I got a few credit cards when I started college, filled them up, and have been sitting on the balances for the last few years. Now that I've graduated and have a job, I can afford to pay off the balances completely within a couple of months. My question is, should I pay them off completely, or should I leave a small balance on them? I have heard that credit card companies want you to have some kind of balance on your card so that they are still making money off of your interest, but is that true? Any advice is appreciated!
2007-09-05 14:06:36 · 13 answers · asked by Grace1228 3 in Business & Finance ➔ Personal Finance
pay them off completely, and then use them every once in a while but pay them off that same month. What does it matter what the credit companies want? my boyfriend has a card he rarely uses, and they keep giving him increases and special balance transfer rates to get him to use it... make them want you!! The only way it MAY look bad is if you absolutely never use it, but you gave it plenty of use through college so you should be fine. My boyfriend rarely uses his, and his credit score is currently a 788, and he is 25.
2007-09-05 14:17:19 · answer #1 · answered by sami_sam 4 · 0⤊ 0⤋
Past due debts that are over 30 days late will demolish your credit score. That aspect alone makes up a third of your credit score. To be safe never go passed the 30 days late period with any late payment. One payment made passed the 30 day mark will stay on your report for a very long time. When a creditor pulls your credit they won't care what the reason was so don't let this happen.
There is such a thing as a free credit report. Remember that this is a report and not a score. It gives you all the accounts you have and all the activity related to your credit. It does not give you a number (your score). The government sponsored site is: annualcreditreport.com. Read more from: http://www.credit-card-gallery.com/article/136,Seven_Must_Know_Credit_Tips
2007-09-05 23:30:16 · answer #2 · answered by alexa dion 3 · 0⤊ 0⤋
There is absolutely no reason to leave a balance on a card if you can afford to pay it off. By leaving a balance, you're only costing yourself money in the way of interest every month. Pay the cards off, but keep them open, in case of emergency. If you want your cards to show as active, just charge something and then pay it off so you don't have to pay interest.
2007-09-05 16:07:33 · answer #3 · answered by darylsgirl1114 4 · 0⤊ 0⤋
Sorry. But the others are wrong. Paying off your credit card in full everything month is a great thing. But carrying a balance from time to time is also a great thing. A credit card is what loan officers like myself call “revolving lines of credit”. A revolving credit line can be used when needed and paid off when needed. When you payoff your balance every month you are showing the credit card company that your just using the card as a means of purchasing power during the month and then paying it off when you get your paycheck during the same month. But the sole purpose of a credit card is to provide you the customer a line of credit to be used for purchases that you might not be able to completely afford during a normal budget cycle in your personal finances. Charging something on a credit card in January and paying on it till March or April is a good thing. It shows the bank/creditor that your using your credit as needed to allow you to make purchases that meet your wants or needs. A credit card is in practicality, a loan. Why do you get a loan? To help you meet a financial need or want in the present by paying it off over time with a maturity date in the future. If you get a credit card and jack up the balance on it and never pay it off for a year or two at time, it shows the creditor and other creditors that your not managing your finances correctly. BUT if you purchase something in January and it takes you a couple of months to pay it off, you are showing the creditor and other creditors that you are responsibly using your credit and showing financial responsibility. That in turns builds your credit. Interest is just something you pay in return for the availability of a credit card. If you have the money to pay off your credit card debt, I would pay it off if the debt has been sitting for a few months. But keep using your credit, but don't get over your head in debt.
2016-05-17 16:32:19 · answer #4 · answered by ? 2 · 0⤊ 0⤋
Of course credit card companies would rather that there is a balance on the credit card. If there is a balance the company gains money from interest. I always pay off my credit card bills...don't see any harm in it.
2007-09-08 12:28:14 · answer #5 · answered by sabri 3 · 1⤊ 0⤋
Yes, credit card companies do want you to have a balance so that they can make money off of you but there is no reason to maintain a balance.
You should pay off your balance as fast as you can.
2007-09-05 14:43:24 · answer #6 · answered by Tim 2 · 0⤊ 0⤋
Don't worry about what the credit companies want they want to make interest on the account your right. If you can pay them off go ahead because in case you every need to fall back on them you will have enough to do so. Think about what is best for you.
2007-09-05 14:20:53 · answer #7 · answered by Marianne F 2 · 0⤊ 0⤋
Pay off all balances and don't close the accounts. your credit rating will look good if you pay off and not close the accounts. Also call for better rates. Keep the cards for emergency.
2007-09-05 14:29:38 · answer #8 · answered by Goodhead 3 · 0⤊ 0⤋
Pay them off. Your credit report will show 0 Balance and that's what lenders want to see when you want to buy something large like a car or house.
2007-09-06 06:01:50 · answer #9 · answered by KathyS 7 · 0⤊ 0⤋
Pay off any and all cards as fast you can. Keep the balances at zero. Paying interest is wasting money.
2007-09-05 14:10:57 · answer #10 · answered by jeff b 1 · 2⤊ 0⤋