These days, more people use their credit cards than ever before due to the extensive creeping rise of inflation.
However, those who fall behind on their credit payments immediately see damage to their credit score. This score gets used by landlords, lenders and even some employers, so it is important to keep a good score however possible.
What is a revolving balance?
Experian discusses revolving balances in credit cards. This is the leftover amount that a person still owes after they make a payment. With most credit cards, a person has to pay an interest fee on any revolving balance.
Credit cards with high-interest rates can cause people with revolving balances to spiral into even deeper debt due to the sheer speed at which debts will stack.
What is the impact on a credit score?
The credit utilization ratio makes up roughly 30 percent of a credit score. This is how much a person uses on their credit card versus the amount that they have available. Generally, the lower the utilization rate, the better.
People who use more of their credit than what they have available will typically see their score drop. However, if a person has a revolving balance that they pay off regularly, this can actually cause a credit score to increase.
Bankruptcy and other, similar debt relief options exist to help people get out of the hole if they have so much credit card debt that they cannot feasibly pay it off, or if they consistently make the minimum payment every month as their debt grows.