My credit card limit if 500. I've almost reached my limit. I heard if i pay the minimum every month...?

Question

my credit score will be high rather than paying it all off (even though this is more preferable). I also heard my credit score willl be higher if i use about half my credit limit??

Answer 1

Hi,

The best thing to do is pay it off as soon as you buy something. The more you use your card the more the credit providers love you. They get a percentage of the value of every good or service you buy using the card and their credit.

Answer 2

You should carry some debt to establish your credit, but your score is lowered by using a high percentage of your available credit.  I would pay it down for a couple of months and then pay it off in full.

Answer 3

Credit card debt is a massive problem millions of people are facing at the moment and can really ruin your life.  Repossessions are going through the roof because people cannot afford to live with the massive rises in the cost of living.

You really need to minimise your credit card debt and ideally get rid of it.

Firstly, consolidate your cards into one with a zero interest deal, if you can.  Then get rid of all the others and start paying the one that is left off.  It does mean you are going to have to cut back and live within your means, but that is no bad thing.

Paying off your credit card debt can take some time and will require discipline on your part but it can be done.

Answer 4

It's good to be using a little of your credit limit, since it shows you're actually actively using your credit card, but paying just the minimum will cost you an incredible amount of money.

If you have a balance of $500 and an APR of 22%...

That's an interest charge of about $9/month.

Your minimum payment is likely about $15/month.

Therefore, if you continue on like that, you're only really paying about $6 a month.  If you do that AND keep using your credit card, you're going to spiral into debt very quickly.  Even if you didn't use your card anymore and just continued to pay off the balance by means of the minimum payment, it would take you almost 7 YEARS to pay off that tiny balance-- and you would pay about $500 in INTEREST.

I'm sorry, I know you didn't want a lecture, so I'll refrain.

The quick answer is yes/no.  Yes, you should be actively using your credit card, but no, you shouldn't be carrying a large balance.  It looks good to have a history of timely payments of at LEAST the minimum.

Answer 5

I've always paid my credit cards off every month.  My supposed FICO score is around 750.

Answer 6

Everything they have told you is wrong! You get the most points when your debt to credit ratio is under 10%. What minimum payment allows you to do is reflect positively on payment history which is 35% of your FICO score. That 35% is only affected when you are late and/or default. Making the minimum just ensures that you are not late but then you are paying tons of interest on your balance.

Keep your utilization under 10% for best scores. Anything over 30% will start hurting your scores. Using half of it is not good for your FICO scores.  

Answer 7

Oh good lord, pay it off in full every month if your going to use the stupid card.  If you can't pay cash for something, then you can't afford it.

Answer 8

You need to pay the BALANCE every month not the minimum