If My Credit Card Balance Is Zero, Do I Still Have To Pay?

A good rule of thumb regarding credit cards is to owe as little as possible. That’s because any balance left on your card at the end of a billing cycle is subject to interest, and credit card interest is expensive. According to October 2023 data from the Federal Reserve, the average APR on a credit card account that was assessed interest was 22.77% in August 2023.

If your credit card balance is zero at the end of your billing cycle, you won’t owe any interest. By comparison, let’s say you have a $10,000 balance at the end of your billing cycle; at 22.77% interest, you’ll owe an additional $183.85. And that number will only increase with each billing cycle you carry a balance. So, a zero balance is a good thing for your bottom line.

Read more: See what you’ll pay in interest with our credit card interest calculator.

In general, even if you aren’t actively using your credit card and you have a zero balance, it’s still a good idea to keep the account open. That’s because the credit limit on each card you have counts toward your overall credit utilization ratio. Credit utilization, which is the amount of credit you’re using in relation to the amount of available credit you have, makes up 30% of your credit score and opening and closing cards can have a significant impact on your credit standing for this reason.

Here’s an example of how credit utilization works:

Suppose you only have one credit card, with a maximum credit limit of $10,000, and you charged $5,000 to the card without making any payments. In this case, your utilization is 50% of your total available credit.

Now, imagine you have two credit cards, each with a maximum credit limit of $10,000, and you charged $5,000 to one of the cards. Your utilization in this scenario is 25% of your total available credit.

If you close a credit card that has a zero balance, you have that much less credit available, and it’s likely to have a negative impact on your overall credit utilization.

If your main reason for closing the card is that you no longer want to pay the card’s annual fee, consider a product change. A product change is when you request a different card, or product, from the same bank. In this scenario, you would request to downgrade a card with an annual fee to another card without an annual fee from the same issuer. Not every card is eligible for a product change, and you may not be able to product change from the card you have to the card you want. But if you can convert your existing card to a no annual fee version, you can preserve your credit limit and not impact your credit utilization.

It’s a myth that carrying a small balance on your card can help your credit score. If possible, you should pay your bill in full on time, every time. If you find it easier to manage your spending on a card by paying off a purchase each time you use it, there’s nothing wrong with doing so. Others may find it simpler to make one payment at the end of the billing cycle when they get their statement. Both methods are fine, but choosing to pay only part of your bill means you’ll likely be charged interest on your card, which is costly.

Carrying a balance from month to month repeatedly can have a negative impact on your score, as interest can turn a once manageable payment into a debt burden over time. Missing a payment or paying late is also never a good choice, as your payment history makes up 35% of your credit score, and a missed or late payment can drag down your overall score.

If your balance is zero because you use your card and pay any balance off in full at the end of every billing cycle, you can keep the card indefinitely. But if your account remains inactive for some time with a zero balance, the issuer may cancel your account.

Credit card companies can cancel your card without any advance notice, and there’s no set period of time a card account has to remain inactive for an issuer to close it. A good rule of thumb is to try to make at least a small purchase on the card every few months or have a recurring subscription or bill charged to the card to keep the account active.

When your credit card balance is zero, that means there is no payment due. Keeping a zero balance is a sign that you’re being responsible with the credit extended to you. As long as you keep utilization low and continue on-time payments with a zero balance, there’s a good chance you’ll see your credit score rise, as well.