Does maintaining a balance affect your credit score?

DGenerateKane · 01:58 PM

I applied for a new card last week and it (like most cards) has 0% apr for a certain amount of months. I was planning on just paying the minimum during those months so I can earn more interest on the money that would have normally been used to pay off the card. If it does affect my score than I won't do it.

Extreme z28 · 03:49 PM

It can. They take the total credit of your cards and then they take how much you owe on your cards. If your total debt is less than 15% of your total credit it won't affect your score but if it's more than 15% it will likely lower it and if it's over 30% it will almost definitely lower your score.

Mogul of Pineapples · 05:53 PM

Extreme is right. Be sure to keep your balance on that card below 30% of the credit limit and probably no more than 15% of all of your available credit available on your cards.

Making the minimum payment only for a while shouldn't be a problem as long as the debt isn't going up during that time. In other words, don't make any purchases on your balance transfer credit cards. That way every payment you makes decreases the balance and doesn't increase it. If you pay the minimum payment and your balance consistently increases then the creditor can view that as a negative.

DGenerateKane · 08:40 PM

Keeping it that low won't be a problem, and I've never had a balance before.

1bootcamp · 11:15 PM

Be careful. I did the same thing last year. I've invested for many years and I thought it was smart to do a 0% balance transfer even though I could pay it off. I thought with my money in the market appreciating I would be the smart one coming out ahead. I also thought I could pull that money out anytime and pay off the balance ten times over if I wanted.

Boy was I wrong. Over the course of a few days the market tanked and when you're on margin it's like doubling down. Your gains are doubled and your losses are doubled. Then take that two of the stocks went bankrupt in the same month, one of them being a multi-billion dollar company with a 50 year track record of strong profits.

If you're keeping your money in an FDIC insured savings account you are okay. If you plan on putting it anywhere else I wouldn't do it.

DGenerateKane · 01:41 PM

It's in a FDIC insured checking account, it has a 3% higher interst rate than my savings account.

Mogul of Pineapples · 09:29 PM

Quote:

Originally Posted by DGenerateKane

It's in a FDIC insured checking account, it has a 3% higher interst rate than my savings account.

Good rate! Who's offering that kind of interest rate on checking? An online bank? Maybe I need to switch.

DGenerateKane · 03:54 PM

Oregon Community Credit Union, I doubt they have any branches outside Oregon. :p

sputNick · 04:48 PM

Credit unions always have better interest rates. I use to be with Standard Federal which was a big bank around the Great Lakes but got sick of all the fees and switched to a CU. They are much better than any bank. They pay higher interest on savings and charge lower interest on loans.

01:58 PM	#1
DGenerateKane Platinum Member Join Date: Jan 2009 Location: Earth Posts: 50	Does maintaining a balance affect your credit score? I applied for a new card last week and it (like most cards) has 0% apr for a certain amount of months. I was planning on just paying the minimum during those months so I can earn more interest on the money that would have normally been used to pay off the card. If it does affect my score than I won't do it.

05:53 PM	#3
Mogul of Pineapples Centurion Member Join Date: Jun 2008 Location: Where the smog from the 101 freeway coats my home's windows... Posts: 634	Extreme is right. Be sure to keep your balance on that card below 30% of the credit limit and probably no more than 15% of all of your available credit available on your cards. Making the minimum payment only for a while shouldn't be a problem as long as the debt isn't going up during that time. In other words, don't make any purchases on your balance transfer credit cards. That way every payment you makes decreases the balance and doesn't increase it. If you pay the minimum payment and your balance consistently increases then the creditor can view that as a negative. __________________ “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you'll do things differently.” -Warren Buffett Current Cards: American Express: Blue Cash, Simply Cash Bank of America: Visa Financial Rewards Platinum Plus Chase: Rewards Visa, Amazon Visa Discover: More Current Everyday Card: American Express Blue Cash

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03:49 PM	#2
Extreme z28 Green Member Join Date: Jan 2009 Location: Los Angeles Posts: 17	It can. They take the total credit of your cards and then they take how much you owe on your cards. If your total debt is less than 15% of your total credit it won't affect your score but if it's more than 15% it will likely lower it and if it's over 30% it will almost definitely lower your score.

08:40 PM	#4
DGenerateKane Platinum Member Join Date: Jan 2009 Location: Earth Posts: 50	Keeping it that low won't be a problem, and I've never had a balance before.

11:15 PM	#5
1bootcamp Centurion Member Join Date: Apr 2008 Location: Big Island, Hawaii Posts: 110	Be careful. I did the same thing last year. I've invested for many years and I thought it was smart to do a 0% balance transfer even though I could pay it off. I thought with my money in the market appreciating I would be the smart one coming out ahead. I also thought I could pull that money out anytime and pay off the balance ten times over if I wanted. Boy was I wrong. Over the course of a few days the market tanked and when you're on margin it's like doubling down. Your gains are doubled and your losses are doubled. Then take that two of the stocks went bankrupt in the same month, one of them being a multi-billion dollar company with a 50 year track record of strong profits. If you're keeping your money in an FDIC insured savings account you are okay. If you plan on putting it anywhere else I wouldn't do it.

01:41 PM	#6
DGenerateKane Platinum Member Join Date: Jan 2009 Location: Earth Posts: 50	It's in a FDIC insured checking account, it has a 3% higher interst rate than my savings account.

03:54 PM	#8
DGenerateKane Platinum Member Join Date: Jan 2009 Location: Earth Posts: 50	Oregon Community Credit Union, I doubt they have any branches outside Oregon. :p

04:48 PM	#9
sputNick Gold Member Join Date: Oct 2008 Location: Midwest Posts: 41	Credit unions always have better interest rates. I use to be with Standard Federal which was a big bank around the Great Lakes but got sick of all the fees and switched to a CU. They are much better than any bank. They pay higher interest on savings and charge lower interest on loans.