Find out how 79% of Gen Z survey respondents answered.
Answer: The answer is INCORRECT. It’s your timely payment history that matters most, and paying off your credit card balance each month eliminates those hefty interest charges.
Why do you think so many young people get the answer to this question wrong? 49% of credit card users admit they made a late payment on their credit card, which will lower their credit score, lead to late fees and increase their interest charges. Why do you think so many people pay late? What steps can card users take to avoid paying their bills late?
Here are the ready-made slides for this question of the day that you can use in your classroom.
Behind the numbers (LendingTree survey):
The myth that keeping a small balance on your cards is actually good for your credit score is widespread — about two in three Americans believe it. For the youngest consumers, Gen Z, the percentage is 79%. But it’s just not right, says Schulz.
“The myth hurts cardholders because it costs them money. If they only carry a small balance, it might not cost them a lot of money, but it will add up over time,” he says. It is especially concerning for the youngest generation who could carry scales for decades.
Looking for fun ways to teach your students about credits? This is one of the most popular posts on the NGPF blog: My 9 Favorite Games & Interactive Things to Learn
Last day to guess for NGPF’s “Guess the CPI Contest”…5 lucky classes will win $100 gift cards. More deets here.
About the author
Tim’s savings habits started at 7 a.m. when a neighbor with a broken hip gave him a dog walking job. Her recovery, which lasted nearly a year, led to Tim getting to know the bank clerks quite well (and building a savings account balance of over $300!). His recent entrepreneurial adventures include driving a chipper, analyzing compensation packages for Fortune 500 companies, and helping families make better college funding decisions. After volunteering in 2010 to establish a personal finance program and teach at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him. to start a new nonprofit, Next Gen Personal Finance. †
This post Question of the Day: True or False? It helps your credit score to have a small balance on your credit card every month.
was original published at “https://www.ngpf.org/blog/question-of-the-day/question-of-the-day-true-or-false-it-helps-your-credit-score-to-carry-a-small-balance-on-your-credit-card-every-month/”