A credit card with zero balance simply means that the card has no dues that need to be paid to the bank. Paying off your credit card balance in full on or before the due date brings the outstanding balance to zero. This is a good practice as it can help in boosting your credit score. This is because credit card companies usually send your credit status to the credit agencies at the end of a payment cycle. At the time of the credit card company reporting your balance to the credit agency, your balance is zero. This keeps your credit utilisation ratio low, thereby boosting your credit score.
Besides boosting your credit score, maintaining zero balance on your credit card is beneficial in several other ways:
It helps you use your card for daily purchases without incurring any interests.
You can avail the rewards, loyalty points and cashback offers on the card, without being charged for it.
Your on-time payment record acts as proof of you managing credit responsibly, which helps you increase your credit score and credit worthiness. This works in your favour, while applying for loans.