Thread: Credit cards are a double-edged sword

I'm big into getting rebates on my credit cards, whether they be travel miles or cash back, and paying off the entire balance every month so I don't spend anything on interest. However, the plan doesn't always work out so well - especially when I have less income and am forced to carry a balance. Either way, though, I am still glad I have the card as a line of credit to keep me afloat.

They're a single-edged swored for me, and not in a good way!

lol! I think we can all relate.

Other than going overboard, I don't think it's a big deal to carry a balance on your credit card. It's all about personal preference so if you prefer to pay extra in interest so you can have that gorgeous pair of shoes now instead of "saving" then good for you.

Paying in full saves you money, no finance charges. However, for the purposes of improving your credit scores you need to carry a small balance and have it reporting on your credit reports.

Why do you think that Hawaii? I'm not saying you're wrong but if that's true I'd be interested in reading up a bit more on the specifics.

It's not written anywhere for the public to read up on. Between my experience and that of countless others I know in other credit forums, 1-9% util reporting on all revolving trade lines will net you max FICO points with regard to utilization percentage calculations scoring. Here's the reason why! FICO scoring wants to see how well you manage your available credit. Using your CCs regularly, always paying on time and keeping small balances demonstrates your ability to handle credit responsibly. Thus your scores go up and you're a low risk.

Paying cards off every month isn't managing credit well? Sounds weird to me.

Originally Posted by muchodebto

Paying cards off every month isn't managing credit well? Sounds weird to me.

Yes it does seem weird, I agree. This is my thinking, if you have a house already and are not planning on buying a new car or applying for new credit than yes it's a good idea to PIF. In this situation you save money and scores are secondary. Now if you're planning on applying for something and might need a few extra points, than having 1-9% util on revolving accounts reporting will net max FICO points.

Hawaii you are a fountain of good info!