What Is a Maxed Out Credit Card?
A maxed out credit card is a card that has a balance equal to or higher than its credit limit. Maxing out your credit card can cause credit score damage, as credit utilization – the ratio between your credit limit and statement balance – is an important factor in determining your credit score.
There are no direct costs associated with maxing out your credit card (unless you go over your credit limit), but you won’t be able to use your card again until you make a payment and free up some of your credit line. Maxing out your credit card can also signal to lenders that you are a risky candidate to borrow, which can make it harder to get approved for credit products in the future and lead to less favorable terms.
What Happens When You Max Out Your Credit Card?
When you max out your credit card, there are several different consequences you’ll have to deal with. None of them are good news.
1. You Won’t Be Able to Make New Purchases
Once you hit that wall, only making a payment or increasing your credit limit will enable you to make purchases with your card moving forward. This can put you in quite the predicament if you aren’t prepared.
This is actually one of the reasons we do not recommend no preset spending limit credit cards, whose spending limits are determined on a monthly basis and are not communicated to the user. You could find yourself suddenly left with no available credit with no warning.
2. Your Minimum Payment Will Increase
The more you charge to your card, the higher your required minimum payment will be when your monthly credit card bill comes around. Depending on your financial situation, you might have trouble making this payment after maxing out your card, which could then lead to late fees.
3. Your Credit Score Will Go Down
Your credit card issuer will relay news of your maxed out status to the major credit bureaus in the course of its normal monthly account information update. This information will then be incorporated into your credit reports and factored into your resulting credit scores.
This assumes that you do not make a payment prior to the end of your monthly billing cycle, though. If you do so, you’ll minimize any resulting credit damage since the only balance that gets communicated to the credit bureaus is what remains when your monthly statement is generated. In other words, you can max out your card for a big purchase you’ve saved for and then pay all or most of it off before the end of the billing cycle, and your reported credit utilization will be a lot lower.
4. You’ll Likely Owe Interest
Unless you have a very high income, maxing out your card will likely make it very difficult for you to pay your entire balance in full by your monthly due date. Any balance you don’t pay in full by the due date will start to accrue interest, which can add up very quickly.
The average regular APR on a credit card offer is 22.76%, according to our research. Credit cards are not a good way to finance purchases long-term unless you have a card with a 0% introductory APR.
5. Your Interest Rate May Increase
Depending on the issuer, maxing out your card may trigger the penalty APR (at least for future transactions). Considering the average penalty rate is currently 27.46%, that could potentially make future transactions very costly.
6. You May Owe an Over-Limit Fee
If you’ve opted in to the ability to go over your credit limit, you’ll be able to spend slightly more than just maxing out your card. This will trigger an over-limit fee and will likely cause future purchases to be subject to the penalty APR as well.
To learn more, check out WalletHub’s guide on what happens if you go over your credit limit.
What to Do After Maxing Out a Credit Card
If you’ve already maxed out your credit card, there are several things you can do in order to restore your spending power and make sure important transactions go through in the future.
Pay Your Bill
This will restore at least some of your spending power and potentially prevent your utilization ratio from being reported to the credit bureaus as 100%, depending on when you pay and when your billing period ends.
Your payment will free up an equivalent amount of your credit limit and reduce your future interest, so paying as much as possible is ideal.
Make Sure Scheduled Payments Go Through
Depending on when you hit your monthly limit, there’s a chance that any payments you had scheduled to be made from your credit card account – important bills, Netflix, Spotify, etc. – might not have gone through. It’s thus a good idea to double check your status in order to avoid service interruptions and late fees.
If you maxed out your card before these scheduled transactions were set to happen, you’ll need to choose one of the following options:
- Free up some of your credit limit by making a payment to your credit card issuer
- Switch the scheduled transactions to a different payment method
- Cancel the transactions altogether if they’re nonessential and you can’t afford them anymore
Transfer Your Balance
One way to avoid interest after maxing out your card is to transfer the balance to a card with a 0% introductory APR. This can give you anywhere from 6 to 24 months to pay off the balance interest-free.
There are two downsides to balance transfers, though. The first is that you’ll likely need a good or excellent credit score to qualify for a solid balance transfer card. The second is that you’ll typically have to pay a balance transfer fee of 3% to 5% of the amount transferred, which can be a lot of money when you’ve maxed out your card.
You could also consider getting a lower interest rate on your balance through a debt consolidation loan. It won’t be 0%, but it could be significantly lower than your current credit card’s APR.
How to Avoid Maxing Out Your Credit Card
You’ll never have to deal with the consequences of maxing out your credit card if you simply avoid the situation in the first place. There are quite a few strategies you can use to reduce the likelihood that you’ll ever have to max out your card.
- Ask for a Higher Limit: This will enable you to supplement your spending power and reduce your per-card credit utilization. You stand a good chance of getting a credit limit increase if you’ve made at least your last six consecutive monthly payments on time. Keep in mind that if you have a secured card, you can simply add to your deposit to increase your spending power.
- Know Your Limits: A maxed out credit card can easily sneak up on someone, especially those who are relatively new to credit and thus have low credit lines. Three-to-five hundred dollars can go very quickly these days, so planning is essential. You need to start each month with a clear idea of how much credit you have available as well as how much cash you can afford to spend.
- Stick to a Budget: Once you have a clear idea of your monthly income and a list of your expenses, you can carefully allocate these funds first to necessities like food, health insurance and rent payments, then to debt payments and savings, and finally to non-essential expenses. Only charge to your card what you can afford to pay off based on your budget. WalletHub’s budgeting tools can help you plan.
- Pay More Than Once: There’s no reason not to submit multiple monthly payments. This will enable you to keep your utilization consistently low, avoid missed payments and recognize dangerously high spending patterns.
- Keep Track of What You Buy: Keeping a running tab of your recent expenses will enable you to foresee a potential maxed out card and plan accordingly. You can easily see and print a list of your latest credit card transactions through your online account. You can also sync your financial accounts to WalletHub Premium to monitor your transactions, track your budgeting progress, and receive alerts about suspicious purchases or overspending.
- Use Cash: While using cash (or a debit card) means forfeiting potential rewards earnings and essentially subsidizing the purchases of credit card users, it can be helpful in the face of a low credit limit or if you’ve run into trouble with overspending in the past. Reevaluating whether certain automatic monthly payments need to be made with plastic will also be beneficial.
- Apply for a New Credit Card: If you have enough money to afford higher monthly credit card bills but your current card’s issuer won’t give you a credit limit increase, you could consider applying for a new card to spread your monthly expenses across two accounts and keep your utilization down on each. You can browse 2025’s best credit cards here on WalletHub.
When It Makes Sense to Max Out a Credit Card
While it would be easy to take a hard line and say that maxing out your credit card is never, ever okay, we at WalletHub live in the real world. We recognize there are certain situations when maxing out your plastic may actually be beneficial, especially if you do not have anything like a car or house purchase coming up. There’s no reason to obsess over your credit score if no one will be checking it for the foreseeable future.
It might make sense to max out your credit card if you:
1. Make an Early Payment
If you pay off all or most of your credit card bill before your billing period ends and your issuer generates your monthly statement, it doesn’t matter if you’ve maxed out your card at any point during the month. Only the balance on the last day of the billing cycle gets reported to the credit bureaus.
2. Have Very Low Credit Limits
Credit card newcomers have almost no choice but to max out their credit cards if they have a spending limit of only a few hundred dollars and rely on plastic for everyday purchases.
3. Face True Emergencies
You shouldn’t give a thought to credit utilization in the face of a true financial emergency, such as a medical emergency, repairs to your ride to work, or legal services. That said, there may still be cheaper ways to borrow money, such as asking a friend or relative for help.
4. Consolidate Your Debt
The rise of introductory 0% credit card rates has made it quite popular to transfer debt from a high-cost loan or line of credit in order to save on finance charges and pay down the principal faster. For example, the average household could save about $2,800 over a two-year-period on their roughly $11,000 credit card balance by transferring it to one of the best offers on the market. If you’re able to use a 0% rate to pay down your debt faster, temporarily high credit utilization should be an easy pill to swallow.
A credit card calculator will help you figure out how much to pay every month in order to become debt free. It can also help you find a credit card that will maximize your savings.
5. Get Valuable Rewards
Credit card companies are currently offering extremely lucrative initial rewards bonuses. For instance, the best rewards cards on the market offer $600+ bonuses to new customers who spend at least $3,000 in the first three months their accounts are open.
Such value is likely worth having a maxed-out credit card for a few months, assuming you don’t need your credit score to be pristine for something like a mortgage application in the near future.
Ask the Experts: Taking It to the Max
For more insights into the inner-workings of the credit card industry, including how to avoid and deal with maxed out credit cards, we posed the following questions to a panel of leading personal finance experts. You can check out their bios and responses below.
- What other financial difficulties might a maxed out credit card signify?
- Where would you rank a maxed out credit card in the pantheon of consumer financial mistakes?
- What is the best way to deal with a maxed out credit card?
- Are maxed out credit cards less worrisome for students and people with damaged credit who might not have high credit lines to begin with?
Ask the Experts
Graduate Assistant in the Literacy in Financial Education Center at Eastern Illinois University
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Director of Technology, Information and Operations at East Carolina University, College of Business
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WalletHub experts are widely quoted. Contact our media team to schedule an interview.