Should I really pay off my entire credit card balance each month or should I maintain some balance?
You should pay things off every month.  You don't want to be paying 10%-25% interest if you don't have to.  If you regularly use you card, the credit agencies can't tell the difference.  The way it works is that every month, they send the credit agencies your current balance and if you paid the last bill on time.  There is nothing that indicates if this is a standing balance, or if you charged all of it since the last payment. Any business that you legitimately owe a debt to can report that to the credit agencies.  Not all of them do.  This includes utilities, cell phone companies, landlords, etc. If any of them report overdue items it will show up on your credit report, and your credit card company can use that to raise you interest rate. Some cards will automatically raise you credit limit.  They are basically looking to make money fro you.  If you often charge near the limit, and pay the minimum balance each month, they may raise your limit to get you to charge more, and pay more interest.  You can also call them and ask.  They have some internal rules to decide if, based on your history with them and your credit history, if you are a good risk. I think you got the message mixed up a little: Racking up big balances can hurt your scores, regardless of whether you pay your bills in full each month.   What's typically reported to the credit bureaus, and thus calculated into your scores, are the balances reported on your last statements. (That doesn't mean paying off your balances each month isn't financially smart -- it is -- just that the credit scores don't care.)   You typically can increase your scores by limiting your charges to 30% or less of a card's limit. -- from 7 Ways to Fix Your Credit Score In other words, ALWAYS pay off your balance if you can. But don't fill up your card to the max of your credit limit each month. i.e. if your credit limit is $5000, only spend $2000 each month. Always pay on time, and stop listening to whoever is telling you not to -- they are clueless. Credit cards are revolving accounts with a grace period. The balance owed is due on the statement date, and you have a grace period of 20-40 days to pay.  Paying bills on time is the single most important thing that you can do to have a good credit score. Always pay on time.
I recently paid off a line of credit on an investment property that I own.  I had some surplus cash and decided to pay off the line of credit rather than to make a principal payment on the primary mortgage with a higher interest rate.  The interest rate on the line of credit was tiny and the balance was also pretty low. My reasoning was that by paying off the line of credit I would be done with that account and would have one less bill to pay each month, one less risk of something going wrong and a late payment hurting my credit, one less statement to reconcile each month, and one less bookkeeping core to manage.  I could have grown my net worth by few couple of dollars each month had I kept the line of credit and made a principal payment on the primary loan. I judged that it wasn't worth the hassle and risks. "It can be difficult when all your disposable income is spoken for.  Your options depend on how good your credit is and how flexible your expenses are.  I don't have all the answers without more details (possibly not then).  However, couple of points of advice: Paying off that credit card debt (and not adding any more to it) is your #1 priority.  You should make minimum payments to every other debt until you have done that because the interest on it will kill you in the mean time.  It is always optimal to pay the maximum to your highest interest debt and minimum to all other debts. 11% doesn't sound very good on your house loan.  You may want to consider refinancing.  That is, if you can get a lower rate.  You may also want to get a longer term loan (if you have enough discipline to use the extra income to actually pay off your credit card and then the put it toward the house when the cards are paid off). Look at options to increase your income, at least temporarily.  Second jobs and such.  When your finances are more in order, you can back off. The debt ""trap"" is behavioral.  We humans tend to increase our spending until we can't any more.  But the reason we can't spend any more is that we have increased our debt until we have no flexible income.  Then we are stuck for a long time and have few options. The only way out (long term) is to change our habits so that we don't increase spending each time we pay down a debt or get an increase to our income.  Financial discipline is the only way to have financial security.  Almost always the first step is to pay off credit cards and stop maintaining a balance (always pay off every card at the end of each month).  Then start paying off other debts from highest interest rate to lowest. This is a hard challenge and one most of us face at some point in our lives.  Good luck!" To confirm: you say you have credit card debt of $18,000 with min. repayment of $466.06, plus on top of this you are also paying off a car loan and another personal loan. From my calculations if your monthly interest on your credit card is $237, the interest on your credit card should be about 15.8% p.a. Is this correct? Balance Transfer If you did a balance transfer of your $18,000 to a new credit card with 0% for 14 months and keep your repayments the same ($466) you would have saved yourself a bit over $3020 in interest over those 14 months. Your credit card balance after 14 months would be about $11,471 (instead of $14,476 with your current situation). If your interest after the 14 months went back to 15.8%  you would be able to pay the remaining $11,471 in 2.5 more years (keeping repayments at $466), saving 10 months off your repayments and a total of $4,781 in interest over 3 years and 8 months. The main emphasis here is that you are able to keep your repayments at least the same so you are able to pay off the debt quicker, and that your interest rate on the new credit card after the 14 months interest free is not more than your current interest rate of 15.8%. Things you should be careful about if you take this path: Debt Consolidation In regards to a Debt Consolidation for your personal loan and credit card (and possibly your car loan) into a single lower interest rate loan can be a good idea, but there are some pitfalls you should consider. Manly, if you are taking out a loan with a lower interest rate but a longer term to pay it off, you may end up paying less in monthly repayments but will end up paying more interest in the long run. If you do take this course of action try to keep your term to no longer than your current debt's terms, and try to keep your repayments as high as possible to pay the debt off as soon as possible and reduce any interest you have to pay. As you already have you credit card and personal loan with CBA talk to them to see what kind of deal they can give you. Again be wary of the fine print and read the PDS of any products you are thinking of getting. Refer to ASIC - Money Smart website for more valuable information you should consider before taking out any debt consolidation. Other Action You Can Take If you are finding that the repayments are really getting out of hand and no one will help you with any debt consolidation or reducing your interest rates on your debts, as a last resort you can apply for a Part 9 debt agreement. But be very careful as this is an alternative to bankruptcy, and like bankruptcy a debt agreement will appear on your credit file for seven years and your name will be listed on the National Personal Insolvency Index forever. Further Assistance and Help If you have trouble reading any PDS, or want further information or help regarding any issues I have raised or any other part of your financial situation you can contact Centrelink's Financial Information Service. They provide a free and confidential service that provides education and information on financial and lifestyle issues to all Australians. You mentioned you have a bunch of credit cards with no balance, while others have fairly high balances I would not recommend you to close the 0 balance credit cards if they have lower APR. You can transfer the balance to those cards with lower APR. Now, if those 0 balance cards do not have lower APR, closing them will reduce my overall balance and hurt my credit rating and that is true, assume that you mean overall credit line instead of overall balance. But to my understanding, if you keep the payments good and on time, that effect is only temporary, and therefore you can definitely close them.  Don't forget, paying off your balance can also lower your utilization rate and therefore increase your credit ratings, and you can focus more on that instead. Also larger number of accounts with amounts owed can indicate higher risk of over-extension, therefore you should pay off your low balance accounts first, and do not open new credit accounts until you have paid off the current balance. "You don't need to have a bunch of credit cards lying around; just a couple is fine. Get a ""rewards"" card (without annual fee) that pays you back for use, and use it regularly to buy groceries, for example. Pay it off promptly each month, using the rewards, if you like, to reduce the amount you have to send in. Or you can use the rewards for other purchases; some merchants offer $25 worth of merchandise for $20 in rewards. It used to be the case that you could negotiate a discount for paying cash rather than use a credit card, but that is a lot harder to do now, in many cases because credit-card company contracts with merchants prohibit this practice. Also, merchants often prefer credit cards rather than cash because money-handling is an issue (pay for an armored car to come pick up the day's receipts, or risk getting mugged on the way to the bank, possible burglaries if you leave the money overnight in the store, daily balancing of cash-register trays, etc.) So, not being in debt and being rich enough to not need to be in debt are laudable goals, and you have my best wishes that you will reach them soon, but getting rid of all your credit cards as a part of not being in debt may be more trouble than it is worth. Keep a couple, pay them off promptly, and if you are concerned about being in debt, you can time your charges so that you are in debt at  most 2 or 3 days each month." If you pay it off before the cycle closes it will look like you have 100% available credit.   So if you credit card statement closes on the 7th pay it off on the 6th in full don't pay it when its due 2/3 weeks later. Then after three months of doing that your credit score will go up based on the fact that your debt ratio is so low.  That ratio is 30% of your credit score.  It will help quite alot. Yes. You can pay towards your credit card before the actual bill becomes due every month. However, your credit usage ratio does not get sent to credit reporting agencies exactly on the day of your bill; this data can be sent to the agencies any day of the month. So, keep your balance low at all times throughout the month, not just right before your statement closing date. I'm not asking if I should carry a balance to the end of the billing period and accrue interest Typically (I say typically because there may be some fringe outlier exception product that begins accruing interest immediately), if you're not carrying a balance already you will not be charged interest for carrying a balance during the billing period.   You accrue a balance, you're issued a statement, if you pay the statement before the due date indicated you don't pay interest; even if your statement balance is less than the current actual balance on the account.  If you carry a balance through that due date you begin to accrue interest.  Not only on the balance carried but on all new charges as well.  But as long as you consistently pay your statement balance before the statement due date you will not be charged any interest. As for a reason why you may want to take advantage of this, simply to ease the administration of your finances.  You just don't need to touch the accounts that frequently to avoid interest charges.  Sure you can let your money sit in an interest bearing account and earn a couple dollars a year but really, you just don't need to focus on your CC charges this frequently.