Does Carrying a Credit Card Balance Build Credit?

 Money Girl has the scoop on making wise credit decisions

Laura Adams, MBA
1-minute read


Q. Is it better to pay off your credit card balance in full each month or leave a balance in order to build credit?

A. It's far better to pay off your credit card in full each month.

While it's a fact that you have to use credit to build credit, carrying a credit card balance from month-to-month doesn't increase your credit score -- it just increases the amount of interest you have to pay! The best way to build credit is to pay bills on time, charge no more than 30% of your available limit on credit cards, have a mix of credit types (credit cards and installment loans), and accumulate a long credit history. 

Credit Cards image courtesy of Shutterstock

About the Author

Laura Adams, MBA

Laura Adams received an MBA from the University of Florida. She's an award-winning personal finance author, speaker, and consumer advocate who is a frequent, trusted source for the national media. Money-Smart Solopreneur: A Personal Finance System for Freelancers, Entrepreneurs, and Side-Hustlers is her newest title. Laura's previous book, Debt-Free Blueprint: How to Get Out of Debt and Build a Financial Life You Love, was an Amazon #1 New Release. Do you have a money question? Call the Money Girl listener line at 302-364-0308. Your question could be featured on the show.