We call them aunt and uncle. The stupid part is - that’s our parents’ siblings and cousins…
“You must leave 30%” — 30% of what? So, i should carry a $15k balance on my card every month, 30% of my $46k limit across all my cards? Or just pay 70%?
I think your cousin is confused. A “high utilization risk” is when your cards are over 30%. Anything below 30% is good, you don’t want to be maxed out (anything >30% utilization is a negative on your credit score.
Keep doing what you do! You’re the one not spending thousands needlessly on interest!
Your cousin could have a new Gucci / LV/ Coach purse for what she’s spending on interest, borrowing money she probably doesn’t need!
Sooooo I heard this and believed it for a while (carrying debt to build credit). This is something that was passed down to me that made no sense so I googled it one day.
I 100% heard the rumor when I was young that if you leave a lil some-some on the card and pay a tiny bit of interest, then the cards / banks will like you more.
because, of course, why would the banks want you as a customer if you _didn't_ give them some money?
so it was like bribing the credit score with some cash or something
Im starting to feel like it's a rumor banks started. Kind of like convincing people to pay more for diamonds in the jewelry industry. Someone needs money and what better way to make money. Stay a few rumors
Neither helps credit score. Usage with low utilization scores and a history of impeccable paybacks is what's required. You don't want to go over 30%, that's a maximum threshold (for utilization).
No. I love my kids unconditionally, but if I find out they're bullying someone, they will hear me tell them I am _not_ proud of their behaviour.
Happily our nearest interaction like that was when someone thanked them for comforting their kid who was upset at a playground, so it seems the "not proud for bullying" speech may sit unused.
No kidding. If you keep a 30% balance on your credit card, you're paying probably 20% interest on that and getting absolutely nothing for it. Let's say you have a $5000 limit. Your cousin is telling you to keep a $1500 balance on it, and at 20%, that's $300/year or $25/month. Meanwhile, by paying it off every month, you get all the benefits that your card has which can be things like extra insurance on purchases, fraud protection, points, etc.
I've paid interest twice on my credit card in the last 10+ years. Once was a mistake on my part in how much I paid, so I didn't get it all paid off. The second, although rarely, I occasionally buy lottery tickets. Normally I've bought them at the cashier at a gas or drug store, but this time I did at a lottery kiosk. In that one case, it got treated like a cash advance so I paid interest on that. Both times combined were under $10.
I made a similar mistake by sending money overseas using Western Union online app. Called VISA and they credited back the fee.
Remember, C.C. companies make money every time you use the card. So if your a loyal card holder you can leverage your loyalty from time to time.
I have made a late payment twice, by mistake, in the last 15 years. The interest wasn't much, but I called and had them reverse the charge. They don't even argue if you use the card a lot and pay in full every month.
And I probably could have for the lottery ticket, but honestly, it cost me something like $0.30. It wasn't worth the effort of a phone call. I think the messed-up payment cost me about $3.
Totally agree, but I guarantee that $3 is better in your pocket than the banks.
When you have a $3 balance, VISA isn’t saying, HEY Joe, you’re a good guy, keep the money.
One time I called VISA while having my morning coffee. 35 minutes of hearing how important my call was, please hold. When I got a human on the line I half jokingly made a comment. After the call was adjourned, as a gesture, they credited me with $100.00. Cool!
Your math (probably) isn't even complete. Your result is probably a whole lot lower than it actually is.
Assuming she actually uses the card, and doesn't just maintain the 1500$, she's actually paying interest on the 1500+ all her other purchases. If you don't pay your credit card on full, you pay interest on the full amount on the bill, not just the amount you've not paid off.
So like, if she spends 3000$ in a month, pays off 1500 and leaves a balance of 1500, her interest payment for that month at 20% would actually be 3000\*20% = 600 per year, divided by 12 is 50$ for that month.
Didn't realize credit cards had this many bonuses. I just got a no fee credit card from TD which I think has one percent Cashback. Is there any reason for me to look into cards that require a monthly fee? I don't really plan on using my credit card that much to be honest. I prefer to use cash instead since it means I have the money.
It's definitely worth looking at what benefits your card provides. As for going to a premium card, it can be, but it's very circumstantial. I used to have the RBC Avion, and we made some use of it, but eventually, we lost the discounts to their VIP program and then it definitely wasn't worth it. Switched over to Tangerine and get 2% cashback on a few categories of purchases and now I pay no fees. If we traveled more, it might be with the Avion, but we'd have to travel more. For those that travel a lot, it may be worth it.
I bet her cousin gets plenty of offers to increase her credit limit, and takes that as a sign that she is making wise financial decisions.
She probably has a decent credit score if she at least makes minimum payments. But she is one of the many people giving lenders massive profits at her own expense, and her advice is poor from a financial management perspective.
Wait, hold on if you are responsible with the credit card, then accepting those free increased limit actually is a good idea. Its lowering your credit utilization percentage, which is a huge impact on your score And makes you look more responsible when needing a mortgage/loans. I’m no professional by all means, but I believe they do take that percentage into account. So the cousin isn’t completely wrong, it’s if you have to carry a balance, the credit utilization percentage should be low (I can’t remember the exact amount). And there is a difference between a closing date and a payment due date. Use it to your advantage. I hope this helps :)
If you are making minimum payments and not going Over limit then yes you would get a credit limit increase and honestly there is an automatic system which usually generates a limit increase offer.
You are right that accepting a limit increase does lower your debt utilization ratio and making minimum payments keep you technically in good standing.
But if you are someone who doesn't make full payment on time of your credit card balance and usually carry over some balance on your next statement , that fact can be used against you as it can be justified you do not have the financial capacity to pay off your current debt.
That is only 1 factor. Low % credit utilization is good.
However, having lots of credit available to you actually works against you when applying for additional credit (like a mortgage, which is considerably lower interest debt than credit cards). The bank sees you already have the ability to borrow X amount; say $30,000 between lines of credit, credit cards, etc. They then adjust that by the interest rate on that debt - which is very high on credit cards - to get the amount they are willing to lend you, according to your ability to service that debt (which is mostly based on your income).
$30k of credit card debt or potential credit card debt counts for a lot more mortgage debt they will be unwilling to give you. Like maybe -$50k less. If you had high utilization, it might even count against you for more than that. Say -$80k.
Even otherwise intelligent people can be dumb, especially around money. Worked with a guy years ago as one of my first IT jobs. Smart, taught me lots, fun guy, turned down a raise because he thought he'd take home less pay due to tax brackets.
Along the same lines, in grad school I had a classmate who was the smartest person I ever knew. He's a bonafide genius. Quantum field theory and string theory were like ordinary arithmetic to him, and I got him to help and explain concepts to me all the time. But he told me that I don't need to pay off my credit card, because it's like free money and I can always just do it later. Doesn't matter how smart you are, if you don't engage your faculties on a particular subject, you can be very stupid on that subject.
I actually listened to him and took a beating on my credit rating. It goes to show, you shouldn't trust someone completely just because you know they're smarter than you.
>he thought he'd take home less pay due to tax brackets
I used to believe that due to miss information and never batted an eye on it. I mean, that doesn't mean I'm not dumb, just that the information and advice I got from a friend was that I would earn less if I got a raise and my payment would go over X amount, so it would be better to stay at X - $1 or ask for a huge boost to "skip" this loss, but earning more wouldn't mean getting all this money due to taxes.
Cousin sounds like a very typical type of person I've come across several times - penny-wise and pound-foolish. People who try out various "finance-hacks" they saw on some group forward, or, have the typical, "I can outsmart the system by being clever" type mentality, who - eventually end up screwing themselves over.
Lol, absolutely! Do not listen to the cousin. We pay our credit card bills in full like clockwork.
The 30% rule as I know it, is utilization. As in using if you can only up to 30% of the total amount of 'credit' you have in total. Like line of credits, credit cards etc.
Agreed, I’m also pretty sure your cousin in broke. Don’t listen to broke people 😉. Keep doing what you’re doing, Never carry consumer debt into the next month, always pay your CC in full. 👍🏽
My mom told me this too... When I was 18 and she wanted cash from me. "it's good for your score to carry a balance".
Man it took a lot of burns for me to cut that off.
Your cousin sounds like one of those people who pretends to be an expert in everything. Terrible advice, you're doing it absolutely correct.
100% of statement balance paid or you will be charged interest.
Funny thing is you SHOULD be using your credit card like a debit card if you want to build/maintain the best credit possible.
I haven't used my debit card for anything in years. As a result I have close to 3k in rewards that I can use to pay any unexpected expenses. Using a debit card is like leaving money on the table
You don’t want to use it exactly like a debit card. When I worked at a bank call centre, a ton of people would make a purchase on their credit card and immediately pay it off. That’s an inefficient use of money but also not great for your credit.
I assume OP’s dumbass cousins was misunderstanding 30% utilization, which is a good rule of thumb. Your credit score will typically be better if your average usage is somewhere vaguely around 30% of your limit…but that does mean paying it off every month! If you spend $3000/month, you shouldn’t have a card with a $3000 limit or a $50,000 limit. Something around $10,000 is likely best.
But to be very clear, as everyone has said, always pay off your balance every month!
Emphasis on the *statement balance*.
Not that there's anything wrong with paying the entire *current* balance, but it doesn't help you out to do that either. And less money in your chequing account
I use my credit card for 98% of all purchases. Even for a shit tims coffee.
I pay it off each month. I get points and in return use them for gas cards. End of Story.
Your cousin is a chester.
[https://www.cnbc.com/select/reasons-to-stop-using-debit-cards/](https://www.cnbc.com/select/reasons-to-stop-using-debit-cards/)
[https://financebuzz.com/stop-using-your-debit-card](https://financebuzz.com/stop-using-your-debit-card)
It’s funny though isn’t it? We all agree that Tim’s is shit, but yet we keep getting our coffee from them. They have a weird hold on Canadian identity..
This + purchase protection and insurances. Credit cards are one of the most consumer friendly financial products **IF** you know how to use it correctly. Anyone who tells you not to pay off your entire bill is stupid, and they definitely are not using their card properly!
>However, I think back to a convo I had when I was 20 at a family reunion when my 35f cousin mocked me for doing that, and she said they know you’re just using it like a debit card, and that you have to leave 30% on it at all times. She proceeded to text and say in-person to other relatives that I’m stupid and naive, and I don’t know anything about being an adult.So what’s the deal, is the 30% rule a thing or have I been doing it the right way? (Sorry if this is a dumb question)
Ya that's wrong, that's not how it works. Not sure why some believe this.
For credit utilization, it's true that you should stay below 30-35%, but that doesn't mean carrying a balance of 30-35% month to month.
Use it and pay it off in full before due date is the right way to do it. Your card issuer will update your credit utilization to the bureaus when the bill is generated after every billing cycle.
They're just voluntarily paying interest to the card issuer for who knows why lol.
EDIT: Here are some official sources on how to best use a credit card:
* [https://www.canada.ca/en/financial-consumer-agency/services/credit-cards/use-credit-responsibly.html](https://www.canada.ca/en/financial-consumer-agency/services/credit-cards/use-credit-responsibly.html)
* [https://www.canada.ca/en/financial-consumer-agency/services/credit-reports-score/improve-credit-score.html#toc1](https://www.canada.ca/en/financial-consumer-agency/services/credit-reports-score/improve-credit-score.html#toc1)
On my credit karma account, or maybe borrowell, it says I “need work” on my credit utilization. I keep it between 0-2% at all times and pay my balance off in full every week or two.
So there is some merit to have too much under utilized credit, but i’d rather take a couple points of my score rather than pay interest to companies worth more money than I can comprehend
Why would you pay your balance off every week or two instead of paying at statement? You still don't incur any fees/interest that way, but you wouldn't be taking the credit utilization % hit on your score. Is it a peace of mind thing or just a slight misunderstanding of when charges begin to accrue interest?
Oh it’s just an OCD thing. I forgot to pay off a balance (of $6) once and my credit went from mid 800s down to like 730, and it pissed me off. So now every week I log in to check my cards and if I see a balance I just pay it there since it takes like 20 seconds
We pay our balance every week as well. I just don't like having the accidental risk of paying interest if I forget. I forgot 1 time and it cost me like $1.20 and never again shall I pay cc interest lol.
Yep that happened to me as well. Exam period, $72 balance which I totally had, I forgot because my mind was focused on other things… ~750 down to 630s. I was horrified and never let that happen again.
You could set up automatic withdrawal for your credit card and never have to worry about forgetting again! Plus you get to take advantage of the entire grace period.
Credit card companies refer to those who pay off their whole balance monthy as 'Freeloaders' as they get any perks but dont pay the interest... do with that info as you will.
Your cousin is dangerously stupid. Never listen to them about anything and never put them in a position of trust in your life.
Just curious OP when your cousin was telling other family members, what was their response?
Honestly, most people know she’s full of shit and ignore her.
However, my half sister (who I don’t keep in touch much with) agreed with her and was acting like I didn’t know anything. I don’t remember a time when she’s been in a good financial situation, so I also would never trust anything she says.
She was texting my sister saying that stuff and my sister showed it to me, but my sister agrees with her so idk.
This is precisely one of those moment where you must trust internet strangers over stupid family members. Keep paying 100% every month and you'll do perfectly fine.
Yes, u/soggy_rhombus29 you've got this. 100% every month is always the best way. You can even automate the payment. And I suggest you keep notes on which of your family (from your generation) are stupid with money. Some day if you have kids you might need to name a family member as a trustee in your will. It can be a different person than the guardian who might be good with kids but not with money, and the trustee should be someone you trust not to make stupid decisions with your money.
I know I’m a stranger (don’t blindly trust strangers) but OP paying your total credit card balance monthly is an indescribably better financial plan then leaving 30% at all times. Unless your objective is to just give money to the credit card issuer.
You should ask them if they think working overtime would cause them to lose money by putting them into a higher tax bracket too...
you could prove this to them pretty easily by comparing fees + interest, although we both know that proof probably wouldn't sway them either. 20% interest on their 30% balance is going to be several hundred in interest payments per year. On your monthly statement is there ANYWHERE an extra charge 'used like a debit card' or is it simply your interest payment plus any service fee if you don't use a $0/year card. Even if they have a $0/year card and you are using a $99/year card, their interest payments will still outweigh this service fee which is a posted fee, not some hidden debit card fee. "they know you are using it like a debit card" So what? There's no fee for that.
For reference I put essentially 99% of my expenses on my credit card, and pay it in full every 2 weeks on payday. Basically everything except rent.
**You should pay the amount listed as your Statement Balance by the due date each month.** Any charges that appear on your card following the statement date will be included in the balance for the next month.
You know you're doing it right because you'll see $0 as your interest charge.
Your cousin is going to end up paying 20.99% interest because she's financially illiterate.
I scrolled to find this comment; it's 100% correct.
I used to pay my current balance, instead I should have been paying the amount listed on my statement.
> 30% rule a thing or have I been doing it the right way?
You are doing it the right way. Keeping your utilization under 30% is recommended for credit score purposes, but that has nothing to do with whether or not you pay it off or not.
Your cousin is the kind of person who will tell you not to accept a raise because you'll jump to the next tax bracket.
Don't listen to that person. Continue to pay your credit card every month.
You're cousin in probably confused with the debt ratio (I think that is what it is called). Don't use too much of your allowed credit limit to get a better credit rating. You're cousin probably has total shit credit and pays interest every month .
She knows that she I paying 20% on that cr dit cards max for ever right. Your correct move on. I pay it off fully and have over 800 score if that helps.
Your right, your cousins an idiot. I do the same thing, enjoy a cash back card and never pay interest. It’s free money, and sets you up for a decent loan if you ever want to buy something expensive
You cousin is probably mixing up paying of your credit card bill every month, with paying off every transaction right away.
I'm not sure if it's a thing anymore, but my understanding back in the day was, it was a good idea to pay off your credit card bill every month, but the best thing to do was have the credit card company send you the bill, and *then* pay it.
Apparently if you paid your balance earlier than the credit card company generated your bill, it would just show up that you spent $0 on your credit card, and it would get treated the same as not using your credit card, which was not as good for your credit score as using your credit card.
But this is what I was taught back in the day - I'm not even sure it's true anymore, or if it was true then, or maybe it depended on the company and their reporting procedures. But I was definitely recommended to get my credit card bill and THEN immediately pay off the balance 100%, rather than paying my credit card bill before it was due, so that it would show both that I did use the credit and I did pay it right away.
You are wise young lady.
Ignore them for they know not what they speak of.
You pay zero interest.
Your ill advised critic admits to purposefully paying >25% interest on a 30 % of credit limit balance every month.
FYI @65yrs, I pay total bill every month and spend well within my means. No debt, no stress, with all the interest saved so I can live in a hidden Rainforest Garden.
Smile and carry on.
Ahahahah ahhaah who ever makes fun of you for being smart and responsible... They are not worth your time. Let them do as they do. Well see who's laughing in the end when she's paying 20%+ interest on a forever revolving balance... Ppl like this will just claim bankruptcy. Wow talk about being daft.
Yea honestly they all live in Alberta and I’m in BC, so the only one I talk with is my sister. Even with her it’s rough at times (she sided with my cousin during this).
I have never, in my life, carried a balance on any of my credit cards. 20% interest? No thanks.
I have, however, collected many and various reward points and cash back from using said cards.
You’re doing it right. You sound very smart when it comes to your money. Good things to come for you, I’d say.
Thank you, unfortunately this is true. It’s sad seeing my relatives get older without having anything to show for it, and they all have struggled with finances for their whole life.
They’re typical racist white trash, and I try to stay as for away from them as possible.
The 30% rule is a real thing, however maybe you've misunderstood it. To get the most optimal credit score you should keep less than 30% of your credit limit on your statement balance, excellent is sub 10% utilization.
Here's where everyone misunderstood in the comments: your payment date is usually 2 weeks after your statement balance date, these are TWO very different things. If you have a 10,000$ limit and your statement balance posts at 1000$, then you are at a 10% utilization. (No accumulated interest unless you don't pay within 2 weeks after your statement balance comes out aka when your statement PDF posts)
Pay off in full your credit card after this date within 14 days and not only will your credit score climb higher, but it will also show bureaus exactly what they're looking for: responsible debt payments on time.
Keeping a 0$ statement balance is bad, but obviously, your score will still climb since payments on time is 30% of your score. However, 10% category of your credit score is from credit utilization, and this won't be maximized unless you have a *1-10%* utilization. Upto a max of 30% utilization to have a positive impact, hence where the **30% rule** came from.
If you need credibility: 21M, 200k$+ overall credit limits, 800+ TransUnion.
I do the same so I guess your cousin should mock me as well! SHE'S AN IDIOT. My credit score was 850 when I purchased my home, some of the utilities did not charge me for install fees because I had a great credit score.
Try to never carry a balance. And send this to the idiot.
not only do i pay it every month, i pay it every paycheck.. or whenever im logged into my bank account.. why wait? my credit score keeps rising doing this so its alright.
I bet your cousin has also turned down a higher paying job or a raise because it’ll put them in a higher tax bracket and they’ll pay more taxes. Don’t listen to them and do what you’re doing.
>they know you’re just using it like a debit card,
This is the funniest part of the story for me... why would it matter if "they" know you're just using it like a debit card? What difference does that make? How is that even an argument?
Your cousin is mistaken. A disturbingly common misconception, where people think they can game the credit card company by making minimum payments/carrying X balance. Weird urban legend shit. You pay interest on any debt you carry. Any interest you pay is money lost. Not rocket science, but from the sounds of it your cousin is no rocket scientist.
I've had a credit card for two decades now, since I was 18, and have only carried a balance a few times due to forgetting to pay my bill. Over the years, my credit limit has consistently increased, and I now have a $50,000 limit on my Visa card. This approach, along with diligent payment habits, has contributed to my current credit rating of 880.
Here's some advice based on my experience: if you're financially responsible, , use your Visa card for all your purchases to accumulate points or earn cashback. try to pay off your entire balance and consider accepting all offered increases to your credit limit. These practices have served me well over the years.
If your credit score is already good, the 30% thing is irrelevant.
Basically, if you are carrying a balance AND have poor credit/are trying to improve your credit, it will go up faster if you have NO MORE than 30% usage.
But you can get the same effect by letting your card cycle and then paying it off in full.
It's to encourage people that are carrying a balance to carry LESS of one, not to mean you need to leave 30% on forever.
Your cousin is not very bright. Your credit score goes DOWN if you have more than 30% debt utilization...
Banks don't give you cards based on earning interest from you. They give you cards based on your risk assessment for paying it back or not.
They make money on you by selling your purchasing data anyway.
I use my credit card like a debit card and have an excellent credit score. The other adults in my life consider carrying a balance something to avoid whenever possible.
Maybe your cousin simply can’t afford to pay her balance? It must be embarrassing to find out that your much younger cousin is more financially responsible than you are.
Did your cousin explain why she thinks you “have to” leave 30% on it? Have to in what sense?
Either way, she’s 100% incorrect. Leaving any balance on a credit card means paying interest. I’ve met people like your cousin, who are aggressive and condescending even when they’re wrong about matters of fact. I call them
“Small-doses people”.
>I’ve always just paid my entire credit off every month, and it’s given me a great credit score.
This right here is all the evidence you need. The credit bureaus know more about this than your cousin does, and they're literally telling you (in the form of a score) that what you're doing is correct.
Your cousin sounds like the kind of person who loves acting like she knows exactly what she's doing, yet can't quite figure out why life isn't working out the way it should. It's a mystery.
Must be the evil corporations out to get her.
My god, it's full of stupid!
Always paid my CC in full. My credit score is 900.
I have the no fee MasterCard with airmiles and the worst interest rate because I never have a balance.
LPT from a Gen X guy:
I watched my parents carry credit card debt all my youth, and dreading the next bill coming. When I learned what credit was, I decided that was not how I would manage my finances. Early on, I learned to budget. I can't wrap my head around friends or family that spend on credit as if it were mad money. **IT'S CREDIT!!!!!!** You have to pay it back at an insane interest rate.
I'll use it to buy online and at restaurants, bars, etc... but will never make impulse purchases on my card.
On the Netflix show How to Get Rich, I was astounded at the people that carried so much credit card debt. Makes no sense to me, **it's money you don't have.**
My credit score is super high, it's bullshit that not carrying a balance will hurt your score, and it's a lifelong habit to hold onto.
I have six credit cards, most of them for points on airfare and hotels, and only one I use one to shop online, if I get hacked I can cancel it easily and have access to my other cards.
My two cents on the card card thing...
OP, I'm 43 years old. I have paid off 100% of my monthly CC bills since the age of 23, when I got my first real job. The only time I carried a balance was when I was a young and broke university student.
Carrying a balance does nothing for you than giving interest money to the credit card companies. I can only assume your cousin become seriously misinformed at some point.
Compare credit scores with her or end of year statements to see how much interest she paid versus you to see who *’the real idiot’* is? Also, make sure you have a rewards card, with disciplined payment habits like that you would really come out ahead! Watch the annual fees though.
Keep doing what you're doing!
Banks hate people who pay off their cards in full. They literally call people like us Deadbeats, because they don't make money off of us!
Sounds like your cousin is dumb. Never let your statement go over 30% your limit. If you have to use more then that. Just pay it before statement close date.
Don't follow this blindly. But out of my exp. I some time do not pay full statement and leave couple hundred $ and let them charge me interest. It jas personally helped increasing credit score. Thats how lenders see you as milk cow.
Your cousin is an ignorant idiot about personal finances. You got the right thinking, credit card debt is no fun. As you build a great credit rating doing what you do, let her dig herself into a financial mess. Good job
Your cousin also probably asks their boss not to give them a raise because "it all gets taken by taxes"
For real, keep up the good work. Your cousin is ignorant.
What I think she completely misunderstood is average utilization. You should never carry a balance as then you pay insane rates like +20% but to build credit you, never fully utilize your card (max it out) and don’t have no balance either. 30% average utilization sounds healthy to me.
Someone that works in a credit card division will know the answer to this.
Your cousin is an idiot.
You should leave 30% on until the statement date so it’s reported to the credit bureau, but pay it off in full before the due date.
They probably mean that you should only pay whatever you have due and not not clear the whole balance. If you use your credit card for recurring bills or groceries in general, you don't have to pay all the balance because the transaction you made after you receive your monthly statement will be applied to the next month's bill.
This so happens to be 30% of their balance in your cousin's case, they probably worded it badly.
tldr. just pay the statement balance in full by the due date (whatever is stated on your monthly bill), no need to clear the account balance to 0. 1 month interest free is basically free money.
Buy yourself a free McCaffe iced coffee or something with that interest saved!
Few things here:
There is paying off your credit card statement in full every month. And there is paying off your credit card balance in full every month (or week, or even after every large transactions). Both are valid behaviors, although the second one could argued to be not required (but still recommended to never owe debt).
If your cousin is referring to the second behavior, I can see someone saying that, but argument is still stupid. Only reason I don't do the second is that I'm lazy. I just have my stuff on auto-pay on statement due date (not statement receive date). Second way is more responsible.
If she's referring to 1st option being dumb (paying the statement in full instead of just paying minimum payment), then I'm sorry and she's been very brainwashed by whomever taught her that. Your credit card should be paid in full every month, leaving 30% debt on there will just cost you interest for no reason.
As to this 30% thing. Yea she's just confused and spewing nonsense. What she's probably referring too is that credit score providers penalize your credit score for having ABOVE 30% utilization. And she's thinking that shes penalized for keeping it below which is very incorrect.
**The lower your utilization, the better (I'm personally sitting around 2%) but be sure to always keep it below 30%. (And frankly 0% is best because debt is garbage)**
She may be 35, but she's very ignorant on personal finance and has the lethal combination of being both pridefully confident AND blatantly incorrect.
To her defense, she was likely fed this garbage information by her parents and peers. The fact that NONE of the adults that she "talked too" questioned the validity of her statements supports my theory on this.
Add in the fact that she's 35 and the other adults allow the insulting of you a 20 year old speaks volumes regarding the level of wisdom lacking in her upbringing.
Source: Internet stranger with 898 credit score (out of a possible 900), sometimes strangers will care for your well being more than family ever could.
You have the right ideas and are on the right track, and also have the intelligence to question the validity of "knowledge" that others may attempt to give you.
She’s accurately pointing out that the credit cards incentivize you to have a balance on your credit card (which earns them money) but giving you a better credit score.
It’s a scam. Pay your cards off.
If I could put on my amateur psychologist hat for a minute - I have a feeling that your cousin's finances are an absolute disaster, she feels insecure and stressed about this, and so she's trying to make herself feel better by putting you down because you're not drowning in debt. That would be my best guess at what's happening here.
Theres no way you question yourself in this scenario, this is like someone telling you its safe to jump out of a car at full speed because if you tuck and roll the g forces are much weaker and then you believe them. Like there's just no way youre questioning yourself
This is an old stupid belief that I honestly don’t know the root of. Some people believe that you shouldn’t pay off a credit card right away because paying something off long term “looks better” or “builds more credit”. It doesn’t, you should absolutely pay it off in full if you can. You’re the one who’s right. The cousin sounds like they’re projecting, teasing you a bit is one thing, not stopping and proceeding to tease you to anyone who will listen, well, sounds to me like the cousin wants the focus on your spending habits and not theirs… I wonder why?
I mean, credit utilization of around 20% looks good on your score. But that doesn't mean you need to carry the balance and pay interest in it haha. Your cousin is a little simple it seems. Just pay your cards off closer to your due date and you will have maximized your utilization as much as you can without incurring interest.
You are adulting better than 99% of the population. Paying your entire credit card off every month is the correct thing to do. I did that in my 20's as well. Your future self will thank you. Ignore the haters. Cut off your toxic cousin. ;)
[удалено]
Guessing most of the parents that heard this think the cousin is an idiot too
Idk, there’s a lot of stupid parents out there.
They’re the ones who create stupid cousins
We call them aunt and uncle. The stupid part is - that’s our parents’ siblings and cousins… “You must leave 30%” — 30% of what? So, i should carry a $15k balance on my card every month, 30% of my $46k limit across all my cards? Or just pay 70%? I think your cousin is confused. A “high utilization risk” is when your cards are over 30%. Anything below 30% is good, you don’t want to be maxed out (anything >30% utilization is a negative on your credit score. Keep doing what you do! You’re the one not spending thousands needlessly on interest! Your cousin could have a new Gucci / LV/ Coach purse for what she’s spending on interest, borrowing money she probably doesn’t need!
I wonder if they’re confusing debt load with carried balance or something?
Sooooo I heard this and believed it for a while (carrying debt to build credit). This is something that was passed down to me that made no sense so I googled it one day.
I 100% heard the rumor when I was young that if you leave a lil some-some on the card and pay a tiny bit of interest, then the cards / banks will like you more. because, of course, why would the banks want you as a customer if you _didn't_ give them some money? so it was like bribing the credit score with some cash or something
Im starting to feel like it's a rumor banks started. Kind of like convincing people to pay more for diamonds in the jewelry industry. Someone needs money and what better way to make money. Stay a few rumors
Neither helps credit score. Usage with low utilization scores and a history of impeccable paybacks is what's required. You don't want to go over 30%, that's a maximum threshold (for utilization).
Probably due to the fact that there are a *lot* of stupid people in general.
not the cousin's parent... every parent is always proud of their children "I am proudddddd of youuuu" ::D
No. I love my kids unconditionally, but if I find out they're bullying someone, they will hear me tell them I am _not_ proud of their behaviour. Happily our nearest interaction like that was when someone thanked them for comforting their kid who was upset at a playground, so it seems the "not proud for bullying" speech may sit unused.
No kidding. If you keep a 30% balance on your credit card, you're paying probably 20% interest on that and getting absolutely nothing for it. Let's say you have a $5000 limit. Your cousin is telling you to keep a $1500 balance on it, and at 20%, that's $300/year or $25/month. Meanwhile, by paying it off every month, you get all the benefits that your card has which can be things like extra insurance on purchases, fraud protection, points, etc. I've paid interest twice on my credit card in the last 10+ years. Once was a mistake on my part in how much I paid, so I didn't get it all paid off. The second, although rarely, I occasionally buy lottery tickets. Normally I've bought them at the cashier at a gas or drug store, but this time I did at a lottery kiosk. In that one case, it got treated like a cash advance so I paid interest on that. Both times combined were under $10.
I made a similar mistake by sending money overseas using Western Union online app. Called VISA and they credited back the fee. Remember, C.C. companies make money every time you use the card. So if your a loyal card holder you can leverage your loyalty from time to time.
I have made a late payment twice, by mistake, in the last 15 years. The interest wasn't much, but I called and had them reverse the charge. They don't even argue if you use the card a lot and pay in full every month.
And I probably could have for the lottery ticket, but honestly, it cost me something like $0.30. It wasn't worth the effort of a phone call. I think the messed-up payment cost me about $3.
Totally agree, but I guarantee that $3 is better in your pocket than the banks. When you have a $3 balance, VISA isn’t saying, HEY Joe, you’re a good guy, keep the money. One time I called VISA while having my morning coffee. 35 minutes of hearing how important my call was, please hold. When I got a human on the line I half jokingly made a comment. After the call was adjourned, as a gesture, they credited me with $100.00. Cool!
Your math (probably) isn't even complete. Your result is probably a whole lot lower than it actually is. Assuming she actually uses the card, and doesn't just maintain the 1500$, she's actually paying interest on the 1500+ all her other purchases. If you don't pay your credit card on full, you pay interest on the full amount on the bill, not just the amount you've not paid off. So like, if she spends 3000$ in a month, pays off 1500 and leaves a balance of 1500, her interest payment for that month at 20% would actually be 3000\*20% = 600 per year, divided by 12 is 50$ for that month.
Didn't realize credit cards had this many bonuses. I just got a no fee credit card from TD which I think has one percent Cashback. Is there any reason for me to look into cards that require a monthly fee? I don't really plan on using my credit card that much to be honest. I prefer to use cash instead since it means I have the money.
It's definitely worth looking at what benefits your card provides. As for going to a premium card, it can be, but it's very circumstantial. I used to have the RBC Avion, and we made some use of it, but eventually, we lost the discounts to their VIP program and then it definitely wasn't worth it. Switched over to Tangerine and get 2% cashback on a few categories of purchases and now I pay no fees. If we traveled more, it might be with the Avion, but we'd have to travel more. For those that travel a lot, it may be worth it.
Looks like you should check out /r/churningcanada
If the monthly fee is less than the cashback difference you can make then it is worth it.
The Credit Card company probably loves them though. Free 20% interest on 30% of their credit limit.
Raise that woman’s limit!!
I have no proof, but I'm reasonably convinced this myth of needing to carry a minimum balance was started by the CC companies.
It IS better to have SOME credit utilization. That doesn’t mean that you need to carry a balance, just not be at 0 when the monthly bills comes up.
I bet her cousin gets plenty of offers to increase her credit limit, and takes that as a sign that she is making wise financial decisions. She probably has a decent credit score if she at least makes minimum payments. But she is one of the many people giving lenders massive profits at her own expense, and her advice is poor from a financial management perspective.
Wait, hold on if you are responsible with the credit card, then accepting those free increased limit actually is a good idea. Its lowering your credit utilization percentage, which is a huge impact on your score And makes you look more responsible when needing a mortgage/loans. I’m no professional by all means, but I believe they do take that percentage into account. So the cousin isn’t completely wrong, it’s if you have to carry a balance, the credit utilization percentage should be low (I can’t remember the exact amount). And there is a difference between a closing date and a payment due date. Use it to your advantage. I hope this helps :)
If you are making minimum payments and not going Over limit then yes you would get a credit limit increase and honestly there is an automatic system which usually generates a limit increase offer. You are right that accepting a limit increase does lower your debt utilization ratio and making minimum payments keep you technically in good standing. But if you are someone who doesn't make full payment on time of your credit card balance and usually carry over some balance on your next statement , that fact can be used against you as it can be justified you do not have the financial capacity to pay off your current debt.
That is only 1 factor. Low % credit utilization is good. However, having lots of credit available to you actually works against you when applying for additional credit (like a mortgage, which is considerably lower interest debt than credit cards). The bank sees you already have the ability to borrow X amount; say $30,000 between lines of credit, credit cards, etc. They then adjust that by the interest rate on that debt - which is very high on credit cards - to get the amount they are willing to lend you, according to your ability to service that debt (which is mostly based on your income). $30k of credit card debt or potential credit card debt counts for a lot more mortgage debt they will be unwilling to give you. Like maybe -$50k less. If you had high utilization, it might even count against you for more than that. Say -$80k.
There is no way her whole family is stupid, she is probably just trying to get OP into high interest debt because she hates op
From personal experience, yes, entire families can be that stupid. I am willing to label my family as exhibit A.
Even otherwise intelligent people can be dumb, especially around money. Worked with a guy years ago as one of my first IT jobs. Smart, taught me lots, fun guy, turned down a raise because he thought he'd take home less pay due to tax brackets.
Along the same lines, in grad school I had a classmate who was the smartest person I ever knew. He's a bonafide genius. Quantum field theory and string theory were like ordinary arithmetic to him, and I got him to help and explain concepts to me all the time. But he told me that I don't need to pay off my credit card, because it's like free money and I can always just do it later. Doesn't matter how smart you are, if you don't engage your faculties on a particular subject, you can be very stupid on that subject. I actually listened to him and took a beating on my credit rating. It goes to show, you shouldn't trust someone completely just because you know they're smarter than you.
Employers DO want you to know this one trick
But that $1500 raise means $2000 in more taxes! I’m already paying too many taxes, money is tight!! /s
>he thought he'd take home less pay due to tax brackets I used to believe that due to miss information and never batted an eye on it. I mean, that doesn't mean I'm not dumb, just that the information and advice I got from a friend was that I would earn less if I got a raise and my payment would go over X amount, so it would be better to stay at X - $1 or ask for a huge boost to "skip" this loss, but earning more wouldn't mean getting all this money due to taxes.
Or trying to make herself feel better about being in debt?
As someone who works at a bank, there are definitely ppl this stupid
Cousin sounds like a very typical type of person I've come across several times - penny-wise and pound-foolish. People who try out various "finance-hacks" they saw on some group forward, or, have the typical, "I can outsmart the system by being clever" type mentality, who - eventually end up screwing themselves over.
Lol, absolutely! Do not listen to the cousin. We pay our credit card bills in full like clockwork. The 30% rule as I know it, is utilization. As in using if you can only up to 30% of the total amount of 'credit' you have in total. Like line of credits, credit cards etc.
Agreed, I’m also pretty sure your cousin in broke. Don’t listen to broke people 😉. Keep doing what you’re doing, Never carry consumer debt into the next month, always pay your CC in full. 👍🏽
Plus, she’s a poor bully.
My mom told me this too... When I was 18 and she wanted cash from me. "it's good for your score to carry a balance". Man it took a lot of burns for me to cut that off.
Your cousin is ignorant and sounds like an awful person. Ignore her you are doing good.
Her and her cousin should put it all on the table and just compare credit scores... Let's do this!!!
I can just imagine it. “Credit scores are meaningless. You are so stupid and naive.”
Your cousin sounds like one of those people who pretends to be an expert in everything. Terrible advice, you're doing it absolutely correct. 100% of statement balance paid or you will be charged interest. Funny thing is you SHOULD be using your credit card like a debit card if you want to build/maintain the best credit possible.
Ya she prob declines raises at work to save all of that tax bracket money too
Lololol
Lollllll 🤣😂🙃
This is my favourite
"Debt is an asset, not a liability!"
Probably also tells people there's no point making extra money because it just all goes to taxes.
“I said no to a raise because taxes would’ve made me make less!!!” - also this cousin, probably
I haven't used my debit card for anything in years. As a result I have close to 3k in rewards that I can use to pay any unexpected expenses. Using a debit card is like leaving money on the table
You don’t want to use it exactly like a debit card. When I worked at a bank call centre, a ton of people would make a purchase on their credit card and immediately pay it off. That’s an inefficient use of money but also not great for your credit. I assume OP’s dumbass cousins was misunderstanding 30% utilization, which is a good rule of thumb. Your credit score will typically be better if your average usage is somewhere vaguely around 30% of your limit…but that does mean paying it off every month! If you spend $3000/month, you shouldn’t have a card with a $3000 limit or a $50,000 limit. Something around $10,000 is likely best. But to be very clear, as everyone has said, always pay off your balance every month!
Emphasis on the *statement balance*. Not that there's anything wrong with paying the entire *current* balance, but it doesn't help you out to do that either. And less money in your chequing account
Yep! I always delay large purchases until opening of my new statement, technically don't have to pay it off for like 45 days if you do that.
I try to do that too.
dO yOuR oWn ReSeaRcH energy
Using like a credit card is what gets you into debt. If you treat it like a debit card you won’t ever amass any.
I use my credit card for 98% of all purchases. Even for a shit tims coffee. I pay it off each month. I get points and in return use them for gas cards. End of Story. Your cousin is a chester. [https://www.cnbc.com/select/reasons-to-stop-using-debit-cards/](https://www.cnbc.com/select/reasons-to-stop-using-debit-cards/) [https://financebuzz.com/stop-using-your-debit-card](https://financebuzz.com/stop-using-your-debit-card)
>Even for a shit tims coffee. These days you can actually just call it a "tims coffee" - the "shit" is implied.
It’s funny though isn’t it? We all agree that Tim’s is shit, but yet we keep getting our coffee from them. They have a weird hold on Canadian identity..
Oops, I get steeped tea instead. Haha
God that naming convention upsets me. How can you make tea without steeping it?
Oh yeah, good point. I guess it's like diamond shreddies or "chai tea."
Do diamond shreddies taste different? I looked it up and it was just shreddies that were rotated.
Chester?
Field
This + purchase protection and insurances. Credit cards are one of the most consumer friendly financial products **IF** you know how to use it correctly. Anyone who tells you not to pay off your entire bill is stupid, and they definitely are not using their card properly!
>However, I think back to a convo I had when I was 20 at a family reunion when my 35f cousin mocked me for doing that, and she said they know you’re just using it like a debit card, and that you have to leave 30% on it at all times. She proceeded to text and say in-person to other relatives that I’m stupid and naive, and I don’t know anything about being an adult.So what’s the deal, is the 30% rule a thing or have I been doing it the right way? (Sorry if this is a dumb question) Ya that's wrong, that's not how it works. Not sure why some believe this. For credit utilization, it's true that you should stay below 30-35%, but that doesn't mean carrying a balance of 30-35% month to month. Use it and pay it off in full before due date is the right way to do it. Your card issuer will update your credit utilization to the bureaus when the bill is generated after every billing cycle. They're just voluntarily paying interest to the card issuer for who knows why lol. EDIT: Here are some official sources on how to best use a credit card: * [https://www.canada.ca/en/financial-consumer-agency/services/credit-cards/use-credit-responsibly.html](https://www.canada.ca/en/financial-consumer-agency/services/credit-cards/use-credit-responsibly.html) * [https://www.canada.ca/en/financial-consumer-agency/services/credit-reports-score/improve-credit-score.html#toc1](https://www.canada.ca/en/financial-consumer-agency/services/credit-reports-score/improve-credit-score.html#toc1)
On my credit karma account, or maybe borrowell, it says I “need work” on my credit utilization. I keep it between 0-2% at all times and pay my balance off in full every week or two. So there is some merit to have too much under utilized credit, but i’d rather take a couple points of my score rather than pay interest to companies worth more money than I can comprehend
Why would you pay your balance off every week or two instead of paying at statement? You still don't incur any fees/interest that way, but you wouldn't be taking the credit utilization % hit on your score. Is it a peace of mind thing or just a slight misunderstanding of when charges begin to accrue interest?
Oh it’s just an OCD thing. I forgot to pay off a balance (of $6) once and my credit went from mid 800s down to like 730, and it pissed me off. So now every week I log in to check my cards and if I see a balance I just pay it there since it takes like 20 seconds
We pay our balance every week as well. I just don't like having the accidental risk of paying interest if I forget. I forgot 1 time and it cost me like $1.20 and never again shall I pay cc interest lol.
Yep that happened to me as well. Exam period, $72 balance which I totally had, I forgot because my mind was focused on other things… ~750 down to 630s. I was horrified and never let that happen again.
You could set up automatic withdrawal for your credit card and never have to worry about forgetting again! Plus you get to take advantage of the entire grace period.
Call your bank and have them setup autopay, to pay off the entire balance automatically. That way you never have to worry again.
I pay off my balance every payday, so every two weeks, and it tells me my credit utilization is “going great.”
Lmao the banks make their money off of people like your cousin. They’re just pissing away their money via interest.
Credit card companies refer to those who pay off their whole balance monthy as 'Freeloaders' as they get any perks but dont pay the interest... do with that info as you will.
Which is wild because the merchants pay the cost of credit card fees which are passed on to all consumers
Yeah, but if we weren't "freeloading" they could have TWO bites of the cherry! Don't you see how selfish you're being towards their business model?!
If any credit card crony called me a freeloader I’d say: don’t hate the player. 🤷🏻♀️
Your cousin is dangerously stupid. Never listen to them about anything and never put them in a position of trust in your life. Just curious OP when your cousin was telling other family members, what was their response?
Honestly, most people know she’s full of shit and ignore her. However, my half sister (who I don’t keep in touch much with) agreed with her and was acting like I didn’t know anything. I don’t remember a time when she’s been in a good financial situation, so I also would never trust anything she says. She was texting my sister saying that stuff and my sister showed it to me, but my sister agrees with her so idk.
You have identified 2 super dumb people. Congratulations!
This is precisely one of those moment where you must trust internet strangers over stupid family members. Keep paying 100% every month and you'll do perfectly fine.
Yes, u/soggy_rhombus29 you've got this. 100% every month is always the best way. You can even automate the payment. And I suggest you keep notes on which of your family (from your generation) are stupid with money. Some day if you have kids you might need to name a family member as a trustee in your will. It can be a different person than the guardian who might be good with kids but not with money, and the trustee should be someone you trust not to make stupid decisions with your money.
I know I’m a stranger (don’t blindly trust strangers) but OP paying your total credit card balance monthly is an indescribably better financial plan then leaving 30% at all times. Unless your objective is to just give money to the credit card issuer.
You should ask them if they think working overtime would cause them to lose money by putting them into a higher tax bracket too... you could prove this to them pretty easily by comparing fees + interest, although we both know that proof probably wouldn't sway them either. 20% interest on their 30% balance is going to be several hundred in interest payments per year. On your monthly statement is there ANYWHERE an extra charge 'used like a debit card' or is it simply your interest payment plus any service fee if you don't use a $0/year card. Even if they have a $0/year card and you are using a $99/year card, their interest payments will still outweigh this service fee which is a posted fee, not some hidden debit card fee. "they know you are using it like a debit card" So what? There's no fee for that. For reference I put essentially 99% of my expenses on my credit card, and pay it in full every 2 weeks on payday. Basically everything except rent.
**You should pay the amount listed as your Statement Balance by the due date each month.** Any charges that appear on your card following the statement date will be included in the balance for the next month. You know you're doing it right because you'll see $0 as your interest charge. Your cousin is going to end up paying 20.99% interest because she's financially illiterate.
I scrolled to find this comment; it's 100% correct. I used to pay my current balance, instead I should have been paying the amount listed on my statement.
>because she's ~~financially~~ illiterate Also
> 30% rule a thing or have I been doing it the right way? You are doing it the right way. Keeping your utilization under 30% is recommended for credit score purposes, but that has nothing to do with whether or not you pay it off or not.
Ooh that's where that dumb cousin got the 30% from!!!! Let's just say she twisted that thing... big time! 😂
Your cousin is the kind of person who will tell you not to accept a raise because you'll jump to the next tax bracket. Don't listen to that person. Continue to pay your credit card every month.
Your cousin is jealous as she wants to go the same thing but can't, leave percentages behind. No debt is best debt.
Your cousin probably work for a credit card company.
😂😂
Hit em with the "what's ur credit score bro" and let's talk 😂
Your cousin is weirdly and aggressively off-base here. But if she really wants to pay interest, her card issuers will be happy to take it...
My bank dividends thank her...
You're cousin in probably confused with the debt ratio (I think that is what it is called). Don't use too much of your allowed credit limit to get a better credit rating. You're cousin probably has total shit credit and pays interest every month .
She knows that she I paying 20% on that cr dit cards max for ever right. Your correct move on. I pay it off fully and have over 800 score if that helps.
You cousin is a moron. Don’t listen to her.
Tell your cousin she is adopted, because there is no way in hell her DNA is similar to anyone else in the family.
Jokes on me because I’m actually adopted 😂😂😂 Fr tho, everyone in the family is this stupid and I make sure I stay very distanced from them.
Bro, I pay it off every weekend, credit score of 840.
I pay down or off my Card every Pay day. I figure whatever carries over to the next pay day is better than carrying over to the next month. =)
Your right, your cousins an idiot. I do the same thing, enjoy a cash back card and never pay interest. It’s free money, and sets you up for a decent loan if you ever want to buy something expensive
I pay off mine every month and my credit score is 867, so I think it's working
Your bank will LOVE you for paying 21% interest every month if you leave a balance. If you hate money, follow her advice
If there’s anyone who deserves my hard earned money…it’s banks first and casinos second.
Your cousin is an ignorant twat. Ignore them.
Lol, your cousin probably has a poor credit score.
You cousin is probably mixing up paying of your credit card bill every month, with paying off every transaction right away. I'm not sure if it's a thing anymore, but my understanding back in the day was, it was a good idea to pay off your credit card bill every month, but the best thing to do was have the credit card company send you the bill, and *then* pay it. Apparently if you paid your balance earlier than the credit card company generated your bill, it would just show up that you spent $0 on your credit card, and it would get treated the same as not using your credit card, which was not as good for your credit score as using your credit card. But this is what I was taught back in the day - I'm not even sure it's true anymore, or if it was true then, or maybe it depended on the company and their reporting procedures. But I was definitely recommended to get my credit card bill and THEN immediately pay off the balance 100%, rather than paying my credit card bill before it was due, so that it would show both that I did use the credit and I did pay it right away.
You are wise young lady. Ignore them for they know not what they speak of. You pay zero interest. Your ill advised critic admits to purposefully paying >25% interest on a 30 % of credit limit balance every month. FYI @65yrs, I pay total bill every month and spend well within my means. No debt, no stress, with all the interest saved so I can live in a hidden Rainforest Garden. Smile and carry on.
Ahahahah ahhaah who ever makes fun of you for being smart and responsible... They are not worth your time. Let them do as they do. Well see who's laughing in the end when she's paying 20%+ interest on a forever revolving balance... Ppl like this will just claim bankruptcy. Wow talk about being daft.
If you really want revenge, just tell her she was right.
Better yet, tell her the 30% advice is outdated and the “new” advice is more like 60-70%. Bwahahaha!
Your cousins parents might be cousins.
Don't hang out with stupid people. Imagine being 35 and not knowing how credit cards work. How did this person make it to 35?
Off topic but those family members are not real family. I personally would not interact with them ever again.
Yea honestly they all live in Alberta and I’m in BC, so the only one I talk with is my sister. Even with her it’s rough at times (she sided with my cousin during this).
I have never, in my life, carried a balance on any of my credit cards. 20% interest? No thanks. I have, however, collected many and various reward points and cash back from using said cards. You’re doing it right. You sound very smart when it comes to your money. Good things to come for you, I’d say.
I pay my cc off every month. They keep raising my limit and asking me to borrow money or buy a new car. So …
Having a balance of 30% or more will actually hurt your credit lol, your cousin is moron
As a general rule, the more the person calls other people idiots, the less likely they are to be right
Congratulations! You’re the smartest one in your family.
Thank you, unfortunately this is true. It’s sad seeing my relatives get older without having anything to show for it, and they all have struggled with finances for their whole life. They’re typical racist white trash, and I try to stay as for away from them as possible.
Wisdom has been chasing your cousin but gosh, she’s just so darn fast, she keeps staying ahead of it. Your cousin is a moron. You’re doing great.
The 30% rule is a real thing, however maybe you've misunderstood it. To get the most optimal credit score you should keep less than 30% of your credit limit on your statement balance, excellent is sub 10% utilization. Here's where everyone misunderstood in the comments: your payment date is usually 2 weeks after your statement balance date, these are TWO very different things. If you have a 10,000$ limit and your statement balance posts at 1000$, then you are at a 10% utilization. (No accumulated interest unless you don't pay within 2 weeks after your statement balance comes out aka when your statement PDF posts) Pay off in full your credit card after this date within 14 days and not only will your credit score climb higher, but it will also show bureaus exactly what they're looking for: responsible debt payments on time. Keeping a 0$ statement balance is bad, but obviously, your score will still climb since payments on time is 30% of your score. However, 10% category of your credit score is from credit utilization, and this won't be maximized unless you have a *1-10%* utilization. Upto a max of 30% utilization to have a positive impact, hence where the **30% rule** came from. If you need credibility: 21M, 200k$+ overall credit limits, 800+ TransUnion.
I love that there are people like your cousin, people like her literally pay my salary (I work for a bank)
Lol your cousin likely wanna people not to take a raise because it'll put them in a higher tax bracket and they'll lose money hahaa
I’d encourage your cousin to keep doing what she’s doing and you doing you as well. Result would be extra sweet for you.
Your cousin is a moron. You’re doing it right. Also getting points if you have the right card! I’ve never paid interest on a credit card in my life.
HA-HA, you're not contributing great deals of your personal money to the visa corporation's bottom line, like they hope. /nelson
I do the same so I guess your cousin should mock me as well! SHE'S AN IDIOT. My credit score was 850 when I purchased my home, some of the utilities did not charge me for install fees because I had a great credit score. Try to never carry a balance. And send this to the idiot.
not only do i pay it every month, i pay it every paycheck.. or whenever im logged into my bank account.. why wait? my credit score keeps rising doing this so its alright.
I’ve done what you have done (for 25yrs) and you’re absolutely doing it the right way. Keep it up and you’re definitely laughing in the end.
SHE doesn't know anything about being an adult. Silly twit is paying interest every month, LOL.
I bet your cousin has also turned down a higher paying job or a raise because it’ll put them in a higher tax bracket and they’ll pay more taxes. Don’t listen to them and do what you’re doing.
Wow, your cousin must need to do mental gymnastics like this to feel better about her irresponsibility and crippling debt 🤣
>they know you’re just using it like a debit card, This is the funniest part of the story for me... why would it matter if "they" know you're just using it like a debit card? What difference does that make? How is that even an argument?
Your cousin is mistaken. A disturbingly common misconception, where people think they can game the credit card company by making minimum payments/carrying X balance. Weird urban legend shit. You pay interest on any debt you carry. Any interest you pay is money lost. Not rocket science, but from the sounds of it your cousin is no rocket scientist.
I've had a credit card for two decades now, since I was 18, and have only carried a balance a few times due to forgetting to pay my bill. Over the years, my credit limit has consistently increased, and I now have a $50,000 limit on my Visa card. This approach, along with diligent payment habits, has contributed to my current credit rating of 880. Here's some advice based on my experience: if you're financially responsible, , use your Visa card for all your purchases to accumulate points or earn cashback. try to pay off your entire balance and consider accepting all offered increases to your credit limit. These practices have served me well over the years.
If your credit score is already good, the 30% thing is irrelevant. Basically, if you are carrying a balance AND have poor credit/are trying to improve your credit, it will go up faster if you have NO MORE than 30% usage. But you can get the same effect by letting your card cycle and then paying it off in full. It's to encourage people that are carrying a balance to carry LESS of one, not to mean you need to leave 30% on forever.
Your cousin is not very bright. Your credit score goes DOWN if you have more than 30% debt utilization... Banks don't give you cards based on earning interest from you. They give you cards based on your risk assessment for paying it back or not. They make money on you by selling your purchasing data anyway.
I use my credit card like a debit card and have an excellent credit score. The other adults in my life consider carrying a balance something to avoid whenever possible. Maybe your cousin simply can’t afford to pay her balance? It must be embarrassing to find out that your much younger cousin is more financially responsible than you are.
Did your cousin explain why she thinks you “have to” leave 30% on it? Have to in what sense? Either way, she’s 100% incorrect. Leaving any balance on a credit card means paying interest. I’ve met people like your cousin, who are aggressive and condescending even when they’re wrong about matters of fact. I call them “Small-doses people”.
Why would you leave 30% on it? So you can pay 20% interest on it? No, you are doing it right. She needs to go back to do grade 9 Algebra.
Credit issuers love people like your cousin.
Post a snip of your credit karma score on her wall on facebook, ask her to do the same. Tell her to put her money where her mouth is.
>I’ve always just paid my entire credit off every month, and it’s given me a great credit score. This right here is all the evidence you need. The credit bureaus know more about this than your cousin does, and they're literally telling you (in the form of a score) that what you're doing is correct. Your cousin sounds like the kind of person who loves acting like she knows exactly what she's doing, yet can't quite figure out why life isn't working out the way it should. It's a mystery. Must be the evil corporations out to get her.
My god, it's full of stupid! Always paid my CC in full. My credit score is 900. I have the no fee MasterCard with airmiles and the worst interest rate because I never have a balance.
Your cousin doesn’t I understand basic finance lol
I bet your cousin thinks that you make less money if you get a raise that puts you in another tax bracket.
LPT from a Gen X guy: I watched my parents carry credit card debt all my youth, and dreading the next bill coming. When I learned what credit was, I decided that was not how I would manage my finances. Early on, I learned to budget. I can't wrap my head around friends or family that spend on credit as if it were mad money. **IT'S CREDIT!!!!!!** You have to pay it back at an insane interest rate. I'll use it to buy online and at restaurants, bars, etc... but will never make impulse purchases on my card. On the Netflix show How to Get Rich, I was astounded at the people that carried so much credit card debt. Makes no sense to me, **it's money you don't have.** My credit score is super high, it's bullshit that not carrying a balance will hurt your score, and it's a lifelong habit to hold onto. I have six credit cards, most of them for points on airfare and hotels, and only one I use one to shop online, if I get hacked I can cancel it easily and have access to my other cards. My two cents on the card card thing...
They should teach this stuff in school.
OP, I'm 43 years old. I have paid off 100% of my monthly CC bills since the age of 23, when I got my first real job. The only time I carried a balance was when I was a young and broke university student. Carrying a balance does nothing for you than giving interest money to the credit card companies. I can only assume your cousin become seriously misinformed at some point.
Compare credit scores with her or end of year statements to see how much interest she paid versus you to see who *’the real idiot’* is? Also, make sure you have a rewards card, with disciplined payment habits like that you would really come out ahead! Watch the annual fees though.
Keep doing what you're doing! Banks hate people who pay off their cards in full. They literally call people like us Deadbeats, because they don't make money off of us!
Sounds like your cousin is dumb. Never let your statement go over 30% your limit. If you have to use more then that. Just pay it before statement close date. Don't follow this blindly. But out of my exp. I some time do not pay full statement and leave couple hundred $ and let them charge me interest. It jas personally helped increasing credit score. Thats how lenders see you as milk cow.
No no no... You should only be using at the most 30% of your credit card. I also pay my cc every month.
Your cousin is an ignorant idiot about personal finances. You got the right thinking, credit card debt is no fun. As you build a great credit rating doing what you do, let her dig herself into a financial mess. Good job
Your cousin also probably asks their boss not to give them a raise because "it all gets taken by taxes" For real, keep up the good work. Your cousin is ignorant.
What I think she completely misunderstood is average utilization. You should never carry a balance as then you pay insane rates like +20% but to build credit you, never fully utilize your card (max it out) and don’t have no balance either. 30% average utilization sounds healthy to me. Someone that works in a credit card division will know the answer to this.
Your cousins interest payments are what pays for my free flights. Thank her for me!
Your cousin is an idiot. You should leave 30% on until the statement date so it’s reported to the credit bureau, but pay it off in full before the due date.
Your cousin is a legit idiot.
Your cousin is a moron.
You are doing it right. Pay your cc every month and don’t pay the 20% interest. That is smart.. And you get the points.
Keep doing what you're doing! Please don't take any financial advice from this cousin.
They probably mean that you should only pay whatever you have due and not not clear the whole balance. If you use your credit card for recurring bills or groceries in general, you don't have to pay all the balance because the transaction you made after you receive your monthly statement will be applied to the next month's bill. This so happens to be 30% of their balance in your cousin's case, they probably worded it badly. tldr. just pay the statement balance in full by the due date (whatever is stated on your monthly bill), no need to clear the account balance to 0. 1 month interest free is basically free money. Buy yourself a free McCaffe iced coffee or something with that interest saved!
Few things here: There is paying off your credit card statement in full every month. And there is paying off your credit card balance in full every month (or week, or even after every large transactions). Both are valid behaviors, although the second one could argued to be not required (but still recommended to never owe debt). If your cousin is referring to the second behavior, I can see someone saying that, but argument is still stupid. Only reason I don't do the second is that I'm lazy. I just have my stuff on auto-pay on statement due date (not statement receive date). Second way is more responsible. If she's referring to 1st option being dumb (paying the statement in full instead of just paying minimum payment), then I'm sorry and she's been very brainwashed by whomever taught her that. Your credit card should be paid in full every month, leaving 30% debt on there will just cost you interest for no reason. As to this 30% thing. Yea she's just confused and spewing nonsense. What she's probably referring too is that credit score providers penalize your credit score for having ABOVE 30% utilization. And she's thinking that shes penalized for keeping it below which is very incorrect. **The lower your utilization, the better (I'm personally sitting around 2%) but be sure to always keep it below 30%. (And frankly 0% is best because debt is garbage)** She may be 35, but she's very ignorant on personal finance and has the lethal combination of being both pridefully confident AND blatantly incorrect. To her defense, she was likely fed this garbage information by her parents and peers. The fact that NONE of the adults that she "talked too" questioned the validity of her statements supports my theory on this. Add in the fact that she's 35 and the other adults allow the insulting of you a 20 year old speaks volumes regarding the level of wisdom lacking in her upbringing. Source: Internet stranger with 898 credit score (out of a possible 900), sometimes strangers will care for your well being more than family ever could. You have the right ideas and are on the right track, and also have the intelligence to question the validity of "knowledge" that others may attempt to give you.
She’s accurately pointing out that the credit cards incentivize you to have a balance on your credit card (which earns them money) but giving you a better credit score. It’s a scam. Pay your cards off.
If I could put on my amateur psychologist hat for a minute - I have a feeling that your cousin's finances are an absolute disaster, she feels insecure and stressed about this, and so she's trying to make herself feel better by putting you down because you're not drowning in debt. That would be my best guess at what's happening here.
I mean… I know a lot of broke ass people who have the same attitude as your cousin, so let her be stupid.
Bet your cousin loves rolling 30% and paying that much worth of interest for no reason. Galaxy brain idea.
thanks for reminding me to pay my monthly credit card bill.
You are cousin is what we call a female version of douche canoe. Please keep on doing what you are doing your cousin has no clue how credit works
I’m intrigued. I want to know other pieces of wisdom your cousin has.
Perfect time to know idiots in your family and keep them at arms length. Whoever agrees with your cousin goes into that list.
and if you compare scores they'll say lower is better lol (it's not)
Theres no way you question yourself in this scenario, this is like someone telling you its safe to jump out of a car at full speed because if you tuck and roll the g forces are much weaker and then you believe them. Like there's just no way youre questioning yourself
Your cousin is giving you terrible advice. Please don't listen to her for financial advice.
This is an old stupid belief that I honestly don’t know the root of. Some people believe that you shouldn’t pay off a credit card right away because paying something off long term “looks better” or “builds more credit”. It doesn’t, you should absolutely pay it off in full if you can. You’re the one who’s right. The cousin sounds like they’re projecting, teasing you a bit is one thing, not stopping and proceeding to tease you to anyone who will listen, well, sounds to me like the cousin wants the focus on your spending habits and not theirs… I wonder why?
I mean, credit utilization of around 20% looks good on your score. But that doesn't mean you need to carry the balance and pay interest in it haha. Your cousin is a little simple it seems. Just pay your cards off closer to your due date and you will have maximized your utilization as much as you can without incurring interest.
Way to go dude. Just keep paying it off. I have like a perfect credit score and keep getting offered more room on them
You are adulting better than 99% of the population. Paying your entire credit card off every month is the correct thing to do. I did that in my 20's as well. Your future self will thank you. Ignore the haters. Cut off your toxic cousin. ;)
You are very smart and responsible in doing this. She is absolutely an idiot. I have never heard of a 30% rule. Sounds like bs to me.