Best way to pay

dopo112

Hi,

So I want to use my credit card to build better credit. I was thinking about getting a credit card setting a budget of a small manageable amount, say like £200 used it for everything and then clearing the balance every month. 

However, I told someone this plan and they seemed to think that this wasn’t a good idea and it was good to run a small balance on the card month to month to improve my credit utilisation ratio. 

So my question is, which is the best way? My plan or carrying a small budget over month to month, bearing in my mind my goal is just to improve my credit score.

[Deleted User]

Just put your regular spend on it and clear in full each month. 

Don't worry about either utilisation or credit scores.

jonesMUFCforever

Never pay a penny in interest if you can avoid it.
Doing what zx81 said will be the best way forward.

penners324

Whoever told you to keep a balance on a credit card is a fool. They're paying unnecessary interest to the credit card company 

MinuteNoodles

dopo112 said:

However, I told someone this plan and they seemed to think that this wasn’t a good idea and it was good to run a small balance on the card month to month to improve my credit utilisation ratio. 

So my question is, which is the best way? My plan or carrying a small budget over month to month, bearing in my mind my goal is just to improve my credit score.

They don't know what they're talking about, don't listen to them.

Do some normal monthly spending on it, set up the direct debit to clear the balance in full every month. That way you'll build up some credit history without having to pay interest. If you'd listened to that someone you'd end up paying interest you don't have to for no additional benefit.

RobM99

penners324 said:

Whoever told you to keep a balance on a credit card is a fool. They're paying unnecessary interest to the credit card company 

Exactly this. Be a customer CC companies don't like!

PRAISETHESUN

There's absolutely no need to pay to build credit history - be it through credit building products or paying a balance on a high interest credit card. Do as discussed above - get a card and use it to make some of your regular, budgeted spending each month and pay it off in full (set up a DD so you can't forget) once the statement has been generated. 

And as above - ignore your score or utilisation ratios. The main focus is to demonstrate that you can manage credit responsibly.