CHARLOTTE, N.C. — Many consumers don't pay their entire credit card bill each month because they think carrying a balance will help their credit score. That's right, a lot of people who could afford to pay off their card actually keep a balance on purpose.
"I heard that you keep a balance on it so it's revolving and that helps your credit score," credit cardholder Ursula Douglas said.
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"I would more so lean towards keeping a little bit of a balance just because that shows you can pay it on time," credit cardholder Hannah Bradshaw said.
But that's wrong. It's also a more common myth than you may think. Creditcards.com just studied the issue. It found 22 percent of cardholders believe that. One spokesperson said it's the "cockroach of finance myths: impossible to kill."
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Greg McBride is with Creditcards.com's sister company, Bankrate.com. He said keeping a balance can actually hurt your credit score.
"If you're paying the balance in full at the end of the month, that's the type of behavior on which sound credit scores are built," McBride told Action 9.
Plus, keeping a balance racks up more interest, so pay on time if you can.
Cox Media Group
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