Hi Nutmegger. Here is what I wrote to you:
When you get a credit card statement in the mail (or online) it will have an "Amount Owed" at the top. Do you always pay that amount in full? If so, you are not carrying a balance at all. Your card is reporting a balance, but not carrying one.
Here's what you wrote back. I have added some comments of my own in blue.
@Anonymous wrote:
I used blue sky credit to help with my clean up and while my contract with them has ended they recommended I maintain a small balance on each card keeping the total utilization under 10%. They told me that any time I pay the full balance on a card...
Note that I didn't ask you if you were paying the full balance on the card. I asked if you were paying the full "Amount Owed" at the top of the statement. When a person uses a card with any regularity, by the time he gets his statement in the mail, the balance on the card will be greater than the amount owed listed on the statement, since he will have likely made a charge on it since the statement printed (gas, groceries, a hamburger, whatever).
and the amount owed is reported to the bureaus at $0....
Even if you paid the full balance on a credit card (which is different from paying the full amount on the statement), that would not necessarily cause the card to report $0 to the credit bureaus. One reason is that you might well make purchases on that card after you made that payment (but before the card reported).
... the bureau "can't read" a $0 so maintaining a small balance on each card is preferable. That's what I've been doing -always paying more than the minimum and leaving just a small balance. Others on this forum have been suggesting I pay the entire balance on all cards except for 1.
I am sensing there are fundamental things about credit cards and payments and statements and what gets reported to the bureaus and when and why -- that you do not yet understand. Which is why when I asked if you were paying the amount on the statement in full you got confused and responded back with an explanation about paying the card's balance. Understanding this very basic stuff is crucial if you are going to make the best choices for yourself.
I encourage you to get with some of the people at the forum, possibly somebody on this thread, who can walk you through what all these terms mean and what they refer to.
