Pay off each month, or carry a balance? Please help decide "heated discussion"

[atlan]

[deleted duplicate post]

[atlan]

Just my .015

I am no credit expert (see the thread I started "Digging Out Again", to find out the mess I've gotten myself into) -- but my gut tells me that you'd rebuild your credit faster by continuing to pay each month's balance in full on the existing credit cards, and taking out a small personal loan from your local credit union to buy whatever you want to buy (i.e., that television). No, it won't be interest free or anything like that. But it will show that you can handle a large monthly payment if you can pay it on time.

I took out a $600 personal line of credit from my local CU last year and have paid it off (almost!). The payments have been $50 a month, much higher than a minimum CC payment, but the CU rep I talked to said that would reflect well on my credit score.

The good things (for me) about the CU personal loan:
- Relatively low interest rate, not 0% but not too high either (I think it's 12.5%)
- I can't charge "more stuff" on it; no temptation to keep topping it up like a CC
- It's being paid off quickly relative to my CC's, which seem to take forever to pay off
- Payments are automatically taken out of my CU checking account each month
- Looks better on my credit report than CC's (which I don't pay in full each month)

My two (or possibly 1.5) cents' worth. I hope it's helpful.



*atlan*