Credit Card Zero Balance: Is there any harm in keeping the credit card balance zero? So know that yes you can be at a loss.

Credit Card Zero Balance: Is there any harm in keeping the credit card balance zero? So know that yes you can be at a loss: The use of credit cards is increasing continuously. In such a situation, many people keep the credit card balance zero, so they do not know about the loss due to it. Let us give you complete information about it.

Let us tell you that the circulation of credit cards is increasing very fast and many people are using it. In such a situation, there are many people who are keeping their credit card balance zero. But they do not know anything about the damage caused by it. If you do this, your credit score can go negative and you may face a lot of trouble in taking an auto loan or personal loan in future. That is why it is very important to know about all these.

If you spend the entire credit card limit, then the balance becomes zero at the end of the month. This affects the credit score. In such a situation, it is believed that people with cardholders are very expensive, in this way the account of the card can also become inactive. It should also be known that from the balance it is also believed that the cardholder is facing some financial problem.

Balance zero effect

If the credit card balance is zero, then the bank can reduce your credit limit because such people here feel that in future the cardholder can default. Lowering the credit limit affects the credit score and it starts decreasing. This is due to the credit utilization ratio and this ratio is considered correct when it is 30 per cent.

Be careful when spending with credit cards

Let us take an example to understand the credit utilization ratio. Suppose your credit card limit is around 1 lakh rupees and you spend 30 thousand rupees every month in such a situation, then it is good. But spending more than this can affect your credit score. If this ratio is less than 30 per cent, then the credit score improves. That's why you have to pay attention that you should spend your credit card wisely.