June 21st, 2012

Should You Pay Off Your Credit Card in Full Every Month?

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In this Credit Karma FAQ video, Bethy and Ezra tackle one of the most popular questions in the Credit Advice Center: Is it better to pay off a credit card every month or make payments toward the balance every month? Do you know the answer? Watch the video to see our take!

The Verdict:

Some people think that keeping a balance on your credit card from month to month will help your credit score… but it won’t. You’ll just end up paying more interest. You don’t need a balance at the end of the month to improve your credit health.

According to Credit Karma’s latest data, the average consumer has about $1,000 of debt per credit card. At the average APR of around 15%, you’re looking at about $150 per year… just in interest! Paying off your credit cards on time will build a positive credit history and paying them in full will save you money.

Remember… the important thing is having a card in good standing. And making a few purchases a month will keep it active and help you build credit. But you don’t need to carry a balance to do that.

Since the main purpose of good credit is to save you money, if you’re spending to improve your credit health, it’s just counterproductive. So avoid carrying a balance and you can have all the benefits of having a credit card without ever having to pay interest.

Check out our other FAQ videos:

How Do I Improve My Poor Credit?
What Is a Good Credit Score? Part 1
What Is a Good Credit Score? Part 2


  1. Hi, My credit score was “776″ 1 month ago. Your site offered a credit card to me and stated thet my score would not go down if I took the offer. Well 1 month later my score dropped 80 POINTS! I have not been late on any payments so what happened to my score? How could it drop 80 points in a month? Did this happen because I got the credit card? What just happened?

    Thank You,


    JOSEPH at 11:41 am on June 25, 2012
  2. There are some credit card offers on our site that send you to a search engine to help see if you pre-qualify for a card. This search does NOT affect your credit score. However, if you apply for one of the cards, it will initiate a hard inquiry (just like other credit card applications), which will ding your credit score a few points. However, it’s unlikely that this one action dropped your credit score by 80 points. There are a number of factors that go into your score calculation, so you should check your credit report card (https://www.creditkarma.com/report) and you credit notifications (in your score center: https://www.creditkarma.com/score) to see what else may be causing this drop.

    We also encourage you to use the Credit Advice Center (http://www.creditkarma.com/all/advice) for questions about credit.

    bethy at 1:55 pm on June 26, 2012

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