Current Events > Are there benefits to carrying a small balance on your credit cards?

(+) Yeah! (+)

I've always payed them off in full. Which has been good for my credit, but are there drawbacks?

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No, I'd never carry a balance as some cards have pretty ridiculous interest

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no, carried balance for credit history purposes does not update at the same time as card carriers check to see if you owe interest

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Lol no

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always pay your statement balance in full, no carryover

There's a benefit for the CC company, if that's what you're asking.

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It would help you credit limit go up or anything?

And I've heard that cancelling a credit card you pay off regularly will hurt your credit, but cancelling a credit card you carry balances on won't.

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DarkChozoGhost posted...

It would help you credit limit go up or anything?

no

see post#3 for details

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What do you guys think of Discover? I knew that they're the common "starter" credit card and make offers to everyone, so I kind dismissed them. But the other day I looked at a pre approved offer they sent me in the mail and it was on par with my other cards, even had a couple advantages. Are they worth getting?

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@DarkChozoGhost posted...

It would help you credit limit go up or anything?

And I've heard that cancelling a credit card you pay off regularly will hurt your credit, but cancelling a credit card you carry balances on won't.

Canceling your cards hurts your credit if you have good credit.

Carrying over a balance does not help credit rating, the using of the cards does.

I have a 810ish rating (it goes up and down from 808-812).

I literally pay my credit cards the DAY the balance post.

The trick to great credit.

1. Apply for and get as many free no yearly fee cards as humanly possible. Then use them for 6 months to raise their limit. Then just feeze the cards and never use them again. But do not cancel them. Keeping a steady supply of constant new cards. Do not worry about new account openings effecting score negatively, it barely effects it once you have insane amounts of credit.

2. Pay everything off immediately, never wait. There is no point unless you like wasting money.

3. PAY everything in credit! Everything you possibly humanly can pay in credit somehow. Pay in credit, especially all of your bills. IF you rent teach your landlord how to do paypal and pay credit via paypal.

4. They like to see you have a history of loans paid off. So do loans that are extremely short term, and pay off entire thing before one drop of interest is due.

5. Feel free to post a higher income to credit cards if your job pays more on average than what your make. Will help get you more credit increase, just do not post more than average pay for it less you can prove it.

I've been doing it mostly right then. I try no to go overboard with getting new cards though, I only want one or two more. And when I get my W2s you bet your ass I'm telling my credit card companies and getting my limits raised.

When you "retire your cards," do you just outright stop using them? Can you get another card from the same company, and safely cancel the old one?

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@DarkChozoGhost posted...

I've been doing it mostly right then. I try no to go overboard with getting new cards though, I only want one or two more. And when I get my W2s you bet your ass I'm telling my credit card companies and getting my limits raised.

When you "retire your cards," do you just outright stop using them? Can you get another card from the same company, and safely cancel the old one?

If you want a high credit rating STOP canceling your cards.

The more credit you have and the older your credit is, the more they give you.

If you cancel a extra old card you could see your rating plummet.

Just get rid of cards with yearly fees and then collect 20+ without.

Otherwise you are never hitting 800.

Edit: Retiring your card is just going into settings online and disabling it from being used.

That way it is useable credit in your name, but no hacker or identity thief fucks you over.

I don't cancel my cards. I'm talking about replacing an existing AMEX with a new one that better suits your finacial needs.

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DarkChozoGhost posted...

I don't cancel my cards. I'm talking about replacing an existing AMEX with a new one that better suits your finacial needs.

Then make sure to just freeze/disable the existing AMEX, not cancel.

SkyShow knows what he's talking about. No annual fees, never carry a balance, pay for everything you ever need to buy with a credit card (barring unique circumstances like my apartment's rent portal which charges a 3% transaction fee for credit cards, so obviously paying for that with my 1.5% reward does not make sense) - basically anything without a transaction fee that exceeds the rewards you'd be getting from said purchase.

Don't change your spending habits or get a card that will have you changing your habits, or you'll end up spending more than you're getting in rewards. For example, Chase Freedom has rotating 5% quarterly categories. I wouldn't like that because, say in January one of the categories is movie theaters - well, now I am going to feel compelled to go see a movie that I might not have seen to begin with. So, yes, I get 5% back on my $10 ticket, but if the category wasn't movie theaters, I probably wouldn't have gone to see that movie anyways, thus saving me $9.50.
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The best way to avoid large amounts of credit card debt is to have no more than 2 credit cards, if you aren't an international traveler or deal in international commerce you should only have one, period.
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Hop103 posted...

The best way to avoid large amounts of credit card debt is to have no more than 2 credit cards, if you aren't an international traveler or deal in international commerce you should only have one, period.

No the best way to avoid large amounts of credit debt is to immediately pay any balance you have off, and not actually use credit for credit.

The higher your credit rating goes the more amazing your perks and ability to get things cheap becomes.

Having 1-2 cards is how you stay at the <740 range for life.

I have had 2 cards and am at like 795 credit score lol

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SK8T3R215 posted...

I have had 2 cards and am at like 795 credit score lol

I am calling bull unless you are rich as fuck and have some type of black card with 200,000+ on it.

I did not even pass the 780 range until I had over $100,000 of credit.

(And everything over 760 is a trickle and takes for ever to go up)

Call whatever you want I've had 2 credit cards for a while now and my score is moving from like 770 up for like 2 years or so.

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The point of the cards is to raise your total amount of avaible credit, if if you have a income high enough that they will give you a extraordinary amount without needing more cards. Then yes you could get a higher rating with a small number of cards.

But for the majority of us who are not going to be millionaires. Getting super high credit requires lots of cards.

I'm not a millionaire though I think your argument is just flawed telling people to open as many cards as possible as the only way to increase your score.

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SK8T3R215 posted...

I'm not a millionaire though I think your argument is just flawed telling people to open as many cards as possible as the only way to increase your score.

Out of all my friends even those who make way more than me, I'm only one with a 800+ score.

Only other person I know with a score as high as me is my grandfather but he is legit a millionaire (he was a eye doctor that bought endless real estate his entire life).

You get free perks when your credit score is super high. Other day I bought a used Audi convertible and solely because my credit was so high they threw in a 3 year Engine warranty and dropped just about every fee.

(though I paid a mechanic $1,200 to check engine over for any problems and they ended up having to pay $18,000 to give and install me a new engine xD) WHich was particularly funny as I bought car for only $10,000

Edit: I had bought car knowing engine clearly had a problem and is why I talked them into engine warranty

So your advice is based mainly on anecdotal evidence?

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SK8T3R215 posted...

So your advice is based mainly on anecdotal evidence?

I was also a assistant CPA for many years, and turned my mother in laws credit around too amazing.

But it's hard to deny when it's clear something works and you see the numbers going up, when they did nothing before.

Unless you're in an introductory 0% interest period, no.

I regularly open new 0% cards to finance shit and carry a balance for several months but get it paid off before the 0% expires.

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An assistant CPA? That isn't a thing you're either a CPA or you're not.

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ITT people bragging about credit ratings.

You you need only 1 really but a 2nd is fine. The drawback to keeping a balance is INTEREST

SkyShow posted...

Then use them for 6 months to raise their limit. Then just feeze the cards and never use them again. But do not cancel them.

last I knew if you kept a zero balance card and left it alone it would auto close from no activity is this not the case anymore?

what I've always done is still a recurring charge on each card (like a fixed bill or a streaming sub) and set it to autopay to keep the card active and the payment history perpetually perfect