Question

All of the following are benefits to paying the full balance on your credit card each month EXCEPT:

Answer 1

Answer: Your credit score can decrease.

Explanation:

It is better to have lower balance as it will increase the credit score. By making the payment as quickly as possible the credit card can be kept active without paying any late fees. It is also interest free to pay back the balance every month.

If any balance is left to be paid in the credit card can have the risk of decreased credit score. By paying back the credit bills in full every month one can manage a healthy finance. Some company even extend the credit limits when paid in full.