How to Deal with Maxed-Out Credit Cards

No matter which credit card you choose, there is always a limit to what you can spend. Maxing out your credit card means that you’ve reached the limit of available credit allocated on that card. You won’t be able to charge more purchases on the maxed-out card until you pay down the balance or, in rare cases, if your limit is increased. If you find yourself with a maxed-out credit card (or several), here’s how to deal with it:  

Review your spending habits 

If you no longer have the ability to access additional credit on that card, start by closely analyzing your budget and spending habits. Create a new budget if you don’t have one (or if your budget is outdated) to help you stay on track with your monthly expenses. Separate your spending into two categoriesfixed monthly costs like rent and utilities and variable monthly costs like groceries and gas. Look for ways to cut back or eliminate unnecessary spending such as shopping, dining out, and entertainment to have room in your budget to start paying down your balance. While this step may seem obvious, it’s important to figure out how you ended up with a maxed out credit card or more in the first place. 

Create a Payment Plan 

Once you determine how much income is left after covering your necessities, put together a payment plan that is affordable. Aim to pay more than just the minimum payment required on the card each month. If, however, you can only manage the minimum, that’s okay too. The key thing to remember is to not miss a monthly payment on your cards. This can hurt your credit score and result in more fees, further compounding your debt.  

Stop Using the Card 

Once a credit card is maxed out, the card issuer will not approve any further purchases using that card (i.e. the card will be declined). Once you start to pay off some of the card balance, it could be tempting to start using it again which could lead you down the same path. Avoid carrying the card out with you and delete it from your online store accounts.  

Debt Consolidation

Suppose you find yourself in a situation where you have missed payments on multiple maxed-out credit cards or don’t have the monthly income to pay the minimum monthly payments. Debt consolidation through a personal loan is a great and simple option to help you get relief.   

Personal loans tend to have lower interest rates than credit cards. Once you receive your loan, you can pay off all of your credit card balances (maxed-out or otherwise) at once. You will still need to pay down your loan each month, but your payments will be much more affordable than trying to pay your maxed-out card balance along with the accruing high interest. 

With Credit Direct, you can check your rate in minutes with no effect to credit score. Our loan agents can help you find the best available loan offer and right repayment options that will work for you.

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