Carrying a balance for a month?

[BuckyBadger]

Does carrying a balance on a credit card for one month affect your credit score? I'm planning on buying multiples of something with the intention of returning all but one, but the card closing date is going to be in between the purchase and the returns. I want to do it on a card I don't use a lot and never for large purchases (for other unimportant reasons), so I don't want to have a negative balance sitting on a card after I make the returns, so I was thinking about just making the minimum payment until the returns clear, and then paying the remainder like normal.

Honestly, I'm not sure what they do when you have a negative balance on your card. Do they cut you a check? I though it would just be easier to carry a balance for one billing cycle.

I've never carried a balance, though, and wasn't sure if it would knock any points off of my credit score.

[kv968]

As long as you make the minimum payment on time it won't affect your score at all.

Could you wait until the beginning of the next cycle, buy the things then and return them in time to be deducted from your account before they issue the statement?

I don't know how they would treat a negative credit though if you to pay it in full. I would imagine, like you said, they'd just credit your account.

[phantom]

Why not call the card issuer and ask them what they would do if you got a credit on your account for more than you owed? I am guessing that they will probably write you a check, but that they will not do it until another billing cycle passes or until you ask or something like that. But, I don't have anything to base that guess on, so I would ask.

[frugalgirl]

My credit card company will refund the amount via check after 90 days.

[thesmartnickel]

Carrying a balance doesn't do anything to your credit score if you make minimum payments, but you will have to pay some hefty interest (depending on your APR). If you carry a negative balance, you just have a negative balance which will cancel out with any other purchases you make. I've accidentally overpaid in the past and just had like a -$10 balance for a week until I made a purchase which cancelled it out.

Also, do you mean your statement closing date or the due date of your payment? If you are returning the items after your statement closes but before the due date, you shouldn't have any problems just paying the exact amount (although it may take some days for the refunds to post on your account).

[MonkeyMama]

I suppose it depends on the credit card company. I have asked for "negative balance" refunds from multiple credit cards in the past. They just send a check. (I did this recently when an annual fee was refunded for a one-time-rewards card. In the past, I did this with 0% balance transfers. What you do is do a balance transfer to a card with $0, and then ask for a refund of the balance - I did that so I could invest the money). Off the top of my head, might have done this with 3 or 4 different credit card companies over the years - they sent a check like the day I asked for it. I would call the company just to see if they have any rules about that (like waiting 90 days? someone mentioned?)

I don't see that it would do anything to your credit score. Your credit report doesn't really differentiate "carried a balance" or "paid in full every month." They just report your credit balance whatever day of the month they end up reporting it to the credit bureaus.

[neguy11]

Ok, I'll bite. What are you planning to buy multiples of and then return all but one?

[BuckyBadger]

Saddles. Three of them. Quite pricy

[disneysteve]

As long as you make the minimum payment on time it won't affect your score at all.

Carrying a balance doesn't do anything to your credit score if you make minimum payments

You guys are overlooking one factor - the utilization ratio. Running up the credit card could affect your score depending on the amount you charge relative to your credit limit. Try to keep your charges under 30% of your credit line. Going over that could negatively affect your score, though probably only slightly and only temporarily.

[kv968]

You guys are overlooking one factor - the utilization ratio. Running up the credit card could affect your score depending on the amount you charge relative to your credit limit. Try to keep your charges under 30% of your credit line. Going over that could negatively affect your score, though probably only slightly and only temporarily.

Ah, good catch Steve.

Although I'd say also take into consideration the utilization of your ENTIRE credit available if you have more than just one card. The hit might not be so bad if you do go over 30% on the one card but maybe only 10% on the whole.

[MonkeyMama]

I can't imagine a high utilization for *one month* of your life amounts to a hill of beans in the long run - why I didn't mention it.

[BuckyBadger]

Thanks for all the input, guys! The only reason I really care is that we may be applying for a HELOC now that our refinance is done, and I don't want anything weird coming up on my credit report. It's the perfect storm of random credit usage

[kv968]

I can't imagine a high utilization for *one month* of your life amounts to a hill of beans in the long run - why I didn't mention it.

I'm not sure it would make all much of a difference either but in Bucky's case (going soon for a HELOC) it may.

The one thing I don't like about the way they report your credit is how they just show the highest amount you've ever charged and your credit limit. I'm not sure if this is how the creditors see your total report but I noticed when I'd pull up my credit that's all it shows.

Which means in one month out of say 84 I may have gone high on my utilization ratio but there's no distinction of whether it was actually one month or I do it all the time. Of course it shows if I was late in paying it off, which is more important I think than the utilization itself, but it can also give the wrong impression of how I charge things.

I know the way to avoid that dilemma is just to not charge too much in one month (and I really haven't), but I can imagine there may be some months when I might need or want to and it wouldn't look good.

[MonkeyMama]

I personally maxed out several cards for several months (balance transfer/investing scheme I mentioned in last comment), and then ended up refinancing in the middle of it. It just didn't matter in the scheme of things. A few months of weird behavior doesn't do much to a very long-term *high* credit score. *Of course, I would be more concerned for anyone whose FICO score was not excellent over the long haul.* But if it is excellent over the long haul, it takes a LOT to lower it of any significance.