Should I use savings or carry a balance!

[kdm31091]

I see nothing wrong with carrying a balance if you have a specific reason and a plan to pay it down. Take note that your score will temporarily go down if you carry a large balance, but it will recover as you pay it off. With no apps planned, doesn't matter.

I would recommend a split approach as well; if carrying the balance is going to practically max out your card or anything, then use some savings and charge the rest. Never drain all of your savings though IMO because that's liquid cash and you need to have some available.

[longtimelurker]

With such a high interest rate, I would much rather dip into savings, but it also depends on what fraction of savings we are talking about.

If paying it would use a large proportion of my savings, I MIGHT need to think harder, and maybe decide to pay the excessive interest, to maintain a safety net for immediate expenses that cannot be paid over time.

But otherwise, no,  "Save" the interest and use savings, you are not "paying yourself first" by letting all that interest money go to a ccc.

[takeshi74]

---

@Nova5041 wrote:
This might be a silly question, but I have a large expense that I can not pay at once and would need a few months to pay off. I was thinking of just going into my savings and paying off the expense once i received the credit card bill or should I leave the savings alone and just make payments to my credit card company. 

---

It's not silly at all but there isn't one answer that applies for every person and situation.  While the card will charge you more interest than you'll earn with savings that isn't the only consideration.  You should have an idea of what cash reserves you need/want and your level of comfort when dipping into them.  Are you fine with reducing your savings balance by that amount for the few months you would have needed need to pay that balance so you can replenish your savings?  Are there any other foreseeable events in future that might have an impact?

[Anonymous]

I know you said your scores weren't great, but maybe something else to consider would be taking out a personal loan?  I believe you should be able to find something with a lower interest rate than your CSP.  Have you checked with whomever you're making the purchase from as well to see if they have any financing options?

[lhcole77]

And never overlook the fact that carrying balances (of any reasonable size) and paying them off in a timely manner shows creditors responsible behavior.

I carry a small balance (on non 0% cards) from time to time, pay a buck or two of interest here or there. I throw a little change at my lender every now and then. I can't guarantee that it has helped increase my internal scoring or success with lenders, but I do know that all my cards have successfully grown over the years and I have used this strategy from day one.

[longtimelurker]

---

@lhcole77 wrote:

And never overlook the fact that carrying balances (of any reasonable size) and paying them off in a timely manner shows creditors responsible behavior.

I carry a small balance (on non 0% cards) from time to time, pay a buck or two of interest here or there. I throw a little change at my lender every now and then. I can't guarantee that it has helped increase my internal scoring or success with lenders, but I do know that all my cards have successfully grown over the years and I have used this strategy from day one.

---

Even if it was responsible, I have problems justifying paying any interest for "growth".   What is growth worth in real terms (past a certain point)?   And, I have never paid interest and seen many of my cards grow.   Getting money from swipe charges should be enough

[Anonymous]

---

@longtimelurker wrote:

---

@lhcole77 wrote:

And never overlook the fact that carrying balances (of any reasonable size) and paying them off in a timely manner shows creditors responsible behavior.

I carry a small balance (on non 0% cards) from time to time, pay a buck or two of interest here or there. I throw a little change at my lender every now and then. I can't guarantee that it has helped increase my internal scoring or success with lenders, but I do know that all my cards have successfully grown over the years and I have used this strategy from day one.

---

Even if it was responsible, I have problems justifying paying any interest for "growth".   What is growth worth in real terms (past a certain point)?   And, I have never paid interest and seen many of my cards grow.   Getting money from swipe charges should be enough

---

This is me.  I don't plan on paying a dime of interest to a credit card company as long as I live.  Obviously situations may arise where I have to, but certainly not on purpose. 

[lhcole77]

Definitely not part of everyone's game plan   That's for sure

[Anonymous]

Another question is "where are the savings located?" Are they in an IRA or 401k, where you will have to pay a penalty for a withdrawal? Or are they in a typical savings account provided by a bank, where you can access them easily? If it is the IRA/401k route, I would probably put it on the card and eat the interest. If it is savings, I would rather dip into the savings account and set myself a repayment plan. If you are truly ambivalent about the interest, then you might as well pay it to yourself, rather than the CCC.

[lenz99]

Unless you're in 0 APR, don't carry a balance if you can PIF.

One major problem with balance, especially a very small one(purposely), is that the grace period will be gone and all new purchase starts incurring interest at the time of purchase immediately.