Is it better for your credit score to pay off a credit card bill full or by minimum payments?

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2 Comments
  1. Reply
    SPIFIMAN1
    June 26, 2011 at 1:29 pm

    Score wise it makes no difference as long as your balance is below 30% of your credit limit.

    Common sense wise it’s much better to pay them off in full every month so you never pay interest.

    And you really don’t have to worry about your cards showing a balance because the difference between the billing date and the due date will always leave a small balance to be reported so either way your building a good payment history which makes up a full 35% of your credit score.

    I have used 3 cards for the last 2 years for just about everything I buy every month and always pay them off in full, in this time I have raised my score over 150-points and made several hundred dollars in cash back rewards not bad for using someone elses money for free.

  2. Reply
    jlf
    June 26, 2011 at 2:05 pm

    SPIFIMAN is correct. It is a myth that carrying a balance “builds credit.” In fact, paying only the minimum month after month is a yellow flag to the lender that you may be overextended and could motivate them to lower your credit limit or even close the account.

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