#credit cards for good credit
What is a Good Credit Card Balance?
By LaToya Irby. Credit/Debt Management Expert
Welcome to About.com s Credit/Debt Management site, led by your guide, LaToya Irby. LaToya has been the credit and debt management guide since 2007. Read more
Keeping a good credit card balance is important not only for your credit score, but for your overall financial management as well. Having a balance that s too high can drag your credit score down. The higher your credit card balance, the higher your minimum payment and the more money you have to allocate toward that credit card each month.
For example, if you have a credit card with a $100 credit limit. your balance should be less than $30. Of course, the best credit card balance is $0 because that means you don’t have any credit card debt. Keeping a $0 balance is virtually impossible unless you never use your credit card.
Credit score aside, a good credit card balance is the one you can afford to repay. Since the best way to control credit card debt is to pay off your balance every month, you should never charge more than your monthly discretionary income .
Make a list of all your credit cards. Write down the credit limit and the balance of each credit card. Then, for each credit card, divide the credit card balance by the credit limit. Multiply by 100 to convert the answer to a percentage. Any credit cards with balances over 30% could be affecting your credit score. Work to reduce those balances for a better credit score.