Is it bad or good to carry a small balance on a card?

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invaliduser
 
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Is it bad or good to carry a small balance on a card?

Postby invaliduser » Wed Mar 14, 2012 9:39 pm

Hey I'm new around here but I've always wondered if this affects my credit score and was hoping someone here would have the answer for it

If I have an Amex Blue Cash Preferred card with the introductory 0% APR for 12 months
Does it affect me if I hold a small balance on it but pay over the minimum required payment?

Example- I have a $6000 limit and I had a $2700 balance at statement end last month and I paid $1600 of it. I now have ~$1100 ish and my statement closes on the 20th of this month.

If I were to not finish paying that to 0 this month does it affect me? The 0% really helps sometimes in a month when I spend a bit too much once in a while


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Elliot Castro
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Postby Elliot Castro » Mon Mar 19, 2012 3:19 pm

As long as you pay the minimum EVERY month, your score will be ok. CC companies actually prefer these clients over those who pay off everything at once. The problem, is that you are paying far more than you need to this way.

jeffysdad
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Postby jeffysdad » Mon Mar 19, 2012 3:53 pm

Pay the card off every month. Don't pay interest. Your credit score will take care of itself.
American Express: Blue Cash Preferred (groceries, 6%; gas, department store, 3%); Gold Delta SkyMiles (Delta Air Lines, 2 miles/dollar, free checked bag).
US Bank: Cash+ (utilities, phone, internet, restaurant, 5%; drugstores, 2%).
FIA Card Services: Fidelity Amex (everything, 2%); Fidelity Visa (everything, 1.5%).
Chase: Freedom (rotating, 5%); Amazon (Amazon.com, 3%); PriorityClub (IHG hotels, 5 points/dollar); Sapphire (not in use).

*All cards are registered with PriorityClub IDine program for 8 points/dollar at participating restaurants.

invaliduser
 
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Postby invaliduser » Tue Mar 20, 2012 9:08 am

But my APR is still 0% to November so I'd like to take advantage of it til then. I pay off my other card in full since 28% or what not is shenanigans.

Thanks for clarifying that it's alright to have it. :)

JCarter
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Postby JCarter » Wed Mar 21, 2012 12:17 am

Your score will not take a ding as long as you are under 30% utilization. You should be fine, if you would prefer to carry a balance, if you remain under 30%.

Crashem
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Postby Crashem » Mon Mar 26, 2012 9:07 pm

Wow a lot of wrong info here. Utilization percentage (ie credit used/credit available) will affect you negatively at almost every level. Although for some reason, you do get a bump in your score if your utilization is between 0% and under 10%. You have to experiment a little to see what is ideal. There are certain levels of utilization where the ding you get is bigger such as 30% or 80%. So yes utilization does affect your credit score.

BUT remember credit should only be a tool to enhance your financial future. Since utilization is easily quickly fixed, dont worry about it. You should only worry about your credit score when you are planning to apply for more credit. And you should probably not apply for credit without planning for it (trust me, I have made that mistake. Save 10% at gap by getting their credit card and saving $10 but later getting auto loan and having to pay higher rate because that inquiry ding hurt em). So if you are getting 0% for a little bit, then take your time paying it off as long as you do pay it off before the interest kicks in. If you are planning on applying for credit soon, then pay it off and make sure it is reflected in your credit report before applying. If you want to maxmize your FICO score, then leave a really small balance for when you apply (think $120 on your 6k card).
Amex Centurion, Amex Platinum, Amex BCP 8k->24k (5/23/12), Amex TE 15k, Cap One 1.5% 15k->20k (8/7/13), CSP 25k, Chase Palladium 100k, Citibank AA 35k (AU), Firestone 1.8k->2.2k->2.4k (8/20/12), JFCU Jloc 30k, PenFed Plat Rewards 30k, SF Fire 30k, US Bank Cash+ 25k



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