No, Carrying a Credit Card Balance Does Not Help Your Credit Score

Your credit score is one of the most important financial factors. It is even more important if you’re into credit card churning. You need a good score for credit card companies to approve you for new credit cards. You can find out more here about credit scores, and what to do to improve yours or how to start from scratch. But many people do not check their scores, or follow bad advice or myths that is actually hurting them.

Carrying a Credit Card Balance

One of those myths is that if you carry a balance on your credit card is a good thing. Many consumers don’t pay their entire credit card bill each month because they think carrying a balance will help their credit score. Based on a creditcard.com survey, 22 percent fell prey to a persistent misconception that carrying a balance helps your credit score.

You should always pay your bill in full. The ratio of the amounts you owe to your overall available credit limit is an important factor. It accounts for 30 percent of your credit score.

Not paying your cards in full doesn’t just hurt your credit score and your ability to borrow, but it also costs you money each month. Credit card debt is a very high interest loan, so it should be the first to pay back.

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One thought on “No, Carrying a Credit Card Balance Does Not Help Your Credit Score

  1. Two things come to mind as I read this, though your point about consumers being confused is correct. I’m not sure banks are given enough data points to know for sure a balance is being carried.
    Carrying a balance that is a low percentage of available credit across your cards likely has no affect on score. The churning community has a higher average number of cards than the general public and a correspondingly higher total available credit. Cycling the CL is a red flag with banks these days and different statement dates make it a challenge to keep that bonus spending under 9% usage some months.
    Lots of new card offers include a 0% interest period. There is nowhere a sole prop can get money that cheap, nor is that a common personal loan offer. Consumer finance sometimes presents zero rates but the cost is built into the purchase price. If one can park money in a high interest account or grab a bank bonus while carrying a 0% balance on a new card, why not?
    It is not prudent to carry a balance you can’t pay right off, but this game we play has lots of maximization strategies.So your score sometimes drops from 815 to 785, hardly causes a bank to deny a card. If you are staring from a lower score, you have other things to work on, don’t you?

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