Originally Posted by devorenm
Yes, you have to show a balance. This is determined by what the CC company reports to the bureaus, which is the amount of the bill. If the amount is zero nothing gets reported. This does not help you establish a credit history. If you wait for the bill before paying, the most common situation, your records will show a balance and therefore help you establish a credit history. Better yet is to pay it down to zero each billing period to avoid any finance charges which can be over 20% APR!
Originally Posted by Jim
How do I know this? Read on ...
I ran into some trouble in this very area. I switched to a card with a great cash-back feature. The new card had a fairly low credit limit. Since I used it so much it often went above 50% of the limit and the credit bureau dinged me for too high a credit balance, even though it was paid completely every cycle. To resolve this, I decided to pay the card down weekly so it never showed a balance. One month my last payment didn't make it in until AFTER the bill was sent. To the credit bureau this looked like an inactive line of credit suddenly becoming active. A warning sign so another ding. Of course I didn't understand that since I had NO inactive line of credit that I suddenly started using. A chat with the credit card people told me all of the above. So I asked for an increase in the credit limit (to help stay under 50%) and also made sure the last payment of each period was sent in AFTER the billing period closed (so the bureaus would see an active line of credit).
Last edited by Bertilak; 02-22-2012 at 07:40 AM.
Somebody's nuts. I don't know whether it's me or them, but somebody is definitely nuts. I just wished I knew, so I'd know, you know?