pay off or carry a balance on cc?

Banks exist to make money off you. You have a "profitability" score, If you pay in full each month such score is lower, because to them , you are not a viable profit maker.

When it comes to asking for favors, increases, lower APR's, and BT offers, they risk more with no return.

Cap 1 is king of this profitability model. I'm sure the rest of them do it to.

Roughly like that.

 

Never pay interest if it can be avoided. As time goes by, you'll get limit increases just based on a payment history. If your're paying your cards in full every month, you're building a very positive credit history. Don't forget, a bank gets a transaction fee everytime you use the card. You're making 'em some money and they'll be happy to keep your business.

 

Keepmine is absolutely right. Excellent post.

I suggest this - for credit cards with grace periods only:

First:

Pay off the balance in full per month 5 months out of the year. But in order to get your credit score optimal, allow the balance to pass over the cycle date (or the date in which the card updates to the CRA), so that an outstanding balance will exist on the credit report. And then within your grace period, pay off the card in full.

1. The credit card gets money from the merchant, as keepmine pointed out.
2. The CRA sees you spending money while maintaining a R1 rating, and gives them a measure by which to score you well.
3. You pay no interest.
4. You keep yourself from getting into debt. Freedom from debt is a beautiful feeling.


Second:

1.Two months out of the year, pay a utility (or some other monthly bill for which you normally pay cash) with your credit card. Allow the balance to carry over into the next two billing cycles (carry a balance) to allow the CC company to generate interest. Of course sock that utility money into a savings account and then after you generate interest, pay it off in full.

I carry a balance on two cards out of six total . One is a sizable balance transfer at 3.9% apr. It is my debt, and I want to end it, as quickly and cheaply as possible. The other is a 0% card with a low balance. I'll have it paid off by the time the 0% rate expires.

All of my other cards, in rotation, are charged a week before they cycle, and then paid off before they cycle again. When I need to increase my internal profitability score with a particular company, I'll just do a balance transfer to them and allow them to get interest through the BT. But hopefully - one day I won't have a balance to transfer. That would be the day of my happy dance.

 

Good ideas Marcie. Looks like you and I are a couple of reformed "fiscal sinners" I'd take a "0" FICO score in exchange for "0" debt in a heartbeat!

 

Amen to that!!!


a repentant fiscal sinner learning her lesson,

 

Me too! No more credit abuse for me!