What To Do When You Max Out Your Credit Card

Just because your credit card provider lends you a certain amount of money doesn’t mean you should use all of it. Reaching your credit limit, or maxing out your card, is detrimental to your credit utilization ratio and significantly impacts your credit score. If you max out your credit card and let the balance carry over every month, you should reassess your spending habits ASAP. 

What Does Maxing Your Credit Card Look Like?

Imagine you have a credit card — or several — that gives your a $3,000 credit limit. If you spend $3,000, you’ve reached your limit, AKA maxed out your card, and you can’t spend any more. Whatever charges or monthly interest you accrue may even put you over your $3,000 limit.

How To Recover When You Max Our Your Credit Card

Everyone is different, and people max out their credit cards for many reasons. Sometimes, borrowers rack up high credit card balances because they are chronic overspenders or impulse shoppers. On the other hand, some people may use their credit cards during financially difficult times, such as the pandemic, a divorce, or a layoff. Either way, these tips from The Balance can point you in the right direction to eliminate credit card debt. 

Stop Using Your Credit Cards

If you want to get on top of your outstanding balance, you need to stop adding to it. If you don’t, your debt will only become larger and more unmanageable. Cancel any subscription services you pay with your cards and take it off every website you used for one-click purchases.

This tip doesn’t apply if you need your credit card to make ends meet during a difficult time. Once your situation changes, you should get to work paying your debt.

Take Another Look At Your Budget

If you want to eliminate your credit card debt, you can’t rely on paying the bare minimum each month. For example, a $5,000 balance on a card with a 20.21% APR will take you over 45 years to get rid of if you only make the minimum payment, according to this credit card calculator

If possible, pay as much as possible every month. Doing so will put a serious dent in your debt and go a long way to lower your balance. Of course, your income and other expenses affect how much you can put toward your card. Reviewing your budget allows you to see where you financially stand. That way, you know where you can lower costs and have more money to pay off your debt. 

If you don’t have a budget, you should make one. There are many tools and guides online that can help you make one. A budget can give you better insight into your expenses so you can make an action plan to lower your debt.

Create A Payment Plan

After you reassess your budget (or make one), you should have a better idea of how much of your balance you can afford each month. Now you can make a payment plan and determine how much you can pay off every month.

A payment plan doesn’t have to be a formal process with your credit card provider. It’s something you can keep to yourself. Even so, it would be best if you got your plan in writing. This will help you hold yourself accountable and stay on track to meet your goal.

You can pay down your debt even faster by making additional payments when possible. For example, if you maxed out a rewards card, you may want to redeem your rewards points as a statement credit, which you can use to pay off part of your bill.

Consolidate Your Debt

Consolidating your debt with a balance transfer card or personal loan are two ways to manage a maxed-out credit card if your credit score is in good shape. 

If you decide to use a balance transfer card, you can transfer your balance from multiple credit cards onto one. Most balance transfer cards waive interest during the promotional period, so you’ll have ample opportunity to pay off your balance at a more affordable rate. 

Another idea is using a personal loan to repay your outstanding balances, leaving you with only the loan to pay back. Although the amount you owe remains the same, you only have one payment to make each month. Depending on your creditworthiness, you may even qualify for a better interest rate and repayment terms.


  • Irby, LaToya. “Steps to Take When You’ve Maxed Out Your Credit Cards.” The Balance, 16 Sept. 2020, www.thebalance.com/what-to-do-when-you-ve-maxed-out-your-credit-cards-2385762.
Ian Schindler