What does carrying a balance exactly mean?

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What does carrying a balance exactly mean?

Postby simplee » Sat Feb 02, 2013 9:06 pm

I've held a credit card for about two years now, but I always wondered how exactly everything worked. I obviously know that carrying a certain amount month to month is "carrying a balance" but does having a number greater than zero on a statement count as carrying a balance as well?

i.e. May 2012 - statement that says $100, $20 min due June 2012. If I pay this in full June 2012 but spend between the payment due date and the statement date so that the new statement balance is not zero, is that "carrying a balance"?

And is that necessarily better for my credit score than paying everything off every month like a charge card?

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Postby Robrus1 » Sun Feb 03, 2013 7:31 am

Carrying a balance means paying less than the full amount owed to the card issuer on a statement. If your balance says $100, $20 min due, if you pay $100 that's paying in full, and anything less is carrying the remainder as a balance which will be subject to interest. Spending between the payment due date and the statement date is simply spending on the next billing cycle. It's not necessarily better for your credit, but if you get in the habit of paying in full every month, you'll avoid paying interest, which should always be a priority.
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Postby MemberSince99 » Mon Feb 04, 2013 12:23 pm

In terms of score, all that matters is the balance that reports to the credit bureaus, not whether you actually CARRY that balance. So say you let 100 dollars hit, then pay in full, that makes no difference vs paying partial for that month, in terms of your score.

So if you are considering carrying a balance to help your score, that won't do it, just let a small balance hit then pay it off and you get the best of everything.

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