murzun
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Your credit history buids up over time, time you spend making payments on your cards and other outsdanding lines of credit. In this way, if you pay off your card in full and then don't use it anymore, you won't really have any credit building up beyond the month you paid if off in.
However, if you keep using it but pay it off in full at the end of each billing cycle, yes, not only will your credit history keep increasing but you'll also be paying next to nothing in interest. Credit cards only get you when you carry a balance.
There is a benefit to carrying zero balance though: it increases your credit score, which is not the same as credit history. This score is more reflective of your current situation, and will be one of the things creditors look at before issuing you credit. So if you're about to apply for anything, paying off your credit card a week before that or so is a good idea.
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Scott c
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It is a trap either way . I do not buy anything I do not have the cash for . if you build up all this credit , and someone steals your identity it will all be for nothing .
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chica_zarca
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No, it's better. The more you pay off your bill in full, the more positive credit you build. Paying the minimum will give you positive credit (because it's better than not paying the bill at all), but not as much as if you paid it in full. And even if you can't afford to pay it in full, pay off as much as you can. You can pay more than the minimum if you can afford to. That also looks better than paying the minimum. Good luck!
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tonevault
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Yes, they will see that you are responsible....even if they don't make as much profit.
You might want to pay off ALMOST all, so there's a little balance.....Just don't EVER get a "late payment" or you're screwed.
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wyldflwr34
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Not exactly,...but in a way. It will show up on your credit report in exactly the same words and have exactly the same code. It will say - "paid as agreed" or something to that nature.
But,...when people are looking at your credit report, they will see your high balance every month, and if you are maxed out or if you paid it in full. Future creditors love to see you paid it in full. That means you are a good credit risk.
But also, the credit "score" will be higher because their will be a lower "debt to income" ratio. The higher the score the better!!!!
You would be just as credit "worthy" making minimum payments as paying in full, but your score will go up paying in full. Creditors will give you credit faster and higher credit limits if you pay in full - and they see that on your credit report.
Note: On none of the credit reports that I've viewed (of mine every year - 3 per year in the past 7 years) did it ever state "makes minimum payments"...but it will show the amount of the last month's payment....
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cookiesmom
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not necessarily....you need to show that you can maintain that payment timely....this is a lot of what is looked for....timeliness, amount, if it is late, how late....so sometimes it is better to make the payments just pay a little more than the minimum
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rltouhe
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Your credit is based on your rating. They look at how long it took you to pay, if you were late paying etc and your credit is based on that. If you make a minimum payment on your credit card you will never get it paid off. You need to pay more than minimum.
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miketorse2
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YES YES YES YES! PAY THE BALANCES IN FULL!!!!! I can't believe people believe this stuff.
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The Foosaaaah
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yes
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paanbahar
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Generally yes, but another factor to consider---Credit score also looks at your overall debt, so if you are making min payments on a lot of credit cards, vs. paying them off in full, yr credit will be better scored better if you paid in full
And why would you pay the min. and pay 18-25% interest on the balance? That is irresponsible.
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sara_busa
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I've always heard "no." Because if you are paying your balance in full, the credit card company isn't making money off your interest.
I've found that the best thing to do is to pay above the minimum payment, but avoid paying off the entire balance with one payment. This way, a credit check will not state "makes minimum payments" which could look negative to some creditors. By making above the minimum payments regularly and on time, you'll build good credit in no time.
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kurtbiewald
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NO, they look at the interest that you pay them. That is what will build credit.
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joey322
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it is good to always pay your cards off every month, however, some will tell you that it betters your score to have a small balance. i disagree b/c if you keep a small balance on the card, then you are paying more money b/c of interest.
i'd rather not pay interest.
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Reaper King
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yes. careful not to exceed 50% of your limit though. once you do it automatically drops your score every day it is over that mark.
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mrsreadalot
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Yes. Most companies that view your report just want to see how you pay your bills each month. Paying in full each month is great.
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Another Perspective
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It isn't close to being that simple. It is more important for you to pay all of your cards down to less than 25% of the balances than paying one off. Also, if you are trying to build credit, you should carry a very small balance on your cards, something that you can pay off with your extra income every pay check.
Whatever you do pay more than the minimum payment every month so your credit report states that.
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paul
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Pay in full is always better than making minimum payments. You are a credit risk for a house, if you can't even pay off a credit card bill. A good long-term debt to carry is student loan and mortgage. A credit card debt only shows that you spend more than you make. It is all about demonstrating financial responsibility.
Your highest monthly spending amount for a credit card shows up on your credit report, you can try to charge everything to just one credit card and pay it off. I have heard that this helps a little to increase your score.
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dsmith68111
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yes and a big plus is that you pay less interest each month. The credit card companies don't like it because they don't make as much money if you paid the minimum balance and they get to add lots of interest.
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fee20002000
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yes and no...paying your bills on time is good...but when you try to apply for more credit or a credit line increase...creditors will look at the fact that you're only paying the minimum amount due and may feel that you won't be able to handle more debt. plus, if your charges have interest attached to them...like most credit cards do...you're really only paying off the interest and not the principle...which could take you a long time to pay off the card...credit card companies count on this because they can make more money off of you that way...so pay more than the minimum whenever you can...its actually better...
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NICOLE D
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The best way to build your credit is to use only what you can pay off when your bill is due. When making the minimum payments only $5-10.00 goes to the actual balance and the rest go to interest and finance charges. So if you want to pay your bill down you need to pay at least 40 to 50 dollars over the minimum. Some may say to carry a balance for 2 or 3 months and then pay it off. That is fine but you don't want to add to the balance and it be more than what you can afford. Try to keep your balance under a hundred dollars or so. You have to be very disciplined on your spending with credit cards because it is so easy to get in over your head. Good luck.
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sejaybebo69
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best option is to pay two to three times the amount of the balance you are actually paying then add interest on top...basically your minimun times two and a half or so
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spiritwalker
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No, it takes time for the company to raise your credit, they want to see how you do on paying in the first place. It usually takes 3 months before they will raise it, sometimes longer.
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hugh.G.rection
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You should leave 1/3 the balance on the card for maximum benefit. The credit bureaus like to see you are using the credit you have.
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nicolehope
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murzun's got it right. I'm in my early 30's and have a very high credit score. I charge almost all my purchases and pay it off in full each month. The debt that you need to pay off over time to build your credit is not from credit cards, its from things like, student loans and car payments - installment accounts. Those are the ones where you make the required payment on time every month to help raise your credit score.
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