Paying credit card off completely

[agent]

Pay it off, but leave it open

This. Your credit score improves based on a number of things, including your debt to income ratio and your available credit line(s). If you close the account, that available credit is no longer a factor in your score, so it ends up working against you.

[evandael]

i'm echoing previous statements; pay it off, but don't close the account.

[89AlpineM3]

My wife and I also use our cc for everything and pay off the balences every month
As stated above just use it were you would use a debt card, your credit score will up just from doing that.

[Raxe]

The key is to not buy what you don't already have the money for. If you can't afford it, don't buy it!

Exactly! Having a credit card is almost essential if you're going to be doing any online shopping, just have some self control and don't buy what you can't afford.

[Kevinl]

Do it I have not had a credit card for 3 years

Also make sure it doesn't have compounded interest although that's usually the store cards

[mrsleeve]

Ditch it and get a rewards card.

Then charge your normal expenses to said rewards card. Pay rewards card off every month.

Enjoy rewards and increasing credit scores and credit availability. Credit is a great thing if you use it responsibly.

took the very words from my mouth

[noE30]

who's got the best rewards card? I use my credit card for basically everything, 100% paid off each month, I feel like I should earn some rewards while doing so.
Recommend me the best one!!

[z31maniac]

who's got the best rewards card? I use my credit card for basically everything, 100% paid off each month, I feel like I should earn some rewards while doing so.
Recommend me the best one!!

Good place to start:

http://www.nerdwallet.com/the-best-credit-cards

[spike68]

Pay the whole thing off. I just paid mine off. Its had a balance since last august when I had to buy emergency school stuff. Ive just been making the minimum payments since then. It feels good not having to worry about it anymore.

[rwh11385]

I've got about $650 left to pay on it, should I just pay it off completely? Or is it better for my credit to just keep doing the monthly payments?

Yes. You should pay it off before you have to make any interest payments. Paying interest does not make your credit better. You can charge and pay that amount off each month and your credit score improves by having one more on-time payment on your account. Paying it off entirely is a "check the box" just like only paying the minimum, only you don't have to pay interest.

Pay it off, avoid paying those SOB's interest.

I haven't paid interest on my CC in years and use it daily. You can still build up credit very well and not pay the CC company interest, Just pay it off every month. I actually get about $1000-1500 cash back from them a year in addition to not paying them interest. You still get the protection of a credit card that you don't get with a debit card and can utilize cash flow more efficiently.

This.

Use it for everyday purchases. Or just keep a Netflix or some recurring expense on it and pay that off in full each month. Get a rewards CC like Z31 said - NerdWallet is clutch. [I like Chase Freedom, AMEX Blue Cash Everyday, Chase Amazon, but if you belong to CostCo the AMEX True Earnings is awesome] Just don't close your current card because the longer the account is open the better. If you used anywhere close to the credit limit you should slowly bump your credit limit until your maximum level is 20% of the limit (called utilization). Even if you switch most of your use to a rewards CC, leave something small on your current with automatic payment in full set to improve your credit history.

Like Jorgen, I've gotten several thousands of dollars back in rewards over the years and can't remember ever paying interest on a revolving account.

To maximize rewards, I split purchases between cards based on their rewards %: Gas and restaurants 2% back on Amazon's card (plus 3% back at Amazon), groceries 3% back on AMEX Blue Everyday and 1.1% back on everything else with Freedom.

Having a track record of responsible use of a CC will enhance your credit score....and that will be very helpful when you're considering financing a car or a house someday.

This.

[Holland]

From my understanding the amount of balance doesn't matter as much as having a balance. I'm late it the building credit game, so a high interest card with small purchases is where I'm at right now. Pay it off every month.

[mrsleeve]

^

Utilization is as important as just having a balance. Ideally you should have no more than a 30% utilization rate. Even if you pay your card off every month, it still shows thought the reporting agencies like you have a balance if you continue to use it every month. For keeping the best score you should try and keep this ratio at 30% of available credit

[DIIRTY-30]

I've had a credit card since I began working when I was 17, I used to pay the balance off religiously, I leave a balance less than half of what my limit was. 6 Years later, I have a 780+ credit score, 2 cars, and a much much higher limit that never goes above 1/4. Its a game, it all depends on the interest %. Never miss your payments and your gold. I'll pick using cash any day, but I have a car part addiction and that requires the interwebs too much sometimes.

[markseven]

Ditch it and get a rewards card.

Then charge your normal expenses to said rewards card. Pay rewards card off every month.

This requires much discipline. Which it sounds like the OP has.

[rwh11385]

From my understanding the amount of balance doesn't matter as much as having a balance.

That would be incorrect. Not only does your highest recorded balance matter, it vs your card limit is a contributor to the determination of your credit score:


You'd be much better off if you consistently had a balance of $1000 that you paid off each month than having a $10,000 balance just for one day. Managing your balance amount is important.

^

Utilization is as important as just having a balance. Ideally you should have no more than a 30% utilization rate. Even if you pay your card off every month, it still shows thought the reporting agencies like you have a balance if you continue to use it every month. For keeping the best score you should try and keep this ratio at 30% of available credit

+1

http://www.quizzle.com/blog/2013/04/top-10-credit-score-facts-fictions/

When you close a credit card account it may affect your “credit utilization”. Credit utilization is how much credit you have (or the limits on your cards) compared to the amount of credit used (your balances). Closing one of your cards lowers the amount of available credit and if you carry balances on other cards it will then hurt your utilization percentage, thus lowering your credit score. At Quizzle, we recommend keeping your utilization around 30 percent.

To go along with what sleeve said, I target 20% (never racking up more than $1000 on a $5000 limit) just in case I forget to "make room" on the card. You can benefit from tripling your credit limit as possible. Or, paying it off multiple times a month.


Going to Quizzle (by the makers of TurboTax, Quicken... and more importantly, Quicken Loans) can get you a free credit score check every 6 months. It's mostly a way that they can offer you a refinance through Quicken Loans (which has pretty crappy rates and high fees compared to a credit union...) but pretty great as far as explaining how credit scores work and how you can improve yours.

http://lifehacker.com/5815215/quizzle-gives-you-a-free-credit-score-and-credit-report

http://creditcardforum.com/blog/quizzle-review-credit-score-report/