I have 0% APR credit card for 12 months. Is making the minimum payment for the first 11 months and then paying the rest of the balance off before my 0% is up gong to hurt my FICO score.
I have the money to pay off the amount but thinking that 0% interest while i'm getting 5% on my bank acct I will earn a little bit of money. Unless this will affect my FICO score alot then i'll rethink it.
2007-05-04 11:59:17 · 8 answers · asked by Anonymous in Business & Finance ➔ Credit
If you have borrowed a high percentage of your available credit on this card, you will probably have a decrease to your FICO score - anything over about 50% will probably result in a noticeable decrease in your score.
Depending on how many other cards you have and what their credit lines/balances are, you may also have a decrease due to your overall debt/available credit ratio. Anything over about 35% will probably result in a noticeable decrease in your score.
Combined, both these factors may drop your FICO score by 10 - 50 points, depending on other factors.
2007-05-04 12:18:17 · answer #1 · answered by aj485 5 · 0⤊ 0⤋
From a credit score point of view, you don't want to have a maxed out credit card. They like to see it at about 25% of your total available credit limit. So in a sense, AJ's answer is right. If you have other sources of credit, that will help lessen the impact.
But from a pure financial point of view, having a 0% loan is simply fantastic! Just be sure you don't do something silly like not have enough money to pay it off after your 12 months is up, and be sure to make those minimum payments.
Don't worry about your credit score now unless you are planning some sort of major purchase soon.
2007-05-06 08:10:56 · answer #2 · answered by Anonymous · 0⤊ 0⤋
No it will not hurt your credit. Actually, it looks good for you. If I were you...I would enjoy the 0% interest while it lasts...than right before its going to be over I would pay off.
Sure you may be getting 5% from your bank but I bet the amount you must pay in interest for you CC after the 12th month is most likely going to be more than the 5%.
2007-05-04 12:28:32 · answer #3 · answered by smile4cobra 3 · 0⤊ 0⤋
While you certainly are right on the particulars, you might want to do a little calculating. It probably would be interesting to see how much money you'd make by following this plan. Obviously I don't know how much you spend per month.
The risk is if something goes wrong after 11 months, and you are late. Me, I kind of like paying my bills completely and quickly. But -- if the numbers add up and you are following it closely, you should be OK.
2007-05-04 12:10:38 · answer #4 · answered by wdx2bb 7 · 0⤊ 0⤋
Depends on what the credit limit is and how much credit history you have. If you are over 50% of your limit then it will hurt your scores. If you have limited credit, it will usually hurt your scores for the first few months regardless with any new line.
Are you planning on buying anything? If not, you shouldn't care.
2007-05-04 12:14:08 · answer #5 · answered by Theworldismaddening 2 · 0⤊ 0⤋
Enjoy the zero interest. As long as you are paying on time.
2007-05-04 12:02:43 · answer #6 · answered by csucdartgirl 7 · 0⤊ 0⤋
you have the right idea. Just make sure you pay on time. If you are late even once, they can tack on late fees or start charging interest.
2007-05-04 12:04:08 · answer #7 · answered by theflynnmom 4 · 0⤊ 0⤋
You can pay it offf but don't close it out. If you close it out your credit score will drop.
2007-05-04 14:50:39 · answer #8 · answered by BJK 2 · 0⤊ 0⤋