanks !

So why are you entertaining only paying the minimum if you're already on PIF mode? Are you having a cash flow situation?
oopss somehow i didn't see your reply..my bad !
well, its christmas soon ...after that, there's new year....
so i figured i might end up using more than i earn XD ..

Just stick to a budget so you don't overspend and end up with the Christmas debt blues. Scores could drop if your utilization stays stagnant, so have a plan of action to manage your debt. Paying the minimum should be a short term solution, not long term though.

Re: how bad is carrying balance in terms of Credit history?

Anonymous — Fri, 20 Dec 2013 06:19:14 GMT

thank you for advice !
yeah.. I will try not to go too crazy on it.
my aim is to have just one carry over after new year.
thanks again !

Re: how bad is carrying balance in terms of Credit history?

amakol — Fri, 20 Dec 2013 07:05:05 GMT

Finstar, what do you mean by "scores could drop if your utilization stays stagnant?" My understanding is that UTIL reflects only the last month's reported data. Is there a lasting effect from a high UTIL of over >20-30% down the line after they've been paid down?

Reason why I ask - currently sitting on a couple 0% APR balances until Aug/Nov respectively.

Re: how bad is carrying balance in terms of Credit history?

Anonymous — Fri, 20 Dec 2013 12:10:33 GMT

@Anonymous wrote:
hey guys, i was paying my credit card today and one question popped up .
so far, i've been paying in full before the due day, but what would happen if i just pay miniume amount instead of full amount?
i know it sounds really REALLY stupid but i am new to credit card so please excus my foolish question..
so, IF i pay just miniume amount, would that look really bad to my cureent/future lenders?
could it possibly put down my credit score?

thanks !

Your current score is a reflection of your current utilization, and there's no "memory" in your score.

So if you carry a balance for a while, suffer a score hit, and then pay the balance off, your updated score will reflect that.

However, a given lender does have memory of what your balance has been at various times. One example of negative action is balance chasing, where the lender lowers your limit as a high balance is paid down. This does happen to some people who carry a high balance for a period of time.

Re: how bad is carrying balance in terms of Credit history?

jamesdwi — Fri, 20 Dec 2013 12:49:20 GMT

it is wise to always pay more than the minimum, i like to always pay double the minimum, while paying the minimum will not effect your fico score no one knows if its a red flag in one of your current or future lenders internal scoring method. There is a reason lenders use EX reports, they get a lot of details about how you pay every month. Than can effect future approvals, CLI and auto-CLI.

Re: how bad is carrying balance in terms of Credit history?

Anonymous — Fri, 20 Dec 2013 13:33:12 GMT

@Anonymous wrote:
hey guys, i was paying my credit card today and one question popped up .
so far, i've been paying in full before the due day, but what would happen if i just pay miniume amount instead of full amount?
i know it sounds really REALLY stupid but i am new to credit card so please excus my foolish question..
so, IF i pay just miniume amount, would that look really bad to my cureent/future lenders?
could it possibly put down my credit score?

thanks !

Are these in a 0% APR period? Because apart from credit history impacts, the usual bad thing about carrying a balance is the high interest charges. Obviously doesn't apply if you are in a 0% period, but then you need extra discipline to make sure you can pay off before the 0% ends.

Re: how bad is carrying balance in terms of Credit history?

FinStar — Fri, 20 Dec 2013 14:41:03 GMT

@bonehead88 wrote:
Finstar, what do you mean by "scores could drop if your utilization stays stagnant?" My understanding is that UTIL reflects only the last month's reported data. Is there a lasting effect from a high UTIL of over >20-30% down the line after they've been paid down?

Reason why I ask - currently sitting on a couple 0% APR balances until Aug/Nov respectively.

Stagnant in the form if the OP were to incur incremental debt for all/most CCs long term (raising utilization accross the board) without reducing those balances in a given timeframe.

Re: how bad is carrying balance in terms of Credit history?

Anonymous — Fri, 20 Dec 2013 15:40:53 GMT

currently my card is on 0% intro APR.
but I wont go too crazy but thanks guys for all the thoughts and advices !!

Re: how bad is carrying balance in terms of Credit history?

Anonymous — Fri, 20 Dec 2013 15:57:42 GMT

while i'm at this topic, i have another question;

i see many people get a card for one year for perks (0% into AF for first year, bounus points etx), then get rid of the card before one year..

is it okay to do that ? i mean, wouldn't it show on credit history and when lenders see it, it could come as negative?

Re: how bad is carrying balance in terms of Credit history?

Stralem — Fri, 20 Dec 2013 16:16:12 GMT

@Anonymous wrote:
while i'm at this topic, i have another question;
i see many people get a card for one year for perks (0% into AF for first year, bounus points etx), then get rid of the card before one year..

is it okay to do that ? i mean, wouldn't it show on credit history and when lenders see it, it could come as negative?

Few people actually get rid of the cards. What most people do is simply downgrade (or "product change") their card to one with similar benefits but no annual fee.

For example, many people get a Sapphire Preferred from Chase to get the bonus points, but then downgrade to the normal Sapphire to avoid the annual fee. It's a sound strategy, even though it might make a lender think you're a churner.

Re: how bad is carrying balance in terms of Credit history?

Anonymous — Fri, 20 Dec 2013 16:42:31 GMT

@Stralem wrote:
@Anonymous wrote:
while i'm at this topic, i have another question;
i see many people get a card for one year for perks (0% into AF for first year, bounus points etx), then get rid of the card before one year..

is it okay to do that ? i mean, wouldn't it show on credit history and when lenders see it, it could come as negative?
Few people actually get rid of the cards. What most people do is simply downgrade (or "product change") their card to one with similar benefits but no annual fee.

For example, many people get a Sapphire Preferred from Chase to get the bonus points, but then downgrade to the normal Sapphire to avoid the annual fee. It's a sound strategy, even though it might make a lender think you're a churner.

ohh i see..so that's what people does lol

never thought about downgrading...

thanks for info =)

Re: how bad is carrying balance in terms of Credit history?

Anonymous — Fri, 20 Dec 2013 16:48:42 GMT

@Anonymous wrote:
@Stralem wrote:
@Anonymous wrote:
while i'm at this topic, i have another question;
i see many people get a card for one year for perks (0% into AF for first year, bounus points etx), then get rid of the card before one year..

is it okay to do that ? i mean, wouldn't it show on credit history and when lenders see it, it could come as negative?
Few people actually get rid of the cards. What most people do is simply downgrade (or "product change") their card to one with similar benefits but no annual fee.

For example, many people get a Sapphire Preferred from Chase to get the bonus points, but then downgrade to the normal Sapphire to avoid the annual fee. It's a sound strategy, even though it might make a lender think you're a churner.
ohh i see..so that's what people does lol
never thought about downgrading...
thanks for info =)

And people do close as well (to reduce overall credit or credit with one issuer if you want something else from them). Generally, doing it a "little" is OK, there are always valid reasons why someone wants to close a card (their needs/plans changed etc). Just don't do it to often with a single issuer!