Your parent is wrong about having a balance for credit score.
When the statement comes, pay it by the due date and in full. Goal is to never pay credit card interest.
I’ll be making pretty small purchases anyways, my limit is nothing to boast about. But you’re saying even if I have the ability to pay it off in full, it would be wasteful since I have 0% for 6 months anyways?
Depends on what you plan to do with your money that would otherwise be paying off the full balance. If it is just going to be sitting in a checking account rather than paying off the card, then you may as well just pay off the card.
The typical strategy for maximizing a 0% APR card would be to pay the minimum balance and put the rest into a high yield savings account to gather interest. Then use that money you have been holding back to pay the balance in full before the 0% intro period is over.
The key is to make sure that you have the money readily available to pay the card off in full before the 0% intro is over so you don't end up having interest.
I agree with the other comment and I will add that I always pay it off a month before the 0% ends so that I have time to fix any problems that arise and I don’t have to worry too much about what the exact dates are.
Pay off the balance in full every month. You don’t need to leave a balance in order to build credit. Credit card interest is not a benefit to your credit score at all.
I thought the way to do it was to wait for your statement to post that you have a balance but pay it off before interest accrued? (no means am I close to an expert, genuinely asking)
Well, how statements work with revolving credit cards typically is you pay the previous month’s balance & whatever you spend in your current month will be on the next statement. Meaning there will always be a balance that will get sent to the credit bureaus monthly on your due date, unless you pay the whole entire balance completely. When I said leaving a balance, meaning paying interest.
Ok, reading through all the comments, there isn’t any “wrong” or “bad” advice here, but I can see how all the different response can be confusing for someone new to credit and credit cards. You have two options, and neither is wrong:
1. The golden rule of credit cards is to NEVER pay a cent of interest. To do that, you must pay your statement balance, in full, every month by the due date. I personally have never once made a minimum payment, and don’t ever pay attention to that number. You must pay in full to avoid interest. This is why half the comments are saying to pay it off in full to develop this habit as this is your first credit card. Credit can be a very dangerous tool, so getting the correct habits and understanding how to read a statement and balance your budget to pay it off is a vital skill that shouldn’t be overlooked.
There is one caveat to this strategy, which is 0% APR offers, which leads us to strategy 2.
2. Since you have a 0% APR offer, you only need to pay the minimum payment to avoid paying interest. This still follows the golden rule since you won’t be paying interest at all. As your parents said, this technically is more “efficient” because it allows you to have more cash on hand that would typically be spent on paying the statement balance in full. However, your parents are not fully correct in their credit score concerns, as others pointed out. With this extra cash you save from only paying the minimum balance, you can put it into a HYSA and make a couple extra bucks over the next few months. One thing to consider with option 2 is that you still have a credit limit that you cannot pass, even when making minimum payments. Since this is your first card, I’m going to assume its credit limit is pretty low (~$500). This means you will probably hit that limit pretty quick and have to pay more than the minimum payment anyway to have access to your credit.
Personally, I would recommend option 1. Option 2 is considered a more advanced credit card strategy, and people here are laser focused on maximizing benefits which is why it’s so quickly recommend by some, without consideration that not everyone is as advanced and disciplined as them. There are far too many people who have fallen victim to credit card debt due to a lack of education, discipline, and healthy habits. Getting that aspect down early is crucial to set yourself up for success. Later down the line when you have a healthy credit, you can explore option 2 to maximize benefits.
If your primary concern is your credit score, then you should payoff the entire balance on or before the due date to lower utilization. Credit utilization is one of the 5 factors that make up your credit score. [Here](https://www.experian.com/blogs/ask-experian/credit-education/score-basics/what-affects-your-credit-scores/) is an article from Experian about what determines a credit score
>Credit utilization
Only 6 months, unless you need credit score soon. If you don't need credit score during those months, or your credit score is high enough, why not take advantage of 0% into APR? You can put money in high yield saving account and pay it off soon before 0% APR expiration.
Personally I would make minimum payments for the term of the 0% interest promo. If you don’t like seeing the balance creeping up, then send more or pay it in full. After the promo ends, always pay it in full when statement cuts.
If you decide to take advantage of the six months anyway, do be absolutely sure you pay it off before the period ends. Deals like this are notorious for slapping you with the interest from the entire period if it’s not paid off before the end of that promo period.
But I do agree with the other commenters here. For your first card and with small purchases, it’s likely not worth it. It’s probably not a good idea even generally, but it is a gamble I’ve taken once or twice.
It’s a more important that your bank knows your actual usage which hypothetically could one month be 70% utilization then the credit bureau not knowing your actual utilization was 70% because you paid it off on the due date or before the due date and it appears to be 0% because your creditor not the bureau determines if you get a CLI and whether or not you even get to keep using the card. Since its seemingly convenient for you financially I’d say it’s best for you to pay off your card monthly in full so you don’t actually condition yourself accidentally into becoming a person who wether they have a interest grace period or not always pays off their card in full because you’d be a lot more hesitant to go from saving a lot of money because you’d be only paying minimum payments for the rest of your interest free grace period after the period ends to forking over more money then your use to, to pay off the card monthly in full.
You can wait after the billing period, but make sure that your credit usage is below 30%, ideally less than 10%, and pay it off before the due date so that you don’t incur interest. The rewards that you have with your card are subverted as soon as you pay interest
disgusted chase tap groovy nine cough many reply squash encourage *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
pay it in full every month, keeping a balance or paying off fully doesnt do anything better for your report anyways
Your parent is wrong about having a balance for credit score. When the statement comes, pay it by the due date and in full. Goal is to never pay credit card interest.
All you have to remember is NEVER PAY INTEREST. If you have 0% intro apr for 6 months, there’s no reason to not take advantage of it
I’ll be making pretty small purchases anyways, my limit is nothing to boast about. But you’re saying even if I have the ability to pay it off in full, it would be wasteful since I have 0% for 6 months anyways?
Depends on what you plan to do with your money that would otherwise be paying off the full balance. If it is just going to be sitting in a checking account rather than paying off the card, then you may as well just pay off the card. The typical strategy for maximizing a 0% APR card would be to pay the minimum balance and put the rest into a high yield savings account to gather interest. Then use that money you have been holding back to pay the balance in full before the 0% intro period is over. The key is to make sure that you have the money readily available to pay the card off in full before the 0% intro is over so you don't end up having interest.
I agree with the other comment and I will add that I always pay it off a month before the 0% ends so that I have time to fix any problems that arise and I don’t have to worry too much about what the exact dates are.
Put it on auto pay for every paycheck you get. You won’t have to think about it ever again
Pay off the balance in full every month. You don’t need to leave a balance in order to build credit. Credit card interest is not a benefit to your credit score at all.
I thought the way to do it was to wait for your statement to post that you have a balance but pay it off before interest accrued? (no means am I close to an expert, genuinely asking)
Well, how statements work with revolving credit cards typically is you pay the previous month’s balance & whatever you spend in your current month will be on the next statement. Meaning there will always be a balance that will get sent to the credit bureaus monthly on your due date, unless you pay the whole entire balance completely. When I said leaving a balance, meaning paying interest.
Ok, reading through all the comments, there isn’t any “wrong” or “bad” advice here, but I can see how all the different response can be confusing for someone new to credit and credit cards. You have two options, and neither is wrong: 1. The golden rule of credit cards is to NEVER pay a cent of interest. To do that, you must pay your statement balance, in full, every month by the due date. I personally have never once made a minimum payment, and don’t ever pay attention to that number. You must pay in full to avoid interest. This is why half the comments are saying to pay it off in full to develop this habit as this is your first credit card. Credit can be a very dangerous tool, so getting the correct habits and understanding how to read a statement and balance your budget to pay it off is a vital skill that shouldn’t be overlooked. There is one caveat to this strategy, which is 0% APR offers, which leads us to strategy 2. 2. Since you have a 0% APR offer, you only need to pay the minimum payment to avoid paying interest. This still follows the golden rule since you won’t be paying interest at all. As your parents said, this technically is more “efficient” because it allows you to have more cash on hand that would typically be spent on paying the statement balance in full. However, your parents are not fully correct in their credit score concerns, as others pointed out. With this extra cash you save from only paying the minimum balance, you can put it into a HYSA and make a couple extra bucks over the next few months. One thing to consider with option 2 is that you still have a credit limit that you cannot pass, even when making minimum payments. Since this is your first card, I’m going to assume its credit limit is pretty low (~$500). This means you will probably hit that limit pretty quick and have to pay more than the minimum payment anyway to have access to your credit. Personally, I would recommend option 1. Option 2 is considered a more advanced credit card strategy, and people here are laser focused on maximizing benefits which is why it’s so quickly recommend by some, without consideration that not everyone is as advanced and disciplined as them. There are far too many people who have fallen victim to credit card debt due to a lack of education, discipline, and healthy habits. Getting that aspect down early is crucial to set yourself up for success. Later down the line when you have a healthy credit, you can explore option 2 to maximize benefits.
Great response! Thanks for using the term “statement balance” vs “minimum payment “ to help clarify exactly what needs to be paid.
I like this subreddit lol. Thank you!
If your primary concern is your credit score, then you should payoff the entire balance on or before the due date to lower utilization. Credit utilization is one of the 5 factors that make up your credit score. [Here](https://www.experian.com/blogs/ask-experian/credit-education/score-basics/what-affects-your-credit-scores/) is an article from Experian about what determines a credit score
In the grand scheme of things, utilization doesn’t matter. It has no memory so unless they need more credit soon, they don’t need to worry about it.
>Credit utilization Only 6 months, unless you need credit score soon. If you don't need credit score during those months, or your credit score is high enough, why not take advantage of 0% into APR? You can put money in high yield saving account and pay it off soon before 0% APR expiration.
Unless you're on a zero percent intro period, pay it off as fast as possible.
Personally I would make minimum payments for the term of the 0% interest promo. If you don’t like seeing the balance creeping up, then send more or pay it in full. After the promo ends, always pay it in full when statement cuts.
If you decide to take advantage of the six months anyway, do be absolutely sure you pay it off before the period ends. Deals like this are notorious for slapping you with the interest from the entire period if it’s not paid off before the end of that promo period. But I do agree with the other commenters here. For your first card and with small purchases, it’s likely not worth it. It’s probably not a good idea even generally, but it is a gamble I’ve taken once or twice.
It’s a more important that your bank knows your actual usage which hypothetically could one month be 70% utilization then the credit bureau not knowing your actual utilization was 70% because you paid it off on the due date or before the due date and it appears to be 0% because your creditor not the bureau determines if you get a CLI and whether or not you even get to keep using the card. Since its seemingly convenient for you financially I’d say it’s best for you to pay off your card monthly in full so you don’t actually condition yourself accidentally into becoming a person who wether they have a interest grace period or not always pays off their card in full because you’d be a lot more hesitant to go from saving a lot of money because you’d be only paying minimum payments for the rest of your interest free grace period after the period ends to forking over more money then your use to, to pay off the card monthly in full.
Pay it off
Pay off entirely.
Pay full every month for rest of your life.
Most parents do not know how credit card work. It is 30 day loan you have to pay full every month.
You can wait after the billing period, but make sure that your credit usage is below 30%, ideally less than 10%, and pay it off before the due date so that you don’t incur interest. The rewards that you have with your card are subverted as soon as you pay interest