Is paying off your credit card bill bad for your credit rating?

20aday

In the past I've 'cleared' my credit card in full most months before a statement was generated (i.e. spent £10, waited for it to appear on my account then paid it off).

Of course to the CRAs and potential lenders it looked like I had a lot of unused credit.

Once I'd read on MSE what to do I started paying the balance off once I'd received my statement and after four months one lender increased my credit limit.

Mr_K

Always paid off my cc cards in full by DD for many years, never paid a penny interest just accumulated cashback. Credit rating is 994 out of 999.

Thrugelmir

TheLondoner wrote: »

because companies want to make money from you and if you don't pay them interest they don't see you as a profitable/good customer. Is there any truth to this?

Turnover through the account is often more profitable. As retailers pay a transactional fee to the credit card company. In reality consumers pay the fee as we all pay higher prices as a consequence of these charges.

d70cw6

god, no! you should never fully pay off your credit card bill.

if you do, you would be looked at unfavorably by the credit companies and be more likely to get a higher interest rate in the future. paying more interest is bad!

bigadaj

Mr_K wrote: »

Always paid off my cc cards in full by DD for many years, never paid a penny interest just accumulated cashback. Credit rating is 994 out of 999.

You get five points for buying broccoli.

eskbanker

d70cw6 wrote: »

god, no! you should never fully pay off your credit card bill.

if you do, you would be looked at unfavorably by the credit companies and be more likely to get a higher interest rate in the future. paying more interest is bad!

If you fully pay off your bill then interest doesn't come into the equation at all....

Having said that, your view coincides with one other poster, who refuses to come up with any sort of evidence to support their claim when challenged - perhaps you'd care to offer something to substantiate your opinion, because none of us who pay our bills in full every month seem to experience what you're describing?

LuSiVe

d70cw6 wrote: »

god, no! you should never fully pay off your credit card bill.

if you do, you would be looked at unfavorably by the credit companies and be more likely to get a higher interest rate in the future. paying more interest is bad!

Wow, someone should tell that to Yorkshire Bank, M&S, Asda, Barclaycard, Halifax, MBNA, TSB, Tesco, Sainsbury, Virgin Money, Smile, all of whom haven't taken my cards away or put the interest rate up despite getting paid no interest at all.

(Yeah, I really should cancel some of those...)

d70cw6

sarcasm fail.

Smodlet

bigadaj wrote: »

You get five points for buying broccoli.

But only if you eat the stalk.

eskbanker

d70cw6 wrote: »

sarcasm fail.

Unsurprising when (as per my reply) there's someone else who promotes the same message with apparent seriousness - sarcasm usually works best when it's clear to others that it's not meant at face value!