If you end up maxing out your credit card there are a few things you should know that is going to happen but it's not going to be the end of the world because you can always dig yourself out.

I just want to tell you what does happen when you max out your card 2022. 


What Happens When You MAX OUT Your Credit Card?

now the first thing I want you to understand and i don't quite know why it works this way but your credit card limit is more of a guideline rather than a set rule.

because a lot of credit cards out there if you spend over your credit card limit you can actually do that up to a certain amount of money before your credit card declines.

how much money that is i have no idea because it changes based on all the different customers out there but i have seen it happen in real life where you can go over your max limit before your credit card declines.

so even though in some cases you can still use your credit card just a little bit past the limit this doesn't mean that it's a good idea to do that. because eventually, your card is going to decline. This is What Happens When You MAX OUT Your Credit Card?

now obviously this would be a lot more simple if let's say you have a 7 000 limit and you spend 699 bucks then obviously once you get past 7 000 you would just expect your car to decline. 

but if it doesn't always work like that then you don't quite know when it's going to decline.

so if you're out there you're buying groceries or something like that the last thing you want to have happen is to have your card decline and not have another payment source. 

because otherwise you've done all that work with the grocery shopping and you can't buy the groceries.

so don't max out your credit card just for this one reason alone because eventually the card is going to decline.

i also want you to know that if you do max out the credit card the apr rate that your credit card charges is technically a variable rate.

inside the terms it always says that it can vary based on your credit worthiness and so i don't really know if your apr is going to go up.

if you max out the credit card but based on their terms and under their discretion you technically could have a higher apr rate just because you've maxed out your credit card because technically it is affecting your credit score negatively and that's what i'm going to go over next.

so basically there's a huge chunk of your credit score that's affected by how much credit you're using versus how much credit you have available.

so if you're spending a lot on your credit card that can affect your credit score negatively because of the way that all this stuff works.

because if you end up maxing out your credit card you are going to affect your credit score in at least three different areas because we're talking credit usage this is going to be 20 of your score available credit this is just 3 percent and then you've got another 11 and what's called total balances.

so all of these actually have to do with how much you're spending versus what your limits are and obviously using a credit card affects all of these.

now what you need to understand is that all of those categories are affected by what's called your credit utilization score.

this is very easy to understand because all it is is basically how much you're spending on the credit card versus what your limit is.

so if your credit card's limit is ten thousand dollars and you use up nine thousand dollars of the limit then your utilization score is going to be ninety percent and this is going to affect your credit score negatively because they want your utilization score to be below 30 percent.



so basically anything above 30 percent is gonna hurt your credit score and anything below 30 is going to help your credit score.

so keep low balances on your card and you're going to have a good utilization score.

but obviously if you max out your credit card then you really are going to affect your utilization score in a bad way.

So that's it for today, now I think you understand What Happens When You MAX OUT Your Credit Card?.

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