A recent study concluded more than one in five credit card users pay little or nothing on their monthly credit card bill thinking it’ll help their credit score, but financial experts say it actually has the opposite effect.
"Nothing is going to torpedo your credit score quicker than making late payments on anything other than the occasional basis," said BankRate’s Greg McBride.
He says this credit card myth seems to be more prevalent among millennials and that the only beneficiaries of carrying credit card balances are the credit card companies.
"With the average credit card rate now over 17 percent, there’s a clear benefit for card issuers if you’re carrying a balance needlessly on your credit card," McBride said.
Bottom line: credit scores soar when bills are paid on time and when debt is paid monthly.
"Together, that’s nearly two-thirds of your credit score right there. That’s the low hanging fruit in terms of building a solid credit history," McBride said.