Maximum Credit Limit Usage In Bad For Your Finances

Every credit card has a credit limit, which is the maximum amount that can be used to transact without incurring penalty fees. But credit card issuers do not ever intend for you to use all available funds in your credit card limit. Even the bad things could happen if the credit card usage was approaching or even exceeding your credit limit or over the limit.

Your credit score will go down.
Most of your credit score exactly 25% is based on how many credits are available for you to use. It is the ratio of use of credit cards with credit limits or known as credit utilization.

The higher your credit utilization, or when the use of credit approaching or even exceeding the credit limit over the limit, the worse your credit score. Maximizing the use of a credit card is very bad for your credit score, especially maximizing the use of all of your credit card will be much worse.

Credit Card Issuer will not like it.
When you apply for a credit card or a loan, the bank will look at how much available credit that you can use. If the credit card usage is too high, the bank will assume you have more debt than you can handle.

You risk over limit.
Even if you keep your credit card usage right under the credit limit, your bill could still end up on top of the credit limit when there are loads finance charge and you would also be charged over limit.

It's hard to pay the bills.
Depending on your credit limit, the credit card bills that have been used up can take many years to pay off, especially if you only pay the minimum. You may plan to pay the bill in full, but the part with the cash with substantial nominal may be too difficult to do when the payment due date comes near.

You can trigger the default interest rate.
Credit card companies have the right to raise your credit card interest rate if you have a credit card defaults by maximizing the use of the credit limit. If high interest rates applied to bill usage is also high, this is a disaster for your credit card payment plan.

Reasonable use of a credit card is as follows:
The best thing is to keep your credit card usage is below 10% of the credit limit. To avoid using the maximum credit limit by accident, check your credit limit before making a purchase with a credit card in order to avoid over limit.

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