Contour Enthusiasts Group Archives Forums General Common Interests Does it make a difference on credit?

I'm 18 and I just got 2 credit cards. I think I'm a pretty responsible kid but I was just wondering if it actually give you any better credit if you pay your credit card bill in full each time or just a part of it? The biggest factor is if you pay on time or not isn't it?

They are more likely to increase your limit if you keep a balance.
Keep paying your bills on time, that is what counts on your credit report.

Also, on your credit report it will list your average monthly balance as reported to the credit bureau. This could prevent others from lending to you if your balances are too high.

There is a small catch-22. Some credit card companies do not want customers who pay every month, it is not as profitable and they will deny you. But it is better to pay it off, you will be a MUCH better credit risk for big purchases, i.e. houses and cars.

FWIW,

Future creditors don't consider your present balance as such, they look at the credit limits of each card and add it together to figure out your total potential liability. So if each card has a $2000 limit, even if your balance was $300 they would consider your debt to be $2000. this is because you can run the card up anytime. Before I bought my house, I cancelled a few cards because the aggregate limit would be high (Though I had nearly a zero balance).

But regular payments and a small balance go a long way to establishing a good credit rating.

I know that if you pay your credit card off in full at the end of each month is builds no credit. I've kept a balance (relatively small) on my credit card over the past few years and I pay $40 - $60 per month on it just to make them happy.

There was actually an article in Reader's Digest about this and they said that keeping a balance on your credit card was beneficial, as long as you pay on it each month.

Just make sure you pay it on time. This shows that you are responsible in making payments and responsible with the credit given you...

I would also add that the length of time you keep a credit card plays a role as well. IOW keep the card longer and it will look better on credit reports.

In the approx. 10 years I have owned credit cards, I have NEVER carried a balance. IMHO, I have never suffered from this strategy. I have never been denied credit for anything, and I've gotten 2 cars and a house. Plus, I have the satisfaction that I have never given those vampires a cent in interest.

thats awesome!

I worked for a credit card company a while ago. I would recommend paying off your cards as often as you can. If you want to keep a balance keep a low one & do not max out your cards and only pay the minimum. That's how people get in debt & can not get out of it. Be smart and NEVER charge anything on your card unless you have the cash to pay for it.

I just went through all of this with buying a house. I canceled and paid off all but one, that has no balance now and stays at the house so it is only for emergencies or reserving hotels and etc. My bank said that you just need a debit\check card now days (which is through visa, mc or something and that is it)