Maxing Out Your Credit Card: What to Expect When You Go Over Your Credit Limit?

Friday, January 26th, 2024
Updated: January 26th, 2024
The content is accurate at the time of publication and is subject to change.

When it comes to obtaining а new line of credit, whether it’s a credit card, personal loan, mortgage, or any other way to borrow money, one of the most crucial aspects is the credit limit.

Credit limit is the maximum amount you can charge on a particular credit card or other type of credit account. It’s determined mainly based on your credit score, personal income, and payment history. If you have a good credit history and a high income, you will likely get approved for a higher credit limit, which gives you more purchasing power. Standard personal credit card limits usually start at $500 and go up to $15,000. However, some cards have no preset limit or set it up to $100,000. But even with a high limit, it’s not a good idea to use it all.

How does a maxed-out card affect transactions, credit scores and payments?

When you go over the credit limit on a credit card for one reason or another, it’s maxed out, meaning that there’s no credit available for purchases or other transactions until you reduce your balance.

Hitting the limit on your credit card can be a stressful situation. It doesn’t spell the end of your personal finances, but it can put you in a tough spot. Below are some major consequences of maxing out your credit cards:

1. Declined transactions

When you reach your credit limit, you typically don’t have any room for spending. Depending on the issuer and your credit profile, credit card issuers may decline a transaction. This can be frustrating, especially if you need to use the card for emergency expenses. Your card will be practically useless, until you start paying off the balance.

With other lenders, you may go over your credit limit without worrying about your card being declined. However, do keep in mind that credit card issuers may approve transactions made on a maxed-out card but charge what’s called an over-limit fee. So be sure to check with your lender about all the terms of its over-limit coverage program before you enroll.

2. Credit score drop

Another result of maxing out a credit card is the impact it can have on your credit scores.

Reaching or even exceeding the limit on a credit card affects your credit utilization ratio, or the amount of credit you’re using compared with the amount of credit you have available. Credit utilization is among the major factors that significantly impact your credit score. And most financial experts recommend keeping credit utilization below 30% to maintain a healthy credit score.

3. Increased minimum payment

The minimum payment is the smallest amount you must pay each billing cycle to avoid penalties and fees. Credit card minimum payments are usually calculated based on your monthly balance. So, if you max out a credit card, your balance will go up. That, in turn, can raise your minimum monthly payment.

Moreover, for large unpaid balances, minimum payments may be calculated at a fixed percentage, such as 2%. Credit card companies may ask you to pay the amount by which you’ve gone over your limit, or even require to pay the entire balance. It is also possible that you may be asked to pay immediately rather than on your normal due date.

4. Penalty APRs

Your monthly payment may increase in another way. If you fail to pay the monthly minimum for 60 days, your credit card issuer will replace your current APR with a higher penalty interest rate. This will increase how much you owe and can make it difficult to get out of debt.

What can you do to get back on track?

If you’ve maxed out your credit card limit, try to pay it off as soon as possible. If you pay your balance in full each month and have outgrown your credit limit, you may want to consider a credit limit increase or a new card.

• Use debt payment methods

If you’re unable to pay off your credit card balance in full every month, two popular methods of paying off debt could help.

The snowball method involves making at least the minimum payments on all of your accounts. You’ll start by settling your smallest debt first, followed by the next-smallest debt, and so on, until you are debt-free.

The debt avalanche method works just the opposite way – you try to pay off the highest-interest debt first, but still make at least the minimum payments on other accounts. When you’ve paid off that highest interest rate, you move on to paying off the next-highest interest rate debt.

• Consider debt consolidation

When you feel trapped, you may want to consider credit consolidation. This allows you to combine debts into a single monthly payment ideally at a lower interest rate than what you’ve been paying. You can consolidate your debt from different credit cards into a personal loan that typically offers a lower interest rate.

• Set up balance notifications

Some credit card issuers automatically send a text message or email when you reach a certain balance on your card. Check with your card issuer or look through the settings in your online account to see if you can have these alerts so you don’t exceed your credit limit.

• Avoid overspending & keep your balance as low as possible

When you’re trying to get control of your finances, avoiding overspending could be a good place to start. Also, keeping your balance below 30% (or even better, below 10%) of the credit limit will help to improve your creditworthiness and keep you from going over your limit.

Tags: ,

All rates and fees, and other terms and conditions of the products mentioned in this article/post are actual as of the last update date but are subject to change. See the current products' Terms & Conditions on the issuing banks' websites.

Latest Other Card Guides

How to keep your money safe? Common types of bank accounts November 16th, 2023

Bank accounts offer a convenient and secure place to store cash and build savings. Savings and checking accounts are the most well-known types of bank accounts, but there are actually other options that financial institutions commonly offer. There are different types of bank accounts that can fit specific needs. Apart from Checking and Savings Accounts, […]

Continue »
The best alternative to payday loans: a Paycheck Advance Apps overview September 26th, 2023

If you need to make ends meet before your next paycheck, fast cash options like payday loans or installment loans are not your only options. Paycheck advance apps have been booming in the financial services industry in recent years, and the idea of an app that allows you to borrow money with low or no […]

Continue »
How to cope with the over-budget holiday debts? December 28th, 2022

The holiday season is a time when many Americans spend big on dearest friends, relatives, and themselves. During the festive fuss and buzz, it’s easy to fall into the urge to spend and buy more than you can afford. However, if you don’t want overspending to set you back financially in the new year, here’s […]

Continue »
What Are Electronic Payment Methods and How Do They Work? October 10th, 2022

If you frequently make online payments but remain concerned about your sensitive bank account details, virtual credit card or digital wallet services can give you the added layer of protection you need. A virtual credit card (VCC) is an online only version of your debit or credit card. It’s not a physical card, but a […]

Continue »
How Closing a Credit Card Affects Your Credit Score April 6th, 2022

Each of us probably has a credit card in the back corner of your wallet that you haven’t used for a long time. And more than once you may have thought about whether you should cancel that card. But closing a card might not be the smartest thing to do, as this move could certainly […]

Continue »
Best Credit Offer
Destiny Mastercard®
Check off the cards you want to compare. Then click the Compare link to go to the comparison table.
Consumer Rating: 4 / 5
Horizon Card Services Group One Freedom Card
Copyright © 2001-2024 All Rights Reserved.

See the credit card's terms and conditions on the online application page. Note that this website may be compensated by credit card issuers when the visitor applies for a card through the links on this website. We do our best to maintain all information accurate and up to date. However, we do not warrant the credit card information won't change. Click the "Apply Online" button and review the current info on the secure credit card terms page.

Information in these articles is brought to you by Banks, issuers, and credit card companies mentioned in the articles do not endorse or guarantee, and are not responsible for, the contents of the articles.

The webpage is a free service and an information resource for credit cards and financial products and services available to eligible United States consumers. does not offer any warranties and is not a direct service. There are no guarantees for approval or offers when applying for a credit card. Please refer to the application if you would like more information on each credit card. When you click "Apply" for a particular credit card, please take the time to review the terms and conditions of the product/service at the issuer's website. All logos on the website are property of their respective owners.

Disclaimer: This editorial content is not provided or commissioned by the credit card issuer. Opinions expressed here are the author's alone, not those of the credit card issuer, and have not been reviewed, approved or otherwise endorsed by the credit card issuer. Reasonable efforts are made to present accurate info, however all info is presented without warranty. Consult a card's issuing bank for terms & conditions. makes every effort to keep information up to date and accurate. However, the information regularly changes and is presented without warranty. Therefore, we strongly recommend all our readers to visit the credit card application page by clicking "Apply Online!" button to review the detailed credit card's terms and conditions. Note that may be compensated by the credit card issuers when the readers apply for a credit card through this site. is an independent, advertising-supported website which receives compensation from the credit card issuers and companies whose offers appear on the site. Compensation may impact how and where products appear on our site, including, for example, the order in which they may appear on the site pages. does not review or list all available financial or credit offers.

You've successfully subscribed!

Please specify the following:All these fields are optional

Thank you for providing this information! We will make sure our letters are useful for You.

User Generated Content Disclaimer: These responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.