What does carry a balance on a credit card mean?

Question

Because someone told me to do not carry a balance on a credit card.

Does it mean dont pay your bills at the end of the month from your credit card and pay the interest?

Answer 1

it means not to have a balance at all on your credit card & to pay it in full. but it looks better to creditors if you keep your balance under 30-50% of your limit, and pay about $20 more than the minimum payment on your credit card. they like to see u making payments rather than just paying it all off at once. you cannot choose whether to pay interest or your principal on a credit card. normally u pay interest 1st anyways. i hope that helped.

Answer 2

it means to not owe anything on the account. so to pay in full

she means 30-50 percent of the total credit. so if your credit line is 10000, 30 percent is 3000 and 50 percent would be 5000.

the 20 dollars more than minimum comment reffered to how much is due. so if your payment is 20 dollars is it always better to pay more than the minimum in this case she mentioned 20 dollars more. so it would 40.

carrying a revolving balance isnt always good. if you have debt of 1000 it is better to pay as much possible that way the interest collected isnt much while gaining positive points for your credit.

Answer 3

Carrying a balance means to owe money on your credit card passed the grace period.  The grace period is usually 20-25 days depending on your credit card.  The Grace Period means how many days before the interest is charged on your remaining balance.

What Marissia is trying to get you to understand is that lenders and creditors want to see you making consistant payments.  It is good to have at least 12-18 months of on time consistant payments.  But it is important to keep your balance under at least 30% of your balance.  This shows that you can manage your debt and finances well.

The reason why someone would tell you to not carry a balance on your credit card is because you are being charged interest on the money that you owe, and depending on your balance, this may put you in a financial bind.

Hope this helped.  Email me if you have any questions.