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Is it better to maintain a small balance on credit cards?

Mad12345
Contributor

Is it better to maintain a small balance on credit cards?

Is is better to maintain a small balance on my credit cards. I have been trying to maintain a zero balance and friend told me that may not be good.

Message 1 of 14
13 REPLIES 13
KLEXH25
Valued Contributor

Re: Is it better to maintain a small balance on credit cards?

Hi @Mad12345 and welcome to the forums!

 

How many credit cards do you have? You don't need to "maintain" or carry a balance on your cards (and pay interest) if that is what you mean. What you want to do is let at least one of your cards "report" a small balance, and then pay it off in full. Usually, a lender will report the balance of the card on the date that your statement cuts. This is different from the date that you have to pay.





Message 2 of 14
AllZero
Super Contributor

Re: Is it better to maintain a small balance on credit cards?

For optimized scoring, seek AZEO All Zero Except One card reporting a small balance e.g. $5 - $10.

 

I would recommend reading the below from ABCD2199
The Truth about Credit Card Utilization
My 11 Rules to Credit Rebuilding
FICO Score: What to pay down first?

From Birdman7
General Scoring Primer and Version 8 Master Thread rev.5.17.20

Message 3 of 14
Mr_Mojo_Risin
Valued Contributor

Re: Is it better to maintain a small balance on credit cards?

Let a small balance of less than 8.9% post on 1 card. After it posts pay that in full before your due date.

All zero except one (AZEO)

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Message 4 of 14
Girlzilla88
Valued Contributor

Re: Is it better to maintain a small balance on credit cards?

To piggyback be sure the card you report is a Bank Card ^^










Message 5 of 14
Mad12345
Contributor

Re: Is it better to maintain a small balance on credit cards?

I have 2 prepaid and 5 others. Thank you for your reply. I am trying to rebuild after bankruptcy, but i didn't really have a good understanding of how to use/build credit before. I have seen some very good info on this site. 


@KLEXH25 wrote:

Hi @Mad12345 and welcome to the forums!

 

How many credit cards do you have? You don't need to "maintain" or carry a balance on your cards (and pay interest) if that is what you mean. What you want to do is let at least one of your cards "report" a small balance, and then pay it off in full. Usually, a lender will report the balance of the card on the date that your statement cuts. This is different from the date that you have to pay.


 

Message 6 of 14
Mr_Mojo_Risin
Valued Contributor

Re: Is it better to maintain a small balance on credit cards?


@Girlzilla88 wrote:

To piggyback be sure the card you report is a Bank Card ^^


Yes! Definitely this 👆

NFCU More Rewards 24K CL
NFCU Cash Rewards 4000 CL
Discover IT 1,000 CL
Quicksilver 600 CL (formerly Platinum)
NFCU auto loan
*We survived it, now comes the progress*
Previously Bowiefan
Message 7 of 14
Mad12345
Contributor

Re: Is it better to maintain a small balance on credit cards?

Thank you for this info. As i said earlier, i really didn't know how to manga and build credit. These responses are really helping me.


@Mr_Mojo_Risin wrote:

@Girlzilla88 wrote:

To piggyback be sure the card you report is a Bank Card ^^


Yes! Definitely this 👆


 

Message 8 of 14
KLEXH25
Valued Contributor

Re: Is it better to maintain a small balance on credit cards?


@Mad12345 wrote:

I have 2 prepaid and 5 others. Thank you for your reply. I am trying to rebuild after bankruptcy, but i didn't really have a good understanding of how to use/build credit before. I have seen some very good info on this site. 


So of those 7 cards, 2 are prepaid? What are the other 5 cards? Are they store cards? Bank cards? Major credit cards? It's important that the one card you allow to report a balance is a major credit card or bank card. This will give you the best scores. Of course it's ok to use your cards as usual and pay them as needed. Scores can change month to month. What are you scores now?





Message 9 of 14
SouthJamaica
Super Contributor

Re: Is it better to maintain a small balance on credit cards?


@Mad12345 wrote:

Is is better to maintain a small balance on my credit cards. I have been trying to maintain a zero balance and friend told me that may not be good.


No it's best not to maintain balances at all.

 

For scoring it's best to let one bank card report a small balance each month, before you pay it off, while all the other cards report a zero statement balance.

Message 10 of 14
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