It is generally better to pay your credit card in full every month rather than carrying a balance and paying interest. Paying off your credit card debt in full each month is an excellent way to save money and build credit. Carrying a balance does not help your credit score, so it's always best to pay your balance in full each month.
Paying off your credit card balance in full every month helps to keep your credit utilization ratio low, which can positively impact your credit score. A low credit utilization ratio indicates that you are using a small portion of your available credit, which shows lenders that you are responsible with credit and can manage your debt. This can help to improve your credit score over time.
In contrast, carrying a balance on your credit card can negatively impact your credit score. When you carry a balance, your credit utilization ratio increases, which can indicate to lenders that you are overextending yourself and may not be able to pay back your debt. This can lead to a decrease in your credit score.
Additionally, paying off your credit card in full every month helps you avoid paying interest charges. When you carry a balance, you will be charged interest on your outstanding balance, which can add up quickly and increase the amount you owe. By paying off your balance in full each month, you can avoid paying interest charges and save money on your credit card debt.
In summary, it is generally better to pay your credit card in full every month rather than carrying a balance and paying interest. Paying off your credit card debt in full each month helps to keep your credit utilization ratio low, can improve your credit score, and saves you money on interest charges.