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Should I pay off my credit card balance every month?

On Behalf of | Feb 1, 2023 | credit card debt |

Credit cards can lead to serious debt issues. When you carry a balance, unless you have a promotion, you will have interest added on when you fail to pay the balance in full on the due date.

Interest adds to what you owe, and it can add up quickly. Good credit use means paying the balance in full every time you get a statement. But there are some things you should know about doing this and how your credit score will reflect it.

A myth

It is a myth that paying your balance will negatively impact your credit score. Paying off your charges in full every month is a hallmark of good credit usage. Keeping a balance will have a negative effect on your credit score.

Potential impact

Whenever you have a balance, it could impact your credit score, regardless of when you pay it off. The credit bureau’s reporting schedule may not align with your credit company’s schedule. So, what this means is the credit bureau may pull details from the creditor prior to your payment. You would show a balance that would increase your credit usage, which has a negative result on credit scores. Therefore, it is possible to pay off your balance in full every month and still see negative impacts on your credit score. This issue is likely what leads some people to think keeping a balance is actually a good thing.

However, if you want to avoid getting into trouble with your credit card debt, you should pay off your balance every time you get a statement.

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