If you keep the credit card balance zero, then be careful, you may have this loss

The use of credit cards is increasing continuously. Many people keep their credit card balance zero, but they do not know about the loss due to it. Let me tell you about it.

The use of credit cards is increasing and many people use it. There are many people who keep their credit card balance zero. But they do not know about the damage caused by it. By doing this, the credit score can go negative and you may find it difficult to get an auto loan or personal loan in future. So you should know about it.

The balance becomes zero at the end of the month when the entire credit card limit is spent. This affects your credit score. It is believed that the card holder is too expensive and the account of the card may also become inactive. With zero balance, it is also believed that the cardholder is facing some financial problem.

The effect of having zero balance In case of
credit card balance, banks can reduce the credit limit because they feel that the cardholder may default in future. Lowering of 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 percent. 

Be careful in spending with credit card The
credit utilization ratio can be understood through an example. Suppose your credit card limit is 1 lakh rupees and you spend 30 thousand rupees every month then it is good. But spending more than this can affect your credit score. If this ratio is less than 30 percent, then the credit score improves. That's why you should spend your credit card wisely.