To build personal credit, is it best to pay total balance on a secured credit card or just pay the minimum req

The person at the bank that is helping me get a card said I should pay the minimun.

I have read several articles saying it is best to pay off entire balance each month.

12 Answers

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  • Anonymous
    1 decade ago
    Favorite Answer

    you want to pay the total balance

  • 1 decade ago

    I have been advised by my financial advisor that the worst thing you can do is pay the balance all at once. However, do not pay the minimum either as the interest will eat you alive. Here is what you should do, I think.

    Take the minimum payment each month. Add the month's interest to that amount. Then add one-half of a minimum payment to that. Pay that amount each month.

    Then after a 6 month period pay the entire balance. This will give you a 6 month solid history of paying on time (the only thing they look for is if you paid on time, and that is what builds good credit.

    good luck.

  • 1 decade ago

    A secured card may not report to a credit bureau... you should check if it does and how often. You should also calculate the credit rate and how much you will end up paying in order to show a credit history. Pay more than the minimum, because you don't want to show a lot of debt, you want to show the responsible use of debt. So, buy one thing and pay it off over a few months, but don't just pay the minimum, because it will get really expensive really quickly.

  • 4 years ago

    Yes. One big factor in your credit score is the age of the longest account in your file. Suppose you have the following two scenarios: 1) $1,000 balance, max credit line $2500, opened 8 years ago. 2) $1,000 balance, max credit line $2500, opened 6 months ago. The former is going to be MUCH better for your credit score than the latter. . Furthermore, opening and closing a lot of accounts within a short period of time can have a negative influence on your credit score, even if they are closed with a zero balance. The occasional balance transfer to a card with better terms is not a bad idea, but you should keep an eye on the big view.

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  • Kitty
    Lv 6
    1 decade ago

    You build credit by charging THEN paying it off. Pay it off IN FULL each month !!!

    I have only had a balance carry over for three months once in my credit lifetime, years ago. Owing does NOT build your credit, PAYING does. Do not be fooled into thinking having a balance owed helps you in anyway.

    I even got the same advice you got from your bank, from a person who was suppose to be a financial consultant / lender. Claiming that paying stuff off fast and not having a balance was actually bad for your credit. Well it is simply NOT TRUE... I do not have a score well into the 800's by owing people everywhere !!!

    I would really consider looking for a different bank if I were you. You want people smarter than you handling your money and working in your favor. It could be, they are simply miss informed but miss informed things can cost people alot of money in the long run.

    Pay off your debts quickly and over & above the minimuns if you must carry a balance owed and life will get better everyday !!

    : )

    Good Luck !!

  • Max
    Lv 6
    1 decade ago

    make sure that you at least make the minimum payment due each month. If you can afford to pay more, this will reduce the amount of interest you will have to pay. Don't pay off the total balance for a few months. This will help you establish credit.

  • 1 decade ago

    it is definitely best to pay off the balance but that is only because you won't accumulate interest that way. to establish credit, you want to pay the minimun because credit is established by proving your conistent ability and responsibility to make money payments. the reason for that is that whoever is looking at your credit report is probably going to be lending you an amount in which you won't be able to pay in full, so they don't care to see that you have a $1000 dollar card and make pay off the balance every time you go on a shopping spree because that is essentially the same thing as not having a credit card, since you're paying for it all right away anyways. they care about conistency. keeping a nice bank balance and paying all of your bills through your bank helps tremendoulsy also....it's showing them consistency as far as proving to them that you do pay all of your bills just like that credit card.

  • 1 decade ago

    You build credit by owing money & then paying it back i a timely fashion. It works better if you have a balance owing.

    A mortgage on a home is one of the best ways.

  • 1 decade ago

    You need to show that you can make payments ON TIME for an extended period of time.. so.. pay the minimum or a little more and don't pay it off for at least a year.. make sure you don't send in any late payments or miss any payments and your credit will improve.

  • 1 decade ago

    They say it is always good to:

    1) Keep a balance that is below you limit to show you use your card

    2) Pay a little more than your minimum monthly payment...on time!!

    3) Have your card for more than a year

    4) Have more than 1 but fewer than 5 credit cards at a time.

  • Gem
    Lv 7
    1 decade ago

    To build credit you have to carry a balance.

    To save money you have to pay the credit card off.

    Pay off 1/2 every month and don't let the balance go to zero. In just a few months you will start building your credit, then pay it off.

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