#CreditCardBalance #Savings #CreditScore
Hey there! π So, I’ve been pondering this question lately and I’d love to hear your thoughts. Is there a benefit to keeping a balance on a credit card? Here’s my situation:
– I have over $15k in savings
– I have a $15k credit card with a $3k balance
– I’ve been keeping my balance below 30% utilization to be safe
– I’m considering paying off the balance with my savings to avoid interest charges
But here’s where I’m unsure: Will my credit score dip if I make a large payment, even if it’s towards my credit card?
What do you think? Would love to hear your advice or past experiences! π€ And if anyone has a possible solution or additional insights, please share! Let’s help each other out. π
Use your card, pay off the balance in full on the statement due date. Thatβs it. Donβt overthink it.
No. Why would you want to pay credit card interest rates ever, supposing you don’t absolutely need to?
Unless the interest rate on the card is zero and the money to pay it off is earning interest in savings, no. There’s no benefit to paying credit card interest, ever.
Even if you pay your bill in full, your balance from your last payment gets reported to the agencies. They can see you using your credit and paying it monthly. That’s good credit.
There is zero benefit to not paying in full, and if you don’t, you incur interest from the day you purchase, losing the 30 day grace.
For me, I can charge something on July 22 (first day of my cycle). The bill comes after August 22, and I have until September 18 to pay with no interest. Everything I buy has 1-2 month no interest. If there is one cent left on my balance after the 18th,. I lose that benefit.
Spend Credit like Debit is my motto. Around 770-800 score since I was 19. Not paid for interest on any balance I put on there.
Here’s a good way to think about debt. If you have cash available then you can do two things with it – invest it or pay off debt. If you have a place to invest it where the rate of return is greater than the interest on your debt, you should invest it because it’s a net gain. Otherwise you pay off the debt.
Credit cards typically have an interest rate of 20-30% so you probably should pay off the card.
Having said that, I have heard people say that it helps your credit score to pay off your debt over a period of time. I have no idea how true this is, but maybe you want look at that? I personally don’t worry about my credit score so I’ve never researched it.
Pay off the debt
Credit cards have a highest interest rate
None. ALWAYS pay off your cc balance every month and you should be good building up your credit history. Stay disciplined and live within your means.
In short: thereβs no benefit. Carrying a balance leaves you with more cash on hand at the expense of accruing interest and weighing on your credit rating.