I may have to carry a balance, for the first time ever

Question

I have never carried a balance on my credit cards before (other than two accidental late payments, one in 2008 and one in 2009). I had to take my boyfriend to the emergency room on two occaisions a couple of weeks ago, and today, we got the bills (insert scary music here). As soon as I saw the bills, I called the hospital, knowing that they have a discounted rate if you pay your full balance soon after the date of the bill. I was able to score a 25% discount, but had to pay it then. I put it on my Discover It card, which has a 0% promo interest rate for a while (since I just got the card in April). I could have paid it out of my emergency fund, but I thought it would be just as easy to do it this way. What do you guys think? Boyfriend will just make the payments to me and I will pay off the balance as he pays me. I know it will get paid, since we have lived together for nearly a decade and he has never not paid me back for anything, but I am still a little unsettled about carrying a balance. I assume I will see a drop in scores temporarily for utilization. Can I expect any other side affects from this?

Answer 1

Annipoo wrote:
I assume I will see a drop in scores temporarily for utilization. Can I expect any other side affects from this?It mainly depends on the impact to your utilization though there may be a small hit for having a balance report on a card that was previously not reporting a blaance.  That said, unless you were paying the card down to 0 prior to report date it was reporting a balance even if you were paying in full.  Payments made after the report date but by the due date do not reduce the reported balance since the balance had already reported. You can do the utilization math to see how much your overall and individual utilization would change but we can't tell you that you'd see an impact of X points. You'll lose your grace period but if you have 0% on purchases that doesn't matter.  If you were subject to interest you'd have to deal with residual interest even after paying it off.  However, neither of those directly affect score.  The impact would be to utilization.  "Utilization has no memory" is quite often stated here but bucketing is possible and it does happen to some.  It's not "memory" per se but it does mean that it can take a little while for the reduction in utilization to show its effect. Annipoo wrote:
I could have paid it in cash, but I thought, why take money out of savings (where it is earning interest) when I could put it on Discover for 0% and also get the 2% cash back? Was my reasoning wrong?Nope.  Your savings is probably not accruing that much interest but it's more than the 0% you'd be charged on your Discover and it's probably less than the 2% you'd get with charging it on Discover.  If you didn't have 0% then it would probably make more sense to rely on a liquid cash reserve.