I've heard from people before that if you pay your balance in full as soon as possible your credit history will suffer for it. Apparently credit card companies do not like lending to people who deprive them of funding, but do not make a profit for them. I'd considered getting a credit card and paying off balances in full, just to build up history, but I'm not sure if I'll be doing more damage than good.
I'm not sure i had one credit card that went a little over and got late charges it was only about 200 over the credit limit they gave me and i paid it off in full i thought it'd help but i don't think it did much.
You do need to have several months of good payment history on the account. Wait until the 25th day of the account and pay the balance in full for a few months. That will show that you had the credit purchased and paid more than once.
It would be a major surprise to me if your credit rating was negatively impacted by paying off a card balance early. The companies want to make money but that does not make you a bad risk. As long as you clear it off, don't default and don't bury yourself, don't bounce cheques and all those sorts of things, have a home address, etc. you are a low risk card holder. I am not saying I know the formula but that seems to me to be logic. Ryder13
You're right that companies *do* want you to carry a balance. If you've been regularly paying off your balance already, though, then it's not going to hurt you any. I could see it potentially hurting you if you have always carried mediocre balances and suddenly paid everything off....and then wanted to take out a large loan. It might look suspicious.
It never hurt my rating to pay off stuff immediately. But I also have some things that I have a balance on so I guess I can't say for sure. Personally, if that's true though, it's pretty stupid. Because that would be them basically saying "we want you in debt to us" rather than you being prompt on your payments.
The thing is though that they do want you in debt. Ideally for them you would be paying back the minimum each month, and never defaulting, thus generating them the most profit. If everyone always payed off their balance immediately then the companies would soon go bankrupt, as they would be collecting no interest.
It will hurt you more to carry a balance, because then your debt to available credit ratio is worse, and that is one of the primary things that they look at in evaluating you.
I heard the opposite; that it was good to max out the credit card and then pay it off in full immediately to improve your credit rating fast. I could be wrong because this was just a comment from a friend who isn't an expert. I do know that paying just the minimum isn't doing yourself any favors because you end up paying a lot of interest, and it can take years to catch up that way. I pay half of what I owe, use it up and pay half again, so I always owe something. I'm horrible with that type of thing, but I do know that my credit rating has gone up considerably by using and paying my card frequently.
I heard the opposite as well. People say if you turn in or pay off all your oweings, then you're clear and your credit score will go up. Now that's what I heard so don't trust me on all of this. Also, I don't think it will go down because it's a good thing!
I pay off the full balance of my credit card each month, and a few months ago I had my credit checked at a bank, and the financial advisor said she'd never seen a credit score so good, so no, it doesn't hurt at all if you pay off your card each month. However, if you have a HUGE credit limit, and you're looking for a loan or a mortgage, you should ask the credit card issuer to reduce your card limit because some institutions, when lending, consider your total debt to be whatever your credit limit is, whether or not you've ever actually owed that much.
I don't think so. I don't think I have ever really paid interest on a credit card before and I have a very high score. I only paid interest on student loans and my car. They are currently paid off and my credit rating is still pretty high. Keep in mind that there are lots and lots of people out there who still pay interest and late fees and such. I know that we all wonder how banks make a profit and maybe some secrets they are not telling us, but for them to ding us for paying off a debt that we agreed to pay just doesn't make any sense. They should be happy that we are sending money. I figure that just as long as money is coming in, they are glad they get that much. I think banks need the money now.
I actually think it's better to pay off the whole amount by due date. It will even help you get a higher credit limit.
