Some bad intel is flying around out there. Last week, two friends told me, “I know it’s good for your credit score to owe some money on your credit card.” They might as well have told me, “When you buy a car, make sure you pay for undercoating.” Nah baby, nah.
Let’s address that myth. In the chain-link fenced park where credit scores live, FICO is the big dog. There are other credit scores, but FICO is the authority. As you can see in the FICO graphic, 30% of your credit score is based upon how much you owe. If you owe money on your credit card, not only will you get charged interest, but you will also pull down your credit score. So pay that sucker off in full every month!
If you aren’t in the position to pay off what you owe, consider getting a 0% Balance Transfer card. Right now, Chase Slate is offering 0% for 15 months. No transfer fee. No annual fee. Click on Chip’s Favorite Credit Card Offers for up-to-date deals, terms, and conditions on this card and more.
You can save a significant amount of cash. If you owe $5,000 on your 15% interest credit card, then transfer that balance to the Chase Slate. You will save $600 in interest the first year.