What is Carrying a balance?

Carrying a balance means leaving part of a card bill unpaid so that it rolls into the next month and accrues interest.

Also called: Revolving balance.

How it works#

Credit card interest sits far above other forms of borrowing and outweighs the value of any points earned several times over. That inverts the whole calculation: anyone revolving a balance pays more for their points than any redemption can return. It is the clearest case in which collecting points is not worth it for anybody.

Not to be confused with#

Carrying a balance is not the same as having unbilled purchases: spending inside the interest-free period costs nothing, only the amount rolled over is charged interest.

In German#

The German term is Revolvierender Saldo. German version of this term

Related terms#

• APR: APR is the price of borrowing on a card account, expressed as an annual percentage rate.
• Credit utilization: Credit utilization is the ratio between the balance on a card and its credit limit, expressed as a percentage.
• Credit score: A credit score is a number a bureau uses to express how likely a person is to meet their payment obligations.

Articles that use this term#

• What does carrying a balance actually cost you?
• When collecting points isn’t worth it
• How much credit limit do you need?
• What is a foreign transaction fee and when does it apply?
• hard-pull-vs-soft-pull
• credit-utilization