Keeping a running balance on credit cards?

[smackababy]

I wonder if your score is out there all of the time or is it generated only at the time of an inquiry?

Also, if FICO sends info to the bureaus regularly or if they get it from FICO when there's an inquiry?

Inquiring minds....

That is a good question. I would imagine it is generated from the current (current, as in what they have, not what is actually current) snapshot of your credit report. I think credit card companies only report once a month anyway, so having a floating balance won't be a huge impact if you pay it all off.

 

[z1ggy]

I wonder if your score is out there all of the time or is it generated only at the time of an inquiry?

Also, if FICO sends info to the bureaus regularly or if they get it from FICO when there's an inquiry?

Inquiring minds....

No clue honestly, I'd have to research that one. Shall I inquire about this and get back to you?

 

[sze5003]

$100 balance isn't going to kill your credit score unless your total available credit is like $300, and even then, it won't hurt it that much. The only issue is that you will be paying interest on the $100, which is money you shouldn't have to pay. You should try and knock some of that down, if you can swing it. Even if it is paying like $123 rather than $93.

I think some cards have a grace periods so as long as you don't pay just the minimum but you pay the last statement balance you avoid interest. Paying the current balance each month would mean you are just overpaying for that months statement.

I would do that if I didn't want a balance at all but I won't be applying for any loans any time soon.

 

[highland145]

No clue honestly, I'd have to research that one. Shall I inquire about this and get back to you?

If you have the time. I've been pulling reports for 25+ years and don't know. It's like a super secret that even the NSA doesn't know.

 

[highland145]

That is a good question. I would imagine it is generated from the current (current, as in what they have, not what is actually current) snapshot of your credit report. I think credit card companies only report once a month anyway, so having a floating balance won't be a huge impact if you pay it all off.

I only upload at the end of the month too.

 

[sze5003]

I usually see changes on credit karma every month or so. Discover gives it to you free of you want each month too. But it's always been a mystery.

I was decline for a card at one point even though credit karma said I had an excellent chance of getting it.

 

[smackababy]

I think a lot of cards have a minimum rating threshold and then additional requirements. So, credit karma could have seen you met the minimum rating to obtain the card, but didn't know about the internal requirements you didn't meet.

The only card I was ever declined for was my first credit card application. After that one, I got a department store card (easier to obtain, but only available for use in that store) and after 6 months reapplied. I also applied, on two separate occasions, for cards for some kind of food reward (free pizza, I believe) and got both cards.

 

[z1ggy]

If you have the time. I've been pulling reports for 25+ years and don't know. It's like a super secret that even the NSA doesn't know.

Oh.. They know alright. I hear it's part of Snowden's next leak of info. I eagerly await it

 

[Schfifty Five]

1. Get a no annual fee CC (interest rate don't matter since you won't be keeping a balance)
2. Use CC whenever you can.
3. Pay off each statement in full, by the due date.
4. Try to get a high credit limit so that your utilization % ratio (or whatever it's called) is low.

 

[TallBill]

I normally keep a rotating balance on my card but since life happened and I now have a credit card balance I'm back to using my debit card. Luckily I have a 4% APR.

 

[sze5003]

1. Get a no annual fee CC (interest rate don't matter since you won't be keeping a balance)
2. Use CC whenever you can.
3. Pay off each statement in full, by the due date.
4. Try to get a high credit limit so that your utilization % ratio (or whatever it's called) is low.

By keeping a balance do you mean a current balance or statement balance. Because if you use it for everything you normally used debit for, then you will always have a current balance greater than the statement balance.

 

[HardcoreRobot]

this is one of the reasons why many of us have urged people over and over not to use debit cards for everyday purchases.

if you are paying your balance every month you are not carrying a balance and will not incur any interest.

if you find you are using too high a percentage of your credit at any given time, just apply for a higher limit or additional cards. IMO this really isnt that important.

 

[sze5003]

Right but by using it every time you actually are carrying a balance it's just not a carry over balance it's a balance for the next statement.

 

[KeithTalent]

Maybe it works differently down South, but up here there is absolutely nothing negative that happens to your credit score or borrowing power if you have a credit card balance throughout the month, as long as it is fully paid by the date on the your statement.

This is how the majority of people I know handle things; use the card to make almost all of their purchases, since it's protected and they get miles/points, then just pay it off at then end of each month. This is how I do it and my credit has no issues plus banks fall over themselves to lend me money.

KT

 

[Schfifty Five]

By keeping a balance do you mean a current balance or statement balance. Because if you use it for everything you normally used debit for, then you will always have a current balance greater than the statement balance.

Yes, I mean that you will only pay off your last statement. And that means you may or may not ever get your balance down to $0.00 if you're constantly running your CC. However, that's fine so long as you are paying your statement balance in full.

 

[sze5003]

Yes, I mean that you will only pay off your last statement. And that means you may or may not ever get your balance down to $0.00 if you're constantly running your CC. However, that's fine so long as you are paying your statement balance in full.

Yea that is what I plan on doing. This statement it's only $93 as I just started using it. I get 1% cash back on everything and 5% on special categories that change each month. This month until September it's gas so I'll definitely take advantage of that.

Obviously next month's balance will be larger but it should not be an issue as I'm only buying things I normally pay for each month with my debit card so it's only gonna feel weird paying a large sum at once each month for the first few times.

Also, what procedure is followed if you find another card to apply for say that has better benefits? If you are using one to constantly run a debit balance, will you get approved? I plan on paying off my other cards soon this month ( small balances left ) and just using this discover one as my "debit" card but later I may want to look for another card for better rewards.

 

[BarkingGhostar]

I think the theory is, maintaining a small balance shows you are financially responsible and you can have money made off you (interest). Companies like that.

I understand what was said and what you are saying. But my personal experience is that every 6-12 months I have to keep requesting my CC issuers to lower my available balance to keep each card <<$20K.

I have no need for it, my behavior doesn't suggest (or dictate) it, and they seem to like us for some odd reasoning. Then again the only thing we are lazy in paying (meaning not paying off early) are the weekend car and the mortgage. Everything else is paid off ahead of time to very early.

Now if our not having even a minimal balance every month is supposed to be negative, the CC issuers in our case is completely unaware of it. :biggrin:

 

[Schfifty Five]

Yea that is what I plan on doing. This statement it's only $93 as I just started using it. I get 1% cash back on everything and 5% on special categories that change each month. This month until September it's gas so I'll definitely take advantage of that.

Obviously next month's balance will be larger but it should not be an issue as I'm only buying things I normally pay for each month with my debit card so it's only gonna feel weird paying a large sum at once each month for the first few times.

Also, what procedure is followed if you find another card to apply for say that has better benefits? If you are using one to constantly run a debit balance, will you get approved? I plan on paying off my other cards soon this month ( small balances left ) and just using this discover one as my "debit" card but later I may want to look for another card for better rewards.

I feel like you're making this more complicate than it really needs to be. If you want to get another CC, go for it. You can split your charges on both or however you feel fit. Just make sure to pay off each statement balance by the due date and you will be fine.

 

[AyashiKaibutsu]

I like having a discovercard an amex blue card an amazon card and my bank account is capital one where I get 1.5% on my debit I can get good rewards from any one of them and worst case the amazon and capital one are visa and mastercard so I'm good anywhere (in the US).

 

[Svnla]

As long as your running balance is between 10 to 20 percent of your credit limit, you are ok.

Just use the card and pay off if your running balance is over 20%. Make sure you use a reward credit card to get cash back or at least points or miles. Never let a good credit card goes to waste.

<<---- just received $2,000 from selling miles. Life is good.

 

[TheVrolok]

I did away with debit cards and only have an atm card for this very reason. I have two credit cards and use one for monthly recurring payments (cable, electricity, Netflix, etc) and the other for purchases. Generally put 5-15% on and pay in full each month. fico is 780 and I imagine it would be better if I didn't have 355k in student loan debt and a 56k salary.

 

[RossMAN]

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Credit cards > *

 

[JamesV]

NEVER use a debit card. NEVER.

Debit cards do not have built in fraud protection. My bank charges $11 a month for it.

Use a credit card, and if you can't get one, go secured. My credit score was 810 after 2 years on a secured card. Secured does not mean a lower score versus a regular CC.

Interest rates are shit, so trying to keep the highest balance in an account and only taking a little out via a debit card as it is needed is meaningless towards your credit score or interest.

Running a balance is also a bad idea, if you can pay it off. CC companies make their money off of per-transaction fees from businesses. Sure, they would like you to pay interest on balances, but at the end of the day, that 10 cents from each transaction is more attractive than having their money tied up, and the possibility you may default and your account may need to be sold for pennies on the dollar to a third party collection agency.

I get platinum offers at least three times a week, including from my current CC company. I take out $1,000 a month in cash for groceries and day to day expenses, and NEVER use a debit or ATM card.

If you don't believe me, it's pretty easy to prove. Try it for six months.

 

[sze5003]

I'll be able to pay it off each month as in the statement balance since I have trained myself before when I only used the debit card. I only buy things I normally bought with debit so it's not like I'm going to make extra purchases that I can't afford.

Bills are another story and I just have them come out of my bank directly. I don't spend too much so I can't get all those rewards but cash back at least is nice.

 

[KeithTalent]

I feel like you're making this more complicate than it really needs to be. If you want to get another CC, go for it. You can split your charges on both or however you feel fit. Just make sure to pay off each statement balance by the due date and you will be fine.

100% this.

KT