One of the most persistent pieces of personal finance advice sounds simple:

Carry a small balance on your credit card to build your credit score.

For years, consumers have been told that leaving a balance unpaid demonstrates responsible credit usage and helps establish a stronger credit profile.

But is that actually true?

Or is it a costly misconception that leads people to pay unnecessary interest charges?

As inflation, rising interest rates, and household debt continue to put pressure on consumers, understanding how credit scores really work has become more important than ever.

Why This Matters Now

Credit scores influence nearly every aspect of financial life.

They can affect:

1. Loan approvals
2. Mortgage rates
3. Car financing
4. Insurance costs
5. Rental applications
6. Access to credit

Because of this, many consumers actively seek strategies to improve their scores.

The belief that carrying a balance helps build credit remains surprisingly common.

Yet as credit card interest rates climb to historically high levels, following that advice may come with significant financial consequences.

The key question is whether any potential credit score benefit justifies the cost of carrying debt.

Expert Perspectives

John Ulzheimer: Credit Utilization Matters

Credit expert John Ulzheimer believes there is some nuance to the discussion.

According to Ulzheimer, credit scoring models consider credit utilization—the percentage of available credit currently being used.

"Credit scoring formulas consider utilization rates; this is the percentage of credit used versus the credit limit available."

He argues that maintaining a low utilization ratio can positively influence credit scores.

In certain cases, having a small reported balance may demonstrate active and responsible credit use.

However, Ulzheimer also warns that this strategy requires discipline.

A low balance can help utilization metrics, but excessive balances can quickly become harmful.

If consumers fail to manage their debt properly, interest charges and financial strain can outweigh any potential scoring benefits.

Carrie Schwab-Pomerantz: Pay in Full

Financial educator Carrie Schwab-Pomerantz strongly challenges the idea that carrying a balance is necessary.

"There is no need to carry a balance to build credit; in fact, paying off your balance in full is the best practice."

She agrees that credit utilization plays a role in scoring models.

However, she emphasizes that utilization and carrying debt are not the same thing.

Consumers can use credit cards regularly while still paying balances in full each month.

According to Schwab-Pomerantz, the most important habits remain:

1. Making payments on time
2. Keeping utilization low
3. Avoiding unnecessary debt

Building credit does not require paying interest.

Her approach prioritizes long-term financial health over score optimization strategies.

Robert Frick: The Hidden Cost of Credit Myths

Corporate economist Robert Frick focuses on the financial consequences of carrying balances.

"Consumers should recognize that the interest on unpaid balances can significantly diminish any perceived benefits of a better score."

Frick argues that many consumers fail to perform a basic cost-benefit analysis.

If a credit card charges 20% or more in annual interest, any modest improvement in a credit score may not justify the expense.

Paying interest simply to maintain a balance often amounts to purchasing a credit score boost that may not even exist.

For Frick, the real danger lies in turning a credit-building strategy into long-term debt accumulation.

Editorial Synthesis

Where Experts Agree

Despite their differences, all three experts agree on several key points:

1. Credit utilization is an important component of credit scores.
2. Making payments on time is critical to building strong credit.
3. Financial discipline is essential for long-term success.
4. Consumers should understand how credit scoring actually works before adopting strategies.

Where Experts Disagree

Should You Carry a Balance?

Ulzheimer argues that small balances may sometimes contribute positively to utilization metrics.

Schwab-Pomerantz and Frick maintain that carrying a balance is unnecessary and financially inefficient.

Is the Benefit Worth the Cost?

Frick places significant emphasis on interest expenses.

Ulzheimer focuses more on the mechanics of scoring models and utilization ratios.

Credit Score Optimization vs. Financial Health

Some experts view score management as a tactical exercise.

Others believe avoiding debt and minimizing interest costs should always take priority.

Why This Matters

The debate reveals an important distinction:

Using credit responsibly is not the same as carrying debt.

Many consumers mistakenly believe that credit scoring systems reward interest payments.

In reality, credit scores primarily reward behaviors such as:

1. Consistent on-time payments
2. Low credit utilization
3. Long credit history
4. Responsible account management

Paying interest does not directly improve a credit score.

This misconception can become expensive, especially when credit card rates remain elevated.

For most people, the smarter strategy is straightforward:

Use credit regularly, keep balances low, and pay them off whenever possible.

Because while a credit score can help open financial doors, accumulating unnecessary debt to improve that score may ultimately undermine the very financial health you're trying to build.

The goal isn't to prove you can carry debt. The goal is to demonstrate that you don't need to.