June 21st, 2012

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

5 Comments | Twitter | |


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

Disclaimer: All information posted to this site was accurate at the time of its initial publication. Efforts have been made to keep the content up to date and accurate. However, Credit Karma does not make any guarantees about the accuracy or completeness of the information provided. For complete details of any products mentioned, visit bank or issuer website.


  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
  3. Why does your credit card utilization chart say people with 0% utilization have lower average credit scores than poeple with utilization rate of 1-20% and 21-40% ?

    Isn’t this video and the chart contradictory?

    sai at 6:12 pm on April 23, 2014
  4. Mike

    Thanks for the question, Sai. You don’t actually need to carry a credit card balance over from month to month or pay interest in order to register credit card utilization. Simply using your card will be enough to register, even if you pay your bill off more quickly. You can read more about this here: https://www.creditkarma.com/article/credit-card-utilization

    Mike at 2:18 pm on April 24, 2014

Enter your comment