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Does Maxing Out a Credit Card Hurt Your Credit Score?

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Brittney Myers
Author: Brittney Myers
Brittney Myers
Brittney Myers
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Brittney started her writing career in the world of science, putting her physics degree to good use. Her journey into finance started with building her personal credit, but soon grew into a borderline obsession with credit cards and travel rewards. For the last 7 years, she has enjoyed the ability to share her expertise with readers, as well as the opportunity to interview companies and individuals making an impact on our financial lives. She wholly believe most problems can be solved with the right research -- and a good spreadsheet -- and she specializes in translating complex financial topics into actionable advice to help educate and empower readers.

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Cole Tretheway
Reviewer: Cole Tretheway
Cole Tretheway
Cole Tretheway

Cole Tretheway is a full-time personal finance writer whose articles have been featured on Motley Fool Money and The Motley Fool. He has a degree in English with a Certificate in Professional and Technical Communication from California Polytechnic University, SLO.

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Eric McWhinnie
Fact Checked: Eric McWhinnie
Eric McWhinnie
Eric McWhinnie

Eric McWhinnie has been writing and editing digital content since 2010. He specializes in personal finance and investing. He also holds a bachelor’s degree in Finance.

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Few things are as embarrassing as having your credit card declined by a cashier in front of a line of impatient customers. But does maxing out a credit card hurt your credit score as well as your ego?

Yes, maxing out credit cards can hurt your credit score. However, the impact to your credit from a maxed-out credit card will depend on many factors. This guide explains how -- and why -- maxing out credit cards impacts your credit score.

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The main problem is your utilization

Maxing out your credit card worsens your utilization ratio. Depending on the severity of the change, this could hurt your credit score.

Your utilization ratio makes up 30% of your FICO® Score. To keep your score high, you want to make sure the amount of credit you borrow is below 30% of the total credit available to you. For example, if your total credit line is $10,000, you want to use no more than $3,000.

But what if you have multiple credit cards, and therefore multiple credit limits? In that case, add up all your credit card limits to figure out your credit maximum, the total credit you can theoretically borrow.

Example: Say you have two credit cards total. Card A has a $1,000 limit. Card B has a $9,000 limit. Your credit maximum is $10,000. Between the two cards, you want to use no more than $3,000 in credit to help keep your credit utilization ratio low and your credit score high. You can max out Card A without tanking your credit score because the card's $1,000 credit limit is only 10% of your available credit.

Experts recommend keeping your utilization below 30%, but if you want to build an excellent credit score, you want to keep that number in the 5% to 10% range. It's worth noting the average American's credit score is about 714, which counts as a "good" score.

Choosing a credit card

Don't you wish you could take a peek inside a credit card expert's wallet sometimes? Just to see the cards they carry? Well, you can't look in anybody's wallet, but you can check out our experts' favorite credit cards. Get started here:

Best high limit credit cards

How other credit factors come into play

Maxing out a credit card will impact your credit utilization ratio. But whether the impact is tiny or huge depends on at least three other credit factors, including how many credit cards you have.

How many credit cards you have

If you have multiple credit cards, maxing one out might not impact your credit score. Credit issuers only care about how much of your total available credit you use at any one time.

Say you have four credit cards, each with a $2,500 credit limit. Your total available credit is the sum of their limits, which adds to $10,000. If you max out one card and leave the others alone, your credit utilization is 25%. That's beneath the 30% limit recommended by experts, so your credit score will probably be OK.

If you only have one credit card and max it out, you are using 100% of your credit utilization. That will probably have a large, negative impact on your credit score.

Your existing credit score

Your existing credit score matters. Generally speaking, someone with a good credit score would be punished more for "bad credit behavior" than someone with a poor score. Depending on your existing credit, your score could drop by 40 points or more.

How long it takes to pay off the balance

The longer you wait to pay off your credit card balance, the longer your balance stays high. If you only make minimum payments, you could be charged credit card interest above and beyond your credit limit. Unless you pay off the card, you could find yourself lifting a growing debt pile. If that leads to you making late payments, then your credit score could tank even further.

Is maxing out a credit card ever a good idea?

Maxing out a credit card is rarely a good financial move, but there are exceptions. If you have no other way to pay a necessary expense, such as a medical emergency, you might need to max out a credit card -- and that's okay. (Note: If you're currently facing high medical bills, you might benefit from our guide to financing medical expenses.)

You may also consider maxing out a credit card during a balance transfer to take advantage of a low interest rate. Your credit utilization will remain the same since you're just shifting money from one card to another, but you'll pay less interest over the long run.

Example: Say you have five credit cards, each with a $2,000 balance and an 18% interest rate. You get a new credit card with a $10,000 limit and a 0% intro APR on balance transfers for 18 months. You could transfer all of your existing balances to the new card and pay no interest while you work on paying off debt for the next 18 months.

Credit card comparison

We recommend comparing options to ensure the card you're selecting is the best fit for you. To make your search easier, here's a short list of standout credit cards.

Offer Our Rating Welcome Offer Rewards Program APR Learn More
Rating image, 5.00 out of 5 stars.
5.00/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
 = Best
= Excellent
= Good
= Fair
= Poor
Best for cash back on rotating categories 		Discover will match all the cash back you’ve earned at the end of your first year. 1% - 5% Cashback Circle with letter I in it. Earn 5% cash back on everyday purchases at different places you shop each quarter like grocery stores, restaurants, gas stations, and more, up to the quarterly maximum when you activate. Plus, earn unlimited 1% cash back on all other purchases.

Intro:

Purchases: 0%, 15 months

Balance Transfers: 0%, 15 months

Regular: 18.49% - 27.49% Variable APR *Rates as of December 12, 2024.

Apply Now for Discover it® Cash Back

On Discover's Secure Website.

Rates & Fees External Link Icon

Rating image, 5.00 out of 5 stars.
5.00/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
 = Best
= Excellent
= Good
= Fair
= Poor
Best for cash rewards on everyday spending 		$200 cash rewards Circle with letter I in it. Earn a $200 cash rewards bonus after spending $500 in purchases in the first 3 months. 2% cash rewards Circle with letter I in it. Earn unlimited 2% cash rewards on purchases.

Intro: Circle with letter I in it. 0% intro APR for 12 months from account opening on purchases and qualifying balance transfers

Purchases: 0% intro APR, 12 months from account opening

Balance Transfers: 0% intro APR, 12 months from account opening on qualifying balance transfers

Regular: 19.24%, 24.24%, or 29.24% Variable APR

Apply Now for Wells Fargo Active Cash® Card

On Wells Fargo's Secure Website.

Rates & Fees External Link Icon

Rating image, 4.00 out of 5 stars.
4.00/5 Circle with letter I in it. Our ratings are based on a 5 star scale. 5 stars equals Best. 4 stars equals Excellent. 3 stars equals Good. 2 stars equals Fair. 1 star equals Poor. We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs.
 = Best
= Excellent
= Good
= Fair
= Poor
Best for unlimited rewards on purchases 		25,000 points Circle with letter I in it. 25,000 online bonus points after you make at least $1,000 in purchases in the first 90 days of account opening - that can be a $250 statement credit toward travel purchases 1.5 points per dollar Circle with letter I in it. Earn unlimited 1.5 points per $1 spent on all purchases, with no annual fee and no foreign transaction fees, and your points don't expire as long as your account remains open.

Intro: Circle with letter I in it. 0% Intro APR for 15 billing cycles for purchases. 0% Intro APR for 15 billing cycles for any balance transfers made in the first 60 days. After the intro APR offer ends, 18.49% - 28.49% Variable APR on purchases and balance transfers will apply. A 3% fee for 60 days from account opening, then 4% fee applies to all balance transfers.

Purchases: 0% Intro APR for 15 billing cycles for purchases

Balance Transfers: 0% Intro APR for 15 billing cycles for any balance transfers made in the first 60 days

Regular: 18.49% - 28.49% (Variable)

Apply Now for Bank of America® Travel Rewards credit card

On Bank of America's Secure Website.

Damage from maxed-out credit cards is temporary

Maxing out a credit card sounds scary, and most people only have one or two cards, so maxing one out is generally frowned upon. But in this case, the devil's in the details. What matters most is using less than 30% of your total available credit across all your credit cards.

One more thing: Some lenders may consider a maxed-out credit card a risk no matter what your credit utilization is. So to get the best rates from lenders, you should consider not maxing out individual credit cards. Spread out spending to get approved for better cards.

Damaged your credit score? You can rebuild your credit by paying off your credit card balances. Once you pay down the balance on your maxed cards, your credit score will recover. You'll see changes to your score as soon as your smart credit habits are reported to the credit bureaus.

FAQs

  • TransUnion estimates credit reports are updated about once per month on average, or 45 days at most. Some lenders report scores to credit bureaus faster, resulting in quicker updates.

  • The higher your credit score, the more a maxed-out credit card could hurt your credit. If you max out your only credit card, you could see your score drop by up to 50 points.