Credit Card Balances - Don't do it!

Do you tend to carry a balance from month to month on your credit card accounts? There are some very good reasons why you should work hard to avoid it. Aside from the interest you'll be paying each month, those carried balances end up on your credit report where they can damage your credit rating - even if you make regular payments on those accounts each and every month. Want to know more? Here's why you should try to pay off your credit card balance each month.

• You pay interest on carried balances.
  Keep in mind that when you pay for a purchase with a credit card, you are actually borrowing money from the credit card company. Most credit companies apply a grace period to any purchases that you charge. The grace period is usually up to 56 days, but check your member agreement to be sure. If you pay off the charged amount within the grace period, no interest charges are applied to it. If you carry the balance, though, you'll pay interest on the amount, and you'll continue to pay that interest each month that you carry the balance.
  
  But, you might be saying, how much could that be? Carrying a balance of ₤150 at 11% (a typical APR) will cost you over ₤16 per year.
  
  
• All of your carried balances show up on your credit report, which can affect you when applying for a loan for a new home or automobile.When you apply for a credit, whether a loan or a credit card, the lender will check your credit report to help determine if you're a good candidate. Outstanding balances on your credit cards can bring down your credit score in a number of different ways.
  
  
• Total indebtedness is one measure that lenders consider when deciding whether to approve a loan.  Carried balances on your credit cards add to the total amount of debt that you're carrying.
  
  
• Debt/credit ratio is a second measure that's counted into your credit score. Lenders look at your credit report to see how much you owe in relation to your total available credit. A high debt/credit ratio will lower you overall credit score.
  
  
• Consistently carrying a balance on your credit cards and only paying the minimum (or near minimum) each month suggests that you're living beyond you means to many lenders.
  
  
• Credit card debt carries the highest interest charges of any sort of debt.
  
  
• The interest rates charged by credit card companies are among the highest interest rates for any type of credit or loan. Store charge cards are the only traditional type of credit that carry higher interest rates.
  

Of course, it's not always possible to avoid carrying a balance on your credit card accounts.  That's why it's important that your credit cards carry the lowest interest rates for which you qualify. If you're already carrying a balance on your card, you may find that you can transfer your balance to a card with a lower rate of interest.

By comparing rates and monthly charges at moneyeverything.com you can find the best credit card for all your finance needs. You'll find all the information that you need to make a good decision about the best credit card for you.