Paying credit card interest does not affect your score directly.
However, paying interest hurts your score indirectly.
You pay interest on credit cards when you pay less than the full balance owed at the end of any billing cycle.
Does paying interest build credit?
Fact: Credit cards are great tools for building your credit history, and you don’t need to carry an unpaid balance to do so. Your best strategy is to use your credit cards and pay off the bill in full each month, so you keep your overall debt-to-credit limit ratio low.
Is paying interest on a credit card bad?
Paying only the minimum keeps you in debt longer, costs you money in interest and could hurt your credit score. But you’re also committing to paying more in interest charges later. That trade-off can get you into serious financial trouble over time, especially if your card charges a high interest rate.
Will my credit score go down if I only pay the minimum?
However, when you pay only the minimum, your balance only reduces by a little and a high credit utilization will continue to hurt your credit score. Paying your full balance rather than paying just the minimum can help your credit score, but it’s not necessarily the payment amount that helps.
Do you get charged interest if you pay minimum payment?
If you pay the credit card minimum payment, you won’t have to pay a late fee. But you’ll still have to pay interest on the balance you didn’t pay. If you continue to make minimum payments, the compounding interest can make it difficult to pay off your credit card debt.
Photo in the article by “President of Russia”