Let's dispel a common myth about credit card balances and credit scores.

Answer: All at once

Questions:

• Why might some people believe that carrying a balance is beneficial to their credit score?
• What are the potential costs associated with carrying a balance on your credit card from month to month?
• How does carrying a balance on your credit card affect your credit score?
• What are the benefits and drawbacks of using a credit card responsibly?

Click here for the ready-to-go slides for this Question of the Day that you can use in your classroom.

Behind the numbers (CFPB):

"Companies use several factors to calculate your credit scores. One factor they look at is how much credit you are using compared to how much you have available. In the case of a credit card, they look at the balance you owe compared to your available credit.

Consistently paying off your credit card on time every month is one step toward improving your credit scores. However, credit scores are calculated at different times, so if your score is calculated on a day you have a high balance, this could affect your score even if you pay off the balance in full the next day."

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NGPF's Managing Credit unit has tons of resources to help get your students ready for responsible credit use!

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Attend NGPF Professional Developments and earn Academy Credits on your own time! Check out NGPF On-Demand modules!

About the Author

Ryan Wood

Ryan is the Partnerships and Adoption Manager for Next Gen Personal Finance’s midwest region. He brings his experience as a former teacher, curriculum designer, and sales and marketing professional to state organizations and school districts in supporting the implementation of their personal financial education efforts. He graduated from the University of Wisconsin-Green Bay and earned his teaching credential from Saint Mary’s University in Winona, Minnesota. He proudly taught at two rural high schools in Wisconsin before transitioning to curriculum design at NGPF, and is now excited to be on the front lines in delivering the best possible financial education in the midwest. He and his wife have three beautiful daughters, each of which inspire him to share the impact of being sound financial stewards both at home and as lifelong learners.

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