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Mor32

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Is it better to pay off a 200 or 500 dollar balance over 6 months on a credit card?
Have a store credit card that has 55 months no interest, is ot better to pay it off now or carry a 200 or 500 balance over 6 months to raise my credit score

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Truly depends on your credit utilization

Helpful to 3 out of 3 people

That's an incredible deal, getting a card with 55 months no interest! You always want to keep your utilization low, below 15%, if at all possible. The best thing to do would be to charge at least one purchase per month on the card, totaling no more than 10-15% of the total available credit and then to pay the balance off in full once your statement arrives. So if your card has for example, a $1000 limit, you would want to make at least one purchase during that card's billing cycle totaling $100-$150 charged. Once your statement comes in, pay off the balance in full. The dance with improving your credit score really involves charging something on your account, allowing the billing cycle to close so that the credit card company sends your balance to the credit bureaus (this usually happens around the time they mail your statement to you) indicating that you are in fact using the credit, and then paying the balance off in full before the due date all while spending no more than 10-15% of the available credit limit unless absolutely necessary. If you do have a large purchase that you need to make but are unable to pay for in full out of pocket, this card could help you by allowing you to make payments on that purchase that are interest-free. However, even in a scenario where the card is helping you make a large purchase you could not otherwise make, you still want to be sure you are utilizating absolutely no more than 40% of your available credit, keeping in mind that the goal is usually no more than 10-15%. Essentially, you do want to make purchases on this card each month and pay them off on time but "carrying" a balance that you are paying off is no more helpful than making a small purchase each month and paying it off in full UNLESS the $200-$500 balance you would be carrying is less than or around 10-15% of your available credit limit. Hope this helps!

-Taylor

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