While creditors make money when you carry a balance, lenders who view your credit report don't like to see you paying just the minimums.
"It suggests you're under financial stress," says Nessa Feddis, vice president and senior counsel for the American Bankers Association. "You may be defaulting," she says.
Paying minimums once in a while doesn't necessarily signal a problem, she says. For instance, paying minimums in January, after holiday spending. Or paying minimums one month as you wait for your annual bonus to arrive.
But consistently paying minimums month after month signals that you can't pay off the full balance, and your current and future lenders will see that as a giant red "stop" sign when it comes to granting additional credit.