{"id":355594,"date":"2017-11-22T17:00:19","date_gmt":"2017-11-23T00:00:19","guid":{"rendered":"https:\/\/www.creditrepair.com\/blog\/?p=355594"},"modified":"2019-04-25T15:43:55","modified_gmt":"2019-04-25T21:43:55","slug":"how-exceeding-a-credit-card-limit-affects-your-credit","status":"publish","type":"post","link":"https:\/\/www.creditrepair.com\/blog\/credit-card\/how-exceeding-a-credit-card-limit-affects-your-credit\/","title":{"rendered":"How Maxing Out Your Credit Cards Affects Your Credit"},"content":{"rendered":"

\"Credit<\/p>\n

Credit cards have limits for a reason, and exceeding yours is harmful to your overall credit health.<\/p>\n

While everyone occasionally finds themselves with an emergency bill that requires stretching finances, it\u2019s better in these situations to find alternative payment methods to credit cards<\/a>, rather than exceeding your credit limit<\/a>.<\/p>\n

Otherwise, your credit could very well suffer.<\/p>\n

Credit utilization<\/strong><\/h2>\n

The amount of credit card debt you carry is closely linked to your credit health. Credit utilization<\/a> is a ratio that compares your total debt to your overall credit limit. It\u2019s an important number to pay attention to, as it accounts for around 30 percent of your credit score. For optimal credit health, the your total debt should be below 30 percent, and ideally 10 percent or less<\/a> of your overall credit limit.<\/p>\n

Maxing out your credit cards can ding even good credit scores by up to 45 points, and exceeding your credit limit can be even more harmful. According to the folks over at FICO<\/a>, regularly exceeding 100 percent credit utilization (meaning going over your credit limit) could mark you as a high-risk borrower, and make lenders think twice about extending credit to you.<\/p>\n

There are other penalties to exceeding your credit limit as well. Your account could be closed, or your credit limit could be lowered \u2014 which would result in your balance being even further over the new limit. You could find your interest rate \u2014 and therefore, your minimum monthly payment \u2014 increased, making your debt harder to pay back. And if you\u2019re late in making these payments, your credit could be damaged even further<\/a>.<\/p>\n

How to exceed your credit limit<\/strong><\/h2>\n

Here\u2019s the good news: most credit cards won\u2019t just allow you to exceed your credit limit. Thanks to the CARD Act, credit card issuers can only allow consumers to exceed their limits if the consumer opts in<\/a> to such an option and sets a limit on over-the-limit fees (fees are generally $25 the first time and up to $35 the second). Unless you\u2019ve opted into an over-the-limit program, your card will likely be declined if you are about to make a purchase that would exceed your limit.<\/p>\n

However, it\u2019s worth noting that one way to exceed your credit limit without actually making a purchase is by accumulating interest or late fees. If you\u2019re already close to maxing out your card, these fees could very well put you over your set limit. This is why it\u2019s a good idea not let your debt get that close to your credit limit.<\/p>\n

What to do to avoid exceeding your credit limit<\/strong><\/h2>\n

The first and most obvious option is not to opt into over-the-limit programs. However, some people may feel that they need the financial safety net in case of emergency situations. If you do opt in and end up exceeding your credit limit, make sure to pay off the balance as soon as possible. If you pay it off before your next billing date, it\u2019s possible that your card company won\u2019t have reported it yet to the three major credit bureaus, which means there\u2019s a good chance it won\u2019t be reflected on your credit report. (Check with your credit card company to learn how it reports going over your credit limit.) Finally, if you find yourself in a cycle of debt that you can\u2019t get out of, consider consulting a credit repair expert<\/a>.<\/p>\n

Credit repair isn\u2019t just for those with bad credit. Working with a professional can help you monitor your credit and ensure that it remains good going forward. It can also help you to more quickly identify, and fix, problems or errors on your credit report that can lower your score.<\/p>\n

If you\u2019d like to learn more about how you can benefit from working with a reputable credit repair expert, contact CreditRepair.com<\/a> today.<\/p>\n

Carry on the conversation on our social media platforms. Like and follow us on Facebook<\/a> and leave us a tweet on Twitter<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Credit cards have limits for a reason, and exceeding yours is harmful to your overall credit health. While everyone occasionally finds themselves with an emergency bill that requires stretching finances, it\u2019s better in these situations to find alternative payment methods to credit cards, rather than exceeding your credit limit. 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