Should I Carry a Small Credit Card Balance to Build Credit? (Leaving Balance for Credit Utilization? 

Great to know I'm at 720 right now working to get to that 760 you think I can achieve that in 2 months with good utilization rate

Is it 760 or 761?Not that it matters. But at the moment I have to shoot for 600.If I hit 600 I`ll have bragging rights in S.E. Kentucky!

@@andyraphael definitely not in 2 months. But it is obtainable.

mine is 764 and i want 800 lolol

Exactly

Problem is most CC companies won’t tell you the exact report date, since then everyone would be gaming it, and that doesn’t help them make money. So just paying it down to 10% as you go, and in full when due, is the best bet I think. Was concerned about this having a card with a tiny $500 limit, despite the fact that I have normal adult expenses. Have been debt and credit free for my whole life, so I never built up my score enough to get a more reasonable limit. Then I realized I was missing out on things like 2% cash back on every expense I had ever debited.

@@p51mustang24 do it 2 days after the due date to be on the safe side or 1 day

@@CloseDownChannel some of them report to the bureaus before the due date. It's better to pay way before due date.

How about just make multiple payments throughout the month and just make sure the statement balance is fully paid off

All of my cc companies say we don’t know and on top of that they say we report once per month

Better yet pay it 3-4 days before to have a very low utilization or a 0% ideally by that statement closing statement and closing due date.

Pay it in full after the statement.

Thanks so much.

Thanks, I always appreciate your comments!

Ysssss that is what happened to me and I was like why I lost 20 points!

But don't you have to still pay the $5 at the end of the month??

@@jat-justamaturetech-philpj8285 duhhh...no he doesn't. He made his monthly payment and leave that 5 dollars so his score won't drop for paying it off in full. The credit bureaus penalized you for that.

Right have to remember statement close dates and due dates for all cards

@@onlyyours2411 I found that out a month ago and I Started paying most of my card down before the closing date.

@@kimoni6 thats what screwd me, had a card over two years showed only like two payments, cause I'd pay it off everyone I made a purchase.

I`m in the same game. Have to keep track of what card I used. Keep utilization low, Pain in the Butt, But if ya gotta, then ya gotta

Yep it’s a lifestyle for sure !

From how I see it. There’s technically 2 sets of charges on your credit card - the charges from last month and the charges from this month. He’s saying that you should always pay all of last months charges but while also leaving some charges from this month to roll over into next month.

Here is what he’s saying. Ex, your credit limit is $1,000. Your billing cycle is from the 10th of one month to the 9th of the next month. During that billing cycle (10th-9th), you spend the money you’re going to spend, while also paying it down to 10% of your balance. On the 9th (your closing date), they are going to report your 10% usage to the bureaus. Your bill will then be due the next month (let’s say the 4th). You then pay it down to $0 by the 4th of next month. So you’ve already showed you have credit, you use it, you manage it and can pay it. Make sense?

Have a balance/charges on your card, and just pay it all off a couple of days before your due date. Your credit score is checked I think weekly, so they want to see a balance so they know you're using the card throughout the month. So as long as you do that, then pay it off before your due date, you'll build credit without paying interest. Ideally you should try to keep your balance at around 10-30% of it's total (so if you have $1000 limit around $300) through the month, and again, just pay it off before your due date so you're not charged interest.

Exactly. Which is it ?

I got my 7 points back this month! March 2021! I’m on a role people😂

i didnt understand utilization either because i always just paid them off in full every month

Guys listen this information that he is giving you saying that 30% as probly a good mark is a lie and is not true it is not going to help your utilization.

For the most part, wen you pay off your balance entirely, a credit agency like Experian assumes you closed out the account and proceed to drop your score. For almost a year Experian calculated my score assuming I had a dormant card or at times assuming that I wasn't paying as agreed because my balance was always at zero (I have auto-pay set up to pay the entire current balance). I actually called the CC company and they told me to call Experian and tell them that my card was active since it was issued and had a stellar payment record. I opened a dispute and within four days my score was back up 15 points. Whenever your score drops after paying off a cc balance, open a dispute with any of the credit agencies that dinged your score and they always correct it after contacting the CC company.

@@magellanmax yes Experian system stinks

@@magellanmax This is ludicrous.

Should you repeat if? Like when you pay it off and the next month when the statement comes out it should be at 30

@@sam.michaelis yes

@Kenyan Rice Jr I think it’s because it’s a secured card I may be wrong I would do some research on that

The banker at my credit union told me that credit utilization is basically a myth and you only build credit by making your payments in full. I know that's not true but don't know how to convince these people. These people seem to not understand. What do I do? They seem to not even understand why I want my end statements dates. They just said get your e-statement and figure it out.

Can you help me understand

My due date is the 12th so I pay it in full before the 12th but they report it the 15th so my balance is 0$ by then how do I manage this so my score doesn’t fall

@@Iammarlonbrown The secret to building your credit with a CC is to pay your bill in full AFTER the closing date but BEFORE the due date.

@@donh8223 How do you know this? and can you explain?

I did the samething

@@cslaton921 it sucks dude. It 's like you take a step forward and then the fico gods take 2 steps back

I know what you mean. I paid my TargetRED card and my score dropped 16 points😆

@@Beautyhuntress78 damn, I just payed my red card. I am scared.

So you had a small balance and they still didn't charge any interest?

@@kimoni6 - nope, as long as the statement balance from the previous month is paid. For any new charges you’ll receive a 30 day grace period before interest accrues after the new statement closes.

Okay I thought you meant you left a balance from the previous statement balance. My closing statement date was on April 4 and my due date is May 1st . I don't know why they did it like that. I've been making multiple payments too. I've already paid most of my new balance.

Your bill is paid and in good standing, they will report a zero balance and payment made to the all three credit bureau’s..

@@LegendaryWatts thank you so much for the answer and for the quick response.

To my understanding... lol. Paying off your bill like u did will look good on your credit report bc u show zero used credit at the end of your cycle. But if you would have showed a balance on the card at time of reporting to the credit bureau it would of looked better as long as it's not over 30% of the limit of ur card. You still have time to pay your bill after it reports a balance and not pay interest.

@@vanwright7821 true. Most cards offer 15 months of free APR anyways. So why not leave a 3-10% usage each month to report to the credit agencies. lol

You still want to stay below that 10% utilization. However, don't get into the habit of revolving a balance when you have a 0% interest promotion. No real purpose in doing that. It is useful if you NEED to make a big purchase that you know you will not be able to pay in full. At the end of the month. IMO, it is better for you to just get into that mindset of paying off in full every month and act as though you never had that promotion to begin with.

I had 13% usage and lost 12 points

What utilization have you found out that works best for point increases? Also, is the 24% utilisation on your total credit or an individual card that dropped your score?

Once you pay off the cards it will go back up eventually

Yeahh even though your card increased you're still using less than 30 percent... 10 percent the better.... your score will go right back up using less... yes you lost points because ut increased now pay it off it go back up

I’m experiencing the same but what I’ve learned from having multiple trade lines want matter as much it’s the purchasing power and on time payments give you the limit increase either way timely payments I pay them all off then get something small on each one 10-15 dollars to keep my utilization very low which one of the cards will definitely report

I am mostly saying that they report to the bureaus before your bill is due, so there is no need to underpay to keep a balance on the report and end up paying interest. my comment about paying during the month is to say that you can reduce the balance to an optimal utilization when it does get reported.

Lenders are in business to make money, not lose money. Why would someone want to lend you money for you to turn around and hand them back the exact same amount of money? That's ludicrous in and of itself. For that, go borrow it from a friend. That's like saying i'm going to open a retail clothing store and never markup the clothing and sell the clothes for the exact price that i bought them for. What sense would that make?

Thanks! Although I would guess the people on Reddit get even further on exact numbers for maximum optimization and would find this video not nearly specific enough to cover every possible situation 😃😃

You weren't generating any profit for the card company.

@@Shaolin91z Yea, but they sure did a job on my credit report by cancelling them. You'd think not using a card would be a plus, the whole system is a rip off.

@@jlsc4125 Well it's not a plus because they're paying their employees, paperwork, processing and transferring fees etc all to the credit bureau just to see 0 utilization. It wastes the banks time. I know it may sound good on paper, but in reality it's not

@@cross8215 I repeat, the whole system is a rip off, forcing you to use credit you don't need.

The card reports to the credit bureau before you have to pay your bill so you can pay the full balance by your due date and you're good. if anything else was confusing, pretend you didn't hear it because that is the part that matters most.

Short answer: PAY your credit card off in FULL by the due date. Very long answer: Credit card (cc) cycles have 2 major dates: 1) the statement closing date, and 2) the due date. On the statement closing date, the cc company adds up all the purchases you've made over the past 30 days or so, and sends you a bill for the total amount you owe (thru the mail/electronically). You will have about 20-30 days before you need to pay that bill (the due date). You should always pay the total amount you owe by this date (even a few days before just to be safe) and NOT leave a balance. This way, you will not be stuck with paying unnecessary interest. Now the more complicated part. Credit bureaus look at your credit utilization ratio (UR). This is done by adding up all the debt you owe across all cards and dividing it by your total credit limit (across all your cc). For example, if you have 1 cc with $1,000 credit limit, but you owe $500 on it, your UR is 50% (500/1000 = 0.5), which is way too high. Most people rec >30% UR, but it is better to keep it below 10%. So if you owe $500 (say, because you made a large purchase, etc), it is best to pay off a large chunk of it ($400-$450) BEFORE the statement closing date, so that your UR won't be so high. Then pay the rest by the due date. The reason why it is best *not* to pay it ALL off before the statement closing date is because your UR would be zero, which could make future lenders think you're not using your credit cards at all. (UR is important because it is calculated in your credit scores.)

I believe the part that’s confusing people (myself included) is I think you’re speaking of when a person first gets their credit card! Any time beyond your first statement if they report a balance it’s because you didn’t pay in full!

Just so you don't get confused, by "full balance" ProudMoney is referring to the Statement Balance--the bill amount that was reported. Anything that was reported should NOT carry over into the next report because that will get interest. When he said to "leave a little", he's referring to the new amount that will be reported for the new statement because it's not ideal to have every single "new" statement report a $0 bill. But NEVER carry over old amounts from old statement balances.

Watch the video again. You’re using way way way too much credit. You should only be using between 10% and 30% of that $200 on your secured credit card. 30% is the max. I used the same credit card, spent a maximum of $60 a month, and after six months, they gave me my $200 back, and raised my credit limit to $1800. What amount do they raise your credit limit to after they gave you your deposit back, or did you not get it back?

Yea mine has the due date then the statement day so I have to pay mine right

I used a 0% Discover card (with a $2,500 credit limit) as a pivot point to triangulate funds out of a credit union higher interest card and back onto a new credit union Platinum 0% card ($25,000 limit). I made several successive transfers during the initial Discover 0% transfer period, moving $12,000 off of a high interest card and on to the new 0% Platinum card. Then the last transfer I left on the Discover card at 0%.. And just like that I had $12,000 that I had paid a 3% transfer fee on but I wasn't paying high interest on. After working hard and paying those two down, I did it again one year later with a new Bank of America 0% transfer card ($4000 credit limit). And after 2-1/2 years I had eliminated $24,000 of high interest debt. Both the Discover and Bank of America cards regularly offer 0% offers. Discover is more reliable with their offers. Usually there's a 3% transfer fee. Sometimes it's 5% which I won't use. But also sometimes they'll have an offer with $0 transfer fee yet at a interest rate of 4% - 5%. I use those offers to move money from higher interest loans out and back in to my lowest interest credit union card, without having to pay any transfer fee. When I have money sitting on a 0% transfer offer I do not use that card for purchases. And then after I have paid off the 0% transfer amount, I make sure to exercise the card for regular purchases while paying it off in full each month. Each year Discover and Bank of America will bump up my credit limit $500. After using that strategy I was able to acquire a NFCU Flagship Visa (easily done by converting a second platinum card I had to that), a Chase 0% Freedom Unlimited Visa, as well as a Capital One SavorOne 0% Visa. They're all no annual fee cards, with the exception of the Flagship card which is $49, but it reimburses for TSA travel fee, so that knocks it down along with the cash back I get. The portfolio of cards I have now allows me to get 3% back on virtually everything I buy. The NFCU Flagship card and the Capital One SavorOne card are both no FTF (foreign transfer fee) cards, so they work well with foreign purchases and overseas travel. And of course Discover Cards are all no foreign transaction fee cards. So whether it's gas, groceries, restaurants and carryout, drug stores, travel, or entertainment, I use the correct card to get 3% back. And for travel I get more than 3% by using that card's Travel Service. Also I run all of my monthly bills through my Flagship card, which gives me 2% back on everything.

Note taken

Exactly my score dip when I went from 0 percent to 1% just to leave a balance it stated balance increase bring the reason

@@andyraphael mine dropped 50 points on equifax when I did it. After that I don’t do it anymore. My percentage balance was 2%on a total of 80k in availability.

@@rodneytaylor6313 that's wild

Some Credit One cards have no grace period and charge interest from the day you make the purchase. It's a really bad thing that i don't think any other bank does.

9 cents from you and everyone else they have would add up,,,,,,seems like theft

- just shoot for 5% - 10% and you should still be fine.

But if it is always zero when the card company reports, it looks like no card usage at all on your credit report.

@@ProudMoney True, very good point! Although, because they are open accounts it will show positively in terms of their overall credit utilization. When creditors look at their history it would show that they have access to money and always pays back in full.

I've heard people say this before, but it's not something I've ever tried.

Use the All Zero Except One Approach

Real knowledge,👌👍🤠

Exactly, that part of this video is false. I pay every single of my purchases on my credit card off the second I get my receipt back. I treat it exactly like a debit card only with a few extra steps lol

@@EmmanuelC0403 That's not what he said lol.. He said he gained 100 points because he paid off his cards 10 days before his due date which means it made it before his statement closing date. You are just paying yours off right after you use it which isn't helping you at all.. Re-watch Adam's video too learn more..

@@justins6414 true, now that I re-read what he said and that he pays it down to 0% utilization 10 days prior to the due date may indicate he’d still use his card for those other 10 days so he’d still have *some* utilization. However, having a 0% utilization rate still does not hurt you and it’s a myth. My sources come from credit karma, Experian, and Graham Stephan

2 reason not to carry balance on card is 1 interest and 2 it reports on ur credit utilization every month. U have 0 interest for 15 months so u don't care about #1. But if this card is ur only open credit line you want to keep it under 30% utilization if possible.

keep it at 3-10%.. Theres no benefits to your score if you don't use your credit, You only benefit with the company because theyll see that you pay in full each time. So, they'll consider that if you decide to call for a limit increase ..

but first, build your score leaving a small balance. pay it right away after closing date.. and then use it again and leave the usage under 10%... call the bank in 3 months and ask for an increase and they will. Trust.

Autopay is fine. your balance will have been reported b4 the auto payment is made

Appreciate that, thanks!

some ppl may get in a tight situation