What's Normal? - Do you pay off your credit cards monthly or carry a balance? (1 Viewer)

[Keerock]

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Do you pay off your credit cards monthly or carry a balance?

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Poll topic suggested by Da Raiders. Thanks!

 

[Keerock]

I pay off monthly, with the exception of a 0% balance transfer from 16 months ago that I will pay off when it expired in 6 months.

 

[the moops]

Amex here. Pay off every month. It is anywhere from 5K - 10K typically

 

[belljr]

Pay it off .....I don't carry a balance like some weirdo ....

 

[jobarules]

Amex here. Pay off every month. It is anywhere from 5K - 10K typically

I thought I was the only one. I also pay off monthly.

 

[Galileo]

Use it for almost all transactions...pay off every month

 

[Hawks64]

So I pay the statement balance every month but will usually have a balance month to month that doesn't carry interest.

 

[belljr]

So I pay the statement balance every month but will usually have a balance month to month that doesn't carry interest.

um thats paying it off every month

 

[ChiefD]

We pay everything on it and get cash back from Costco. So we pay it off every month. Some of those bills can be downright scary.

But we usually get a check around $1100 back each year of literally free money.

 

[IvanKaramazov]

Use it for almost all transactions...pay off every month

Same.

Given the age of this board, I'm guessing the outcome of this poll will be very lopsided.

 

[Dr. Octopus]

Alternate title to this topic: "Are you stupid?"

 

[guru_007]

Use it for almost all transactions...pay off every month

Same.

Given the age of this board, I'm guessing the outcome of this poll will be very lopsided.

Agreed.
I got my first credit card on spring break, at 21 years old. Had nothing at all to do with the scantily clad young women working the booth at the hotel lobby. free money, college kid, bars. Needless to say I carried a balance from 21-37 years old. Between paying for my own wedding, kids, etc... there was no way I could pay in full. Did the balance transfer bit quite a bit so my marginal interest was relatively decent, but still paying fees every month. At 37 finally paid it off and swore would never carry a balance ever again. So far so good.

 

[Keerock]

Alternate title to this topic: "Are you stupid?"

For some it's less stupidity and more necessity.

 

[Hawks64]

So I pay the statement balance every month but will usually have a balance month to month that doesn't carry interest.

um thats paying it off every month

Well, it could be the literal paying it off, like the entire balance. Wanted to be clear

 

[jobarules]

We pay everything on it and get cash back from Costco. So we pay it off every month. Some of those bills can be downright scary.

But we usually get a check around $1100 back each year of literally free money.

Same

 

[CGRdrJoe]

Alternate title to this topic: "Are you stupid?"

other Alternate title would be are you still in your 20's and already have a wife and kids....

 

[Dr. Octopus]

Sure, I was mostly joking and I get that some people "have to" carry a balance - but it's obviously a terrible idea that just compounds the problem. The rates are insane.

 

[FBG26]

I pay off monthly, with the exception of a 0% balance transfer from 16 months ago that I will pay off when it expired in 6 months.

I voted pay off monthly but I also have about $40k sitting on one card from a 0% interest balance transfer offer about a year ago. Used the $40k to buy i-bonds. Paid a 2% upfront fee to borrow the money, the i-bond has paid like 7% (maybe higher, it was a lot), and will still make a good chunk of change after paying taxes on the i-bond interest.

 

[belljr]

I just write it off

 

[Zow]

Carry a small balance. Per my financial advisor that helps with one's credit.

 

[Dr. Octopus]

Per my financial advisor that helps with one's credit.

Why? I'm not disagreeing - just seems counterintuitive so wondering what I am missing.

 

[belljr]

Carry a small balance. Per my financial advisor that helps with one's credit.

Yeah I'll disagree here. I'm not paying a bank money just to keep a few credit points.

But I already have a :flex: credit score

 

[IvanKaramazov]

Carry a small balance. Per my financial advisor that helps with one's credit.

I've always been under the impression that this might not be a bad idea for young person, but that having a mortgage and paying it on time every month pretty much completely takes care of one's credit score, assuming no problems elsewhere.

Not that carrying a small balance for this purpose is particularly costly of course.

 

[ChiefD]

Carry a small balance. Per my financial advisor that helps with one's credit.

Interesting. I always thought paying off your balance each month boosts your credit.

 

[dino259]

Carry a small balance. Per my financial advisor that helps with one's credit.

Yeah I'll disagree here. I'm not paying a bank money just to keep a few credit points.

But I aleady have a :flex: credit score

I also don't believe that is correct. I work at a credit union and I believe the way our reporting works is that we report to the credit bureau monthly and report the amount of your statement balance. There are many different calculations of credit scores and the biggest factor is making payments. Percent of credit available is also a factor but I am thinking it is a smaller percentage.


We use our credit card for most everything. Pay the statement balance of about $2k monthly.

 

[bigbottom]

Put most everything in on our credit card for points, but pay it off every month without exception. Aside from our mortgage, if we can’t afford to pay off a purchase immediately, we don’t make the purchase.

 

[belljr]

Carry a small balance. Per my financial advisor that helps with one's credit.

I've always been under the impression that this might not be a bad idea for young person, but that having a mortgage and paying it on time every month pretty much completely takes care of one's credit score, assuming no problems elsewhere.

Not that carrying a small balance for this purpose is particularly costly of course.

Yeah if thats all I got - I can see that. But auto loans, mortgages, other cards. It doesnt make sense to do it. Plus too many small balances dings you. As noted above its more about available credit and usage are the bigger factors.

But I already have great credit so For me there is no need

 

[coopersdad]

I just write it off

"do you even know what a write off is".
"no, but they do, and they're the ones writing it off".
-Kramer

 

[Bogart]

Pay off every month. Have a rotation of about 9 cards depending on what points/cashback I can get. Typically run through twice a month and just pay everything off on payday to keep my usage down. Been 10 years since my divorce crushed my credit score and almost back up to 800.

 

[brun]

3 cards
Automatic payments in full every month.

 

[STEADYMOBBIN 22]

Career change, kids, and life are all reasons we carry a balance on two cards that we’re working off.

Guess we’re stupid.

 

[Keerock]

Offshoot: When I pay my CCs every month, I round up to the nearest $50. For example, if the balance due is $764.23 I will pay $800

 

[jobarules]

I don't use credit cards/credit is the devil

 

[Mrs. Rannous]

I don't use credit cards/credit is the devil

Nah. You just have to game the system. We have a card with a low interest rate, and generally pay it off every month. When we moved, we used it as a bridge to loan ourselves money until we could sell the old house. A couple of hundred dollars interest gave us a comfortable cushion while we owned the two houses.

 

[Chemical X]

Carry a small balance. Per my financial advisor that helps with one's credit.

not necessarily accurate….

 

[dkp993]

Use it for almost all transactions...pay off every month

Yep. Points game. We play too.

 

[Zow]

Carry a small balance. Per my financial advisor that helps with one's credit.

not necessarily accurate….

I'm happy to relearn this issue. Can you advise why it may not be accurate?

 

[belljr]

Does Carrying A Balance On A Credit Card Hurt Your Credit Score?

But is carrying a balance on your credit card always a bad idea? And is it bad for your credit score? Check out our expert advice to find out.

www.forbes.com

As a Tool To Improve Credit Score
Carrying a balance on a credit card to improve your credit score has been proven as a myth. The Consumer Financial Protection Bureau (CFPB) says that paying off your credit cards in full each month is actually the best way to improve your credit score and maintain excellent credit for the long haul.

If your goal is improving your credit score, the best way is to pay all your bills early or on time, keep your credit balances low, fact check your credit reports and dispute any errors you find, and avoid opening credit accounts you don’t need.

 

[Zow]

Per my financial advisor that helps with one's credit.

Why? I'm not disagreeing - just seems counterintuitive so wondering what I am missing.

I don't know. I'm simply going off what my financial advisor told me years ago. I've seen him puking in toilets back when we played ball together in college, so I'm not championing him as some financial guru either.

I guess I never questioned him because my credit score is really good. But, I paid off my student loans like a rockstar and have never missed a mortgage payment. So, I don't know whether keeping a small credit card balance each month helped that (though I always assumed it did).

 

[Keerock]

Does Carrying A Balance On A Credit Card Hurt Your Credit Score?

But is carrying a balance on your credit card always a bad idea? And is it bad for your credit score? Check out our expert advice to find out.

www.forbes.com

As a Tool To Improve Credit Score
Carrying a balance on a credit card to improve your credit score has been proven as a myth. The Consumer Financial Protection Bureau (CFPB) says that paying off your credit cards in full each month is actually the best way to improve your credit score and maintain excellent credit for the long haul.

If your goal is improving your credit score, the best way is to pay all your bills early or on time, keep your credit balances low, fact check your credit reports and dispute any errors you find, and avoid opening credit accounts you don’t need.

Carrying a balance on a credit card to improve your credit score has been proven as a myth. The Consumer Financial Protection Bureau (CFPB) says that paying off your credit cards in full each month is actually the best way to improve your credit score and maintain excellent credit for the long haul.

 

[D-Day]

I actually started paying my card balance the day before closing statement and my credit rating went up by 6 points. I have always paid in full automatically, but I thought I would see what happened if I lowered my usage to around zero at reporting date.

 

[nirad3]

Career change, kids, and life are all reasons we carry a balance on two cards that we’re working off.

Guess we’re stupid.

We're in this boat too.

 

[Keerock]

I actually started paying my card balance the day before closing statement and my credit rating went up by 6 points. I have always paid in full automatically, but I thought I would see what happened if I lowered my usage to around zero at reporting date.

So your statement balance is always (near) zero? Interesting!

 

[Ministry of Pain]

I only voted "Don't Pay Off Monthly" because many times when we make a larger purchase for the home, we get 0% for a limited amount of time, might be 6 months, 12 months, 18 months, and we understand if it goes a day past the limit we are subject to a lot of interest but sometimes it makes a purchase feel a little easier in the moment. We always pay them off, we always pay off any credit cards with high interest, also try to pay cash many places and save money often that way.

Most of these credit cards you all hail for the points and money back you get, they aren't all 0%, in fact most are double digits and well over 20% if you don't pay them off every month.
Other than the house we don't have any debts and the house was redone at 2.9% so i'm not in a hurry to pay it off any time soon.

I am considering a Home Equity Line for some remodeling but with the interest rates on mortgages at a 22 year high possibly, doubt the numbers are going to look appetizing.

 

[D-Day]

I actually started paying my card balance the day before closing statement and my credit rating went up by 6 points. I have always paid in full automatically, but I thought I would see what happened if I lowered my usage to around zero at reporting date.

So your statement balance is always (near) zero? Interesting!

I have only done this for the past couple of months, but yes, the balance statement for all cards were $0 to $100. I don't think I will continue to do this because it really doesn't affect my financial life too much. If I were planning on buying a home or car and needed a few extra points on the credit score, this is an easy way to do so.

 

[Ministry of Pain]

I doubt anyone is going to post in here that they carry a balance month over month at 24% compound interest and that's the part that hurts you the most, yeah it's a high number but it's compounded daily and in essence you are the bank's investment and they are getting huge returns on those investments.

The average American is carrying like $10K in credit card debt, many cannot afford to get by without their credit cards which is scary.

 

[Keerock]

I actually started paying my card balance the day before closing statement and my credit rating went up by 6 points. I have always paid in full automatically, but I thought I would see what happened if I lowered my usage to around zero at reporting date.

So your statement balance is always (near) zero? Interesting!

I have only done this for the past couple of months, but yes, the balance statement for all cards were $0 to $100. I don't think I will continue to do this because it really doesn't affect my financial life too much. If I were planning on buying a home or car and needed a few extra points on the credit score, this is an easy way to do so.

But the closing date is after the due date... so do you then also have to pay that $100 at the due date?

 

[Raging weasel]

Career change, kids, and life are all reasons we carry a balance on two cards that we’re working off.

Guess we’re stupid.

We're in this boat too.

Got room for 1 more?

 

[-OZ-]

Carry a small balance. Per my financial advisor that helps with one's credit.

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I assumed this was a joke. If not, you need a new financial advisor.

We set ours to automatically pay the full statement amount every month, like I have since I opened a card 29 years ago (automatic wasn’t available then). Never paid a cent in interest. Score over 800.

 

[-OZ-]

I actually started paying my card balance the day before closing statement and my credit rating went up by 6 points. I have always paid in full automatically, but I thought I would see what happened if I lowered my usage to around zero at reporting date.

Probably utilization.

From myfico.com:

Some financial experts recommend keeping your credit utilization ratio below 30%. However, the data doesn't support the implication that your credit score will dip once your utilization ratio crosses the 30% threshold.

Just like every other factor in your FICO® Score, the impact your credit utilization ratio will have on your score will vary based on a number of factors.

That said, generally the lower your ratio is, the better. Generally, keeping it below 10% (and consistently paying bills on time) can help you build and maintain a good FICO® Score.

That said, you want to be careful about having a utilization ratio of 0%. This is because it signifies that you're not using your credit cards at all, giving FICO less information about how you manage your money. While a 0% utilization ratio won't cause your FICO® Scores to drop significantly, it can prevent you from achieving maximum points for the amounts owed score ingredient.


Personally, we have 12 cards open (I think) and use five. All together our available credit exceeds my annual income so our utilization is below 10% anyway.