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Card balances

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Anonymous
Not applicable

Card balances

Is it better to

  1. Never use cards unless needed
  2. Use cards regularly (example: automatic bill payments) and pay them off immediately
  3. Use cards regularly for bigger things (example: automatic bill payments and weekly groceries) and pay them off immediately
  4. Use cards regularly and maintain a balance
  5. Something else?

I've always tried to do #1 because I assumed it was best. Now that I'm doing research and trying to squeeze my score as high as possible I'm seeing some people say to keep a small balance. If I'm doing that, how do I avoid increasing costs from only making minimum payments?

Message 1 of 8
7 REPLIES 7
Grizzly1
Contributor

Re: Card balances

Your options 2 & 3 are basicly the same. That being said  usually either is the best route. Idealy most people on here would agree that paying off all but one card before they report and have only one card report under 9% of your total credit limit. Also known as AZEO

8/2019: EQ 617, TU 578, EX 628
9/2021: EQ 684, TU 662, EX 671
Message 2 of 8
Remedios
Credit Mentor

Re: Card balances

@Anonymous   hi and welcome 

 

Do not carry a balance if you dont have to. Allowing balance to report and carrying one are two different things. 

 

If your cards have rewards, use them for everything. Depending on your limits, you may need to pay it down before closing date if you're trying to squeeze every point. Allowing less than 29% of your limit to report is good. For points "squeeze", less than 9%

It's absolutely unnecessary to keep it below 9% if you are not planning any important apps. 

Once statement is generated, pay it off in full. 

 

Even if your cards have no rewards, I'd still use them so you can establish a "relationship" with a lender providing it's a good one. 

 

Are you rebuilding or is this a general question? 

 

Message 3 of 8
FireMedic1
Community Leader
Mega Contributor

Re: Card balances

Welcome to the forums. I'll just use myself as an example. There isnt anything I purchase that I dont use a card for. This way I get cash back and get rewarded for using the card from the bank. If you dont use the cards and still do most of your everyday expenses. Your losing out on profit for yourself. Think of them as a debit card which it seems you may be doing. Once before statement date comes. You pay all the cards off  and leave 1 card to report a balance around 2-5% and then pay it after statement date. Then repeat the cycle all over again.

 

Some of my cards have the same grocery 2% cash back. So I alternate them every month. This way if they arent use for a long time. The bank wont get itchy to close them for non use. Each bank is different this way. Depends on who the creditor is. I can say in the 4 yrs since starting over I'd say I've earned 3-4k dollars in CB. The banks are paying me to use the card. I dont pay interest. Why pay interest and lose out on your cash back or as I call it. Profit for me.

 

Hope that helps. Plus using the cards. You have a better chance at a CLI when needed. No use. Why give more if your not using it.


Message 4 of 8
Anonymous
Not applicable

Re: Card balances


@Remedios wrote:

Are you rebuilding or is this a general question? 


 Not rebuilding per se. I've rebuilt and am up over 700 now. I'm looking to get higher and higher and higher. Smiley Very Happy 

Message 5 of 8
Anonymous
Not applicable

Re: Card balances


@FireMedic1 wrote:

Welcome to the forums. I'll just use myself as an example. There isnt anything I purchase that I dont use a card for. This way I get cash back and get rewarded for using the card from the bank. If you dont use the cards and still do most of your everyday expenses. Your losing out on profit for yourself. Think of them as a debit card which it seems you may be doing. Once before statement date comes. You pay all the cards off  and leave 1 card to report a balance around 2-5% and then pay it after statement date. Then repeat the cycle all over again.

 

Some of my cards have the same grocery 2% cash back. So I alternate them every month. This way if they arent use for a long time. The bank wont get itchy to close them for non use. Each bank is different this way. Depends on who the creditor is. I can say in the 4 yrs since starting over I'd say I've earned 3-4k dollars in CB. The banks are paying me to use the card. I dont pay interest. Why pay interest and lose out on your cash back or as I call it. Profit for me.

 

Hope that helps. Plus using the cards. You have a better chance at a CLI when needed. No use. Why give more if your not using it.


Looks like it's time to switch habits. I've got a few cards (Chase Freedom and Discover) that give 5% on specific categories every quarter.

 

A year ago I switched to living totally with cash whenever possible. I take out what I budgeted on payday and then use it everywhere. I kinda needed to do that to get my spending in check and measure exactly how much I was using. Nowadays I update my balance spreadhseet every couple of days so I'll know if I'm getting too close to feeling like I'm going overboard.

Message 6 of 8
FireMedic1
Community Leader
Mega Contributor

Re: Card balances

One example. Couple months ago I got my cash back match on my 2cd Discover card. I learned the tricks to get the most cash back match from my first Disco card which is now a Chrome. Once they matched me at years end. I went to Mattress Firm on Memorial Day when they have their best sales. I purchased a Serta Ultra Plush mattress with an adjustable stand with remote control. Disco paid for it. Me zippo. And then got new down pillows and still went out to dinner and had my favorite steak and lobster dinner at me and my GF's fav restaurant all on them. Got to play the the game right. Time to make some profit I say. Good Luck!!!!!!!!!!


Message 7 of 8
Anonymous
Not applicable

Re: Card balances

I've known people that give themselves a weekly cash budget, and if it works for them fine. I've never been one that likes to keep that much cash on hand, plus for me it's harder to keep track of. The one aspect I don't care for is, that if you're out of cash at the end of the week, it's gonna be a long weekend. lol

 

I prefer putting everything on CC as said above for the rewards. I'm also not one that spends frivolously, so my CC bill at the end of the month isn't beyond affordable. I've heard of people just spending and spending not realizing how much they've charge, but if you have a specific spending pattern and don't stray from it you'll be fine. A person just needs to be able to resist the urge to spend outside their budget.

 

If you're into spread sheets you should be okay. Also most CC/mobile walltes these days offer charge alerts, as well as spending trackers. So even people on smartphones all day should be able to keep spending in check. I get alerts every time my Amex cards are used via Samsung Pay. Plus most of them have their own apps, but I haven't really gotten into all that yet. 

Message 8 of 8
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