John Miller, Credit Cards Moderator
@john_miller
No, it is generally not good to max out a credit card and then pay it off. Credit card companies typically report your balance to the credit bureaus at the end of the billing cycle. Even if you can manage to pay the balance before it’s reported to the bureaus, it’s still recommended that you do not spend up to your credit limit on a card.
Once the card is maxed out, you won’t be able to make any more purchases until you free up some available credit. This may take some time, depending on when you plan on making your payment, which can render your card useless in case of an emergency or unexpected expense. Plus, if something happens and you’re unable to pay as scheduled, you can risk damage to your credit or you may have to carry a high balance from month to month, which can end up costing you in interest.
Instead of using all the credit limit on a card, consider spreading out the charges on multiple cards. This way, you can ensure a lower credit utilization rate across the board, even if you don’t manage to pay in full as planned. You can also consider asking for a credit limit increase if your expenses are high and you can’t manage to keep a low credit utilization.
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