A packet-based traffic shaping system including a scheduler that forwards packets in accordance with a scheduling algorithm from queues that have at least a minimum good credit rating. The minimum good credit rating is not dependent on the size of a packet that is to be forwarded. Rate shapers associated with the queues reduce credit by transmission costs associated with the packets and restore credit incrementally over time. When a queue is empty, credit does not accumulate above an idle credit value at the associated rate shaper. When a packet is enqueued in a queue that has been idle for a period of time, the packet is forwarded without undue delay.