credit cards

Fact No. 6: Card balances can be tricky

8 little-known facts about your credit card
Card balances can be tricky

Some cards have no spending limit, but they may limit the amount you can carry from one month to the next, says Chi Chi Wu, staff attorney with the National Consumer Law Center.

If so, you're required to pay the amount that's greater than the "revolving" limit with your next payment, she says.

For example, charging $7,500 on a no-limit credit card may sound great in theory. But if the maximum you're allowed to carry month-to-month is $5,000, you're on the hook for $2,500, she says. Wu recommends doing the math before you charge.

So what if you never carry a balance? That might not be what your credit report is telling lenders, says John Ulzheimer, president of consumer education at SmartCredit.com.

Often the balance recorded on your credit report is the one listed on your monthly statement, he says. What your report may not show is whether you carry a balance or pay in full.

The trick to maintaining a zero balance on your credit report is to pay the bill in full before the statement date rather than the due date, he says.

The potential boost to your credit score?

"It's colossal," says Ulzheimer. "We're talking about the second most important category in (calculating) the FICO score."

 

advertisement

Editorial Disclaimer: The editorial content is not provided or commissioned by the credit card issuers. Opinions expressed here are author’s alone, not those of the credit card issuers, and have not been reviewed, approved or otherwise endorsed by the credit card issuers.

Show Bankrate's community sharing policy
          Connect with us
Product Rate Change Last week
Balance Transfer Cards 16.37% --0.00 16.37%
Cash Back Cards 16.70% --0.00 16.70%
Low Interest Cards 12.02% --0.00 12.02%
 
Search
advertisement
advertisement
advertisement

Credit Card Blog

Mike Cetera

Post-Brexit, here’s how to pay in the UK

How can you best be sure you're taking full advantage of Brexit-influenced pricing? Use your credit card.  ... Read more


Connect with us