Paying a card in full, or keeping a balance?

I personally think that keeping a small balance on the card and paying on it each month would help. I wouldn't have more than say a $100.00 balance on it and pay it early every month.

Why is keeping a small balance better than paying it in full?

I honestly don't know the logistics of hiking a credit score, but I would think that paying it off monthly would have a bigger advantage, I'm honestly not sure about that, though. Hopefully someone else will be around to share some insight. :)

Keeping utilization low shows you are using your credit & paying on time.Don't keep a balance on a credit card just for score purposes though.See how much the balance cost you per interest rate.

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Yes it would depending on how statement date relates to date credit bureaus are updated. After using your accounts in relation with a credit monitoring service,you can estimate these dates.

The largest portion of your credit score calculation is payment history. If you have no payment history (because you are not using your card), then it is more difficult to reflect positive, on-time repayment as part of your score. Most credit experts suggest that consumers use their cards for necessary purchases (like groceries, but only purchasing what you can pay for from your bank account) and then pay off that balance at the end of the month. This way, you should avoid or minimize interest fees while at the same time demonstrate that you can pay your bills on time (payment history).

Another factor of your credit score is balance-to-limit ratio. This is a ratio comparing your credit limit to your balance on your card(s). So, if you keep your balances to $0 (or very low), you will have a much better ratio (which reflects better on your score). I don't believe there is a need to carry a balance and doing so will only cost you unecessary interest fees (what a waste of money). However, using your cards and paying them off will demonstrate a positive track record of payments (payment history), and that should help to rebuild your credit (over time... it's not overnight).

when you are paying down several debts, is it better to pay one down/off at a time, or to spread it out over the cards?

Like say I have an extra $200 to pay towards 3 cards, 1 card had $7500 balance, 1 card had $1,000 balance, 1 card had $500 balance. What would help my credit score more?

Thank you!

I would pay the mins on the two higher balances, and knock out that small balance in the course of 2-3 months. Then take that $200 + whatever you'd been paying on the $500 balance, and kill off the $1,000 balance. Continue as needed, from smallest to largest.

If this sounds suspiciously like Dave Ramsey's 'debt snowball', it's because it is. Regardless of where you hear about it, the technique works.

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even if the higher balance/limit card has a much larger interest charge than the 2 smaller balance/limit cards? 30% versus 17%?

If you are paying 30% interest,I would darn sure be looking for a way to either pay it in full,transfer it somewhere,or borrowing money to pay it.

that's the card that I paid in full after I had run it up to the max (I was stupid and didn't THINK about what I was spending). I took out a cash-out loan on my property, and as soon as I paid the card off they reduced it from $30k down to 3k, I had to beg and plead for them to raise it to $7,500. And then they turned around and raised the interest from 11% to 30%. I have sure been shocked into reality over that whole thing!

There is a lot of debate about whether people should pay off the largest or smallest balance first or the one with the highest apr first. Perhaps it should be restated as pay off the one with the largest finance charges first. So, if a larger-balance account has a low APR, but a smaller-balance account has a ultra-high APR, the lower-balance account may actually be costing you more. The sooner you can pay this one off, the sooner you will have more money to pay towards the other accounts (and the more money you will save because you knocked out the highest-cost account first).

There hasnt been a mention of negotiating lower interest rates with any of the credit card companies in this thread. Starting with the highest interest card try to lower the rate. Do the same with any sort of monthly or annual fees... try to get them waived. Also ask about other "products" that might be available that will save you money - meaning a different credit card that might give you fewer frequent flier miles to redeem etc.

Best of luck.

I have asked my credit card company on my large interest card (30%) and they said flatly NO. I have a 7,500 limit and just about that at the balance, but I have never been late paying it (at least in the past 2 years) ... is there anything I can say to persuede them to lower it? I can't get any credit anywhere so I can't pay it down, so I hate to threaten to take my business elsewhere since I know I can't (and presumably they know as well!) Any advice?

You will not get any breaks while you account is at 100% utilization.They will take your money as long as they can and your credit report will suffer for the debt also. The only way I know of to help is getting another card to balance transfer to or getting the credit card companies corporate headquarters address to send a letter to the head boss.

That is a great idea ... I do wonder if anyone has ever gotten a reaction (and more importantly a reduced interest rate) by writing to the "head" of a credit card company?

i only have one credit card should i get another one or just kee[ the one that i already have?

i only have one credit card and i want another one but i do not want it to hurt my credit rating. would that hurt my credit rating or improve it? i was young and dumb and messed up my credit and now suffering from the consequences from that. does negative marks actually roll off your credit every years from the date that it was added? please reply and let me know. thank you.

Donald bad marks on credit reports are removed seven years + 180 days from date of first major delinquency. Let me know what your current Ficos are & I may be able to point you to another card.

The information that I most recently found was that it is best to keep a 10-30% debt to credit ratio on your cards. That means if you have $1000 credit line keep about 1-3 hundred on them. Make payments on them every month as usual but never pay them off completely. It makes sense to me, the banks make money on you from the interest that you pay. If you have a $0 balance, they don't make money. The information that I read went on to say that if you are diligent about making payments and carry this 10-30% debt to credit ratio you will raise your credit score quicker, as well as have a better chance of receiving more and better credit card offers as well as credit line increases which it says will also build your credit score

Here are some steps to get credit card debt in order for credit repair that I've found work:

Credit Card Repayment Plan
1. Take all of your cards and order them from highest interest rate to lowest.
2. Allocate enough money to pay the minimum payments on all cards.
3. Any leftover funds you can allocate should be placed solely on the highest rate card to pay it off fast. Once it's paid off, move all of those leftover funds to pay off the next highest, etc.

Follow this plan and you will get the highest interest rate cards paid off in the fastest time, and maintain the others in the process so you do not have any negative credit reporting issues or delinquencies!


Tradeline Utilization

Not sure if this helps, but this is what I did on increasing tradelines. As I was paying off about 10k in credit card debt from the past, the only other card I had that I could use was a BOA $500 unsecured card, which gave me no help at all. So, I told BOA to go to hell with their tiny unsecured card and I went to a local credit union and, because they're more flexible, got a $3500 card (I think they don't look beyond four years so that helped me out as some of my bad stuff was older). I try not to carry any more than $350-5000 on that max but usually don't even carry that much. To increase my utilization and offset my credit debt, I looked for other tradelines online. Got $5k from a clothing store online called enchanted attire. I also hear there's some other places for jewelry, etc. but have not looked at those yet. Bottom line, no matter where you get your tradelines from, make sure you stay under 20% utilization. As you pay down any other cards at the same time, everything gets much better! Good luck!

I tried the quick reply and didn't think it went through, so here goes again:

Ways to get your cards organized and a payment plan structured.
1. Take all of your cards and order them from highest interest rate to lowest.
2. Allocate enough money to pay the minimum payments on all cards.
3. Any leftover funds you can allocate should be placed solely on the highest rate card to overpay it and pay it off fast. Once it's paid off, move all of those leftover funds to the next highest, then the next, etc. Follow this plan and you will get the highest interest rate cards paid off in the fastest time, and maintain the others in the process so you do not have any negative credit reporting issues or delinquencies!

I also spoke about tradelines but I'm going to stop here and see if that reply goes up with all that in it before I try to retype everything lol!

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That IS good advice. I have only one CC. My 'credit limit' is $300.00 on it. ..and that's all I want!! SOOO many people are paying off the 'interest' on their CC's, and not the actually principle!! I really like the advice (above). A friend of mine did that (paid off the highest % CC's) and, slowly but surely, paid all of them off. It did take some time,...but..repairing your credit does take time.