Paying Off Credit Cards

[squeak9798 5,000+ posts]

Still questionable IMO.
I built my credit on revolving credit without paying interest...

That's obviously the ideal situation.

Though it's typically hard to establish installment tradelines without paying some interest......though of course there are ways to minimize the interest expense paid.

 

[Flipx99 5,000+ posts]

They say pay more than the minimal like if 50 is wanted pay 90 and that way the interest wont build.

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It depends on the TYPE of debt...revolving, installment, etc.

You can build credit on revolving debt without interest. Revolving is like a credit card.

Building credit on an installment loan, like a car, without paying interest is more difficult. If you are attempting to build credit on a car loan, then paying over time is beneficial. I did not chose this route, because it is expensive in terms of interest.

If you are a person trying to rebuild credit, I suppose this is a good choice. I am not sure what people with bad credit do to fix it.

 

[Flipx99 5,000+ posts]

That's obviously the ideal situation.
Though it's typically hard to establish installment tradelines without paying some interest......though of course there are ways to minimize the interest expense paid.

It's hard for me as a person who studies finance everyday to relate to people who don't live their lives that way.

 

[squeak9798 5,000+ posts]

They say pay more than the minimal like if 50 is wanted pay 90 and that way the interest wont build.

Depends on the type of debt we're discussing.

Paying your credit card in full each month won't cost you anything.

Paying extra on other types of debt, credit cards that carry a balance or installment loans....the interest will still accrue, but you'll save interest by reducing the balance more quickly.

 

[Chevillac 5,000+ posts]

They say pay more than the minimal like if 50 is wanted pay 90 and that way the interest wont build.

wat

 

[duece212 5,000+ posts]

//content.invisioncic.com/y282845/emoticons/confused.gif.e820e0216602db4765798ac39d28caa9.gif
It depends on the TYPE of debt...revolving, installment, etc.

You can build credit on revolving debt without interest. Revolving is like a credit card.

Building credit on an installment loan, like a car, without paying interest is more difficult. If you are attempting to build credit on a car loan, then paying over time is beneficial. I did not chose this route, because it is expensive in terms of interest.

If you are a person trying to rebuild credit, I suppose this is a good choice. I am not sure what people with bad credit do to fix it.

I was a fuckup when I was younger, the fastest way I rebuilt credit was of course starting to pay everything on time, and second opening a credit card with a clean history. Didn't need to keep a balance on it, just have it open...no need to pay interest.

Most times a credit card, even unused will have a bigger impact on fico than an installment loan. Of course there are different fico models, such as auto enhanced that take installment history into account at a greater level.

What it boiled down to for me was paying everything off, getting debt free, and worrying about credit scores last

 

[Flipx99 5,000+ posts]

Depends on the type of debt we're discussing.
Paying your credit card in full each month won't cost you anything.

Paying extra on other types of debt, credit cards that carry a balance or installment loans....the interest will still accrue, but you'll save interest by reducing the balance more quickly.

I think the idea is to not accelerate payments on installment loans in order to build credit. What I do not know is by what degree. I pay twice my bi-weekly house payment. I am sure this doesn't do much for my credit score, but if I pay off my house, I won't need a credit score.

 

[bigbangtheory 5,000+ posts]

Meh, I would pay them off....................but I know how it is hard to just give in to paying down 7500 worth of credit.

I would still do it.

If I didn't have other shit on my plate, I would be doing this as well, although we are not that much in debt.

 

[blazeplacid 10+ year member]

*please remember everyone on here is an expert*