Paying Cards Off Doesn't Mean Reported Balances Are Zero

Personal finance columnist Liz Pulliam Weston saw Rebekah’s story yesterday, “Is It OK To Use Credit Cards For Everything, If You Pay Them Off Every Month?” and wanted to clarify something important. If you pay off the cards in full, the balances reported to the credit bureaus will not be zero. More likely, it will be the balance from your last statement. Liz writes:

The biggest problem created by reward chasing (which I do, by the way, and heartily endorse) is that you can wind up hurting your credit scores if you chew up a big chunk of your credit limit–even if you play the game right, by paying balances off in full. I try not to use more than 30% of any card’s limit (the lower the better; under 10% is ideal). If your issuer won’t raise your limit, you can make two payments: one a few days before the statement closes, to reduce the balance reported to the credit bureaus, and another right before the due date to pay off any remaining charges.

PREVIOUSLY: Is It OK To Use Credit Cards For Everything, If You Pay Them Off Every Month? (Photo: crazyBobcat)