People need to realize balances matter even if you pay them in full every month.

**Mogul of Pineapples** · Jun 17, 08, 1:53 pm

It's crazy how many of my friends think that just because they pay their credit card balances off in full every month, that it doesn't matter what their balances are. The amounts reported to the credit bureau are the amount listed when each statement closes. If you have a card with a 5k limit and you put 4k on it every month, but pay it in full when the bill comes, doesn't matter because what's getting reported is that you're using 80% of your credit limit. They don't know whether you're paying it off or not because that's not what's reported.

The only way to prevent this would be get a higher credit limit so when it's reported it shows 25% or so of your limit being used only. Or the other option is to pay your balances off before the statement closes. That way when the bill is issued it doesn't have a balance.

**bikermike** · Jun 18, 08, 2:49 pm

You know I didn't know that until just a few years ago and I had no idea. I figured as long as you keep your balance below your credit limit you're fine boy was I wrong. That was about 4 or 5 years ago I did it that way. Always paid the balances off but just never thought it made a difference if I used most my credit limit.

**fffresh** · Jul 29, 08, 8:21 am

Someone was telling me last week they maxed out their credit cards for 0% balance transfers and put the money in the bank. They thought they were so smart.... wouldn't call smashing your credit score smart.

**totally obsessed** · Jan 21, 11, 1:23 pm

I need help! I have been watching my score and I don't understand it at all. Let's just say my score was 780. I made a purchase for 1025 on Saks fifth avenue/mastercard and another purchase for $25 on a chase visa card - my score increased 5 points. I have amex as well, but that is always paid in full. I also have a few other cards, but no other balances. First, I pay the $25 and my score goes down 3 points - alert says the only thing that changed the score was change on my report and the only change on the report was the $25 payment. I then pay the $1025 - and guess what happens? the score goes down another 3 points - and again the alert says the score went down because of a change in credit report - and the only change was the $1013 payment. So, I get 5 points for charging $1050 and i lose 6 points for paying them - before the bill closed, btw. I am so upset. I probably shouldn't watch this closely, but I am going to be buying a new house, so it matters. And the same thing has happened before. Do I actually have to keep a balance have the score increase again? if you need this, I also have a leased car and a mortgage - all neurotically paid on auto pay, so they are always on time.

I appreciate the help! (especially as I try to get to and stay above 800)

**jeffysdad** · Jan 21, 11, 4:53 pm

Yes, but if you are charging a few thousand every month and paying it off every month, it won't be long before your credit limit is raised. If you have a solid credit history it's very easy to get limits of 10, 20, 30 thousand or more, even with a relatively modest income.

I ran a card with a limit of 55k up to within $500 of that for a 0% balance transfer several years ago so I could bank the money and draw interest, and it didn't hurt my credit score a bit, from what I can tell. I don't think it's ever been below 770 and has been as high as 800 or so over the last several years.

Yes, the credit score is important if you are taking out a mortgage, but if you've been responsible, the score should take care of itself for the most part.

The credit bureaus want people to obsess about their scores so they'll keep paying money to see them. It's a scam.

**96mustang5_0** · Jan 21, 11, 6:07 pm

Man all I want is a limit of like 4 or 5. What type of spending were you doing to get a 55 credit limit and what would a 21 year old guy like me with limited credit need to spend to get bumped up to at least 4? My limit is 700 and I had asked before to get it raised and was told no. There are no late payments made ever either.

**jeffysdad** · Jan 22, 11, 3:49 am

Charge, pay off, repeat. Keep doing that. You might look for bills you can pay with credit (without a surcharge) such as insurance, electric, etc. Spending adds up. The important thing is to pay it off every month. My spending ranges from about 1,500 to 3,500 a month.

I'm more than 20 years older than you and obviously have been doing this longer. You need to be patient.

This wasn't a factor for my credit line but might make a difference: Most (all?) cards offer a facility for you to have your minimum payment/full balance debited from your checking account by them automatically on the due date. I have all my cards paid in full automatically for the convenience of it; it's great. Authorizing the bank to do this might demonstrate to them that you intend to be responsible with your debt and nudge them toward granting a higher credit limit.

Also, I should have noted that the high limits I described above were pre-crash. That $55k limit was with B of A and was later cut. I currently have about $25k available with B of A, about $26k with Amex and Chase each, still far more than I need, but it's nice to know it's there and not have to think about it when I use my card.

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People need to realize balances matter even if you pay them in full every month.