I keep getting told to pay my credit card in full when I have 0% APR for 12 months. To me it defeats the purpose of the 12 month offer. I only have a $500 limit and so far my balance is 239. Will not paying my balane hurt my score? I keep hearing ppl say if i exceed 30% of my limit then my score is going to be ruined? Im confused. Im making a little over my minium and I havent used my card for anything in like a month. Is my credit not going to build this way even if im making payments?
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✅ Answers
As long as you make payments, your credit is being helped (just make sure you wait until the statement comes in and then pay the balance). Carrying a balance (especially one over 30%…which in your case is $150) drags down your credit score as one of the factors is how much of your total limit you are using – the more you are using, the more it affects your score negatively.
If you can continue to pay off the balance every month, ignore the fact that your have the 0% offer – those offers are really directed towards people who have balances on other cards (to get them to switch) or to people who are making large purchases (appliances, etc.) since the card issuer makes a nice chunk of change when you buy.
As long as you make at least the minimum payment, it will be reported as on time and build your credit history. The purpose of paying the balance in full every month is to avoid interest. If you have a special 0% interest rate, carrying balances won’t cost interest. Just make sure you pay off the balance at least one month before that special rate ends.
Yes, carrying a balance of more than 30% of your limit hurts your score. However, your score isn’t ruined. Pay off the balance and your score rebounds. Scores are not permanently recorded. They are based on your current credit report and change as the report changes.
Now once that special interest rate expires, you should get in the habit of paying the balance in full every month. You will avoid interest and stay out of debt.
Source(s): BD
By carrying a balance of almost half your credit limit, you ARE affecting your credit score in a negative way.
When you have heard the 30% rule they are talking about not carrying a balance of more than 30% of your credit limit. In your case, you should not carry over more than $150.
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Yes, that will build your credit.
Keep paying in full. You never know when you might lose your job.