Home > Credit Cards > If You Max Out a Credit Card and Pay It Off, Does It Still Hurt Your Credit?

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Paying with plastic can make your money seem limitless. But credit cards come with a credit card limit, which is the maximum amount you can charge on the card. When you charge the card’s full limit, you max out that credit card. Even if you pay enough each month to pay off your balance in full a few months after maxing out your credit card, you may pay the price of a lower credit score along with the bill. You also run the risk of not paying enough or adding more charges to exceed your limit and end up paying a fee or penalty.

And if you can’t pay off a maxed out card quickly, the resulting credit card debt is hard to pay down. Interest increases your original account balance—month after month after month. And that debt can lead to an even bigger impact on your credit score, not to mention your budget.

Your Credit Utilization Increases

Your debt-to-credit ratio, also known as your debt usage, balance-to-limit ratio or credit utilization ratio, is the percentage of your available credit limit that you’ve used or charged. You can easily calculate your utilization ratio. Simply divide your credit card balance by your available credit line—the card’s limit. For example, if the card’s limit is $2,500 and you have a balance of $900, your credit utilization ratio is 36%.

Most credit experts suggest keeping your credit utilization rate below 30%. Less than 10% is even better. For credit-scoring purposes, credit utilization is calculated for each individual card and total overall revolving credit.


Examples of non-credit card revolving credit include credit lines, like home equity credit lines. Potential lenders see a higher ratio as a potential red flag and you may have trouble getting approved for a loan, mortgage or a new credit card if yours is high.

If you can max out a card and pay the full balance off on or before your next bill due date, your ratio won’t be affected. That’s because a credit card issuer only reports your information to the major credit bureaus once a month.

If you don’t pay it off, to improve your debt-to-credit ratio you can pay down your debt or increase your credit limit. Either option—or both—lower your ratios. A third option may be to make multiple payments during a month to keep the balance you owe at 30% or less of your limit.

Your Credit Score Drops

When you max out your credit card, your credit score takes a hit. Debt usage or credit utilization makes up 30% of your credit score. And lenders look at how you’ve handled credit in the past before approving you for loans for big purchases like a mortgage or a car. Even if you’re approved, a lower credit score means you’ll pay a higher interest rate than you might have with a higher score.

Your Credit Card Debt Goes Up

It can take years to pay off your credit card debt, especially if you only pay the minimum each month. And if you’re an average American, you’re carrying $4,293 in credit card debt already.1 At an annual percentage rate (APR) of 16.74%, that’s a monthly interest charge of $718.65.

If your financial situation changes for the worse, that debt load can quickly become a burden. And missing monthly payments can further decrease your credit score.

To avoid maxing out your credit card, know your limit and keep track of your balance.

If you’ve already carrying a high balance on a maxed out credit card, consider a balance transfer credit card with a 0% intro APR if you can get approved for one. If you transfer a balance to a card with no interest on balance transfers for 12 or more months, you can put the money you’d pay in interest on the balance toward the balance on the new card instead.

Where’s Your Credit?

If you’re not sure how your credit utilization is impacting your credit score, you can get your free Experian VantageScore score for free on Credit.com and your FICO score for $1. Your free score includes a credit report card that shows where you stand in each of the five areas that make up your score, including debt usage, AKA credit utilization.

Credit.com credit report card for fair credit

More on Credit Cards

1 https://www.experian.com/blogs/ask-experian/state-of-credit-cards/

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  • David Mann

    Before I got my home loan I got 2 secured credit cards. I fully agree with the statement of keeping the amount due below 30%. I had my cards almost maxxed & when I paid them down my score jumped over 100 points. I did not have much on my credit report so these 2 cards seemed to control my score. I was amazed by how much of an affect it has on your score. The cards I had were only for $300 each so paying the off was easy, the downside is that it is very easy to max them out too.

    • EdInBoca

      ….and that shouldn’t be a downside. The credit bureau’s created the downside. This is the 21st century. It isn’t rocket science to understand that $300 is nothing anymore but they want to add insult to injury by penalizing you for using more than $90 on the card. We definitely need credit reform in this country. Credit bureau’s have WAY to much power.

  • Kingsley

    I did a balance transfer from BOA to Chase. During the paying off of my balance a $10 purchase I made before didn’t post on my account and it wasn’t paid off by chase. Unknowingly to me I missed that payment and my credit score drop by 56 points. What do I do?

    • http://www.credit.com/ Credit.com Credit Experts

      You can call the first bank, make sure the debt is paid and ask them not to report it. (They may not honor that request, but it can’t hurt to try.) Are you saying they failed to send you a bill? Or that you overlooked it because you believed it had been paid? You can read more here:
      How Much Will One Late Payment Hurt Your Credit Scores?

      • Kingsley

        I overlooked it because I thought that it has been paid. They said though the purchase was before the balance transfer but it posted afterwards. This is my first missed payment ever and it dropped my credit report by 56 (708 – 652) points. The worst is I have a 100% payment record before this mix-up and it is going to affect my application for student loan next year. Any chance the credit reporting agency can do anything about it.

        • Jeanine Skowronski

          Hi, Kingsley,

          Generally, the bank, not the credit bureaus, would need to agree not to report in order for the information to remain off of your credit report.

          Thank you,


  • MiggyCabby24

    Fico scores are a bunch of crap. Negative circumstances happen to people all the time, through no fault of their own, and a number shouldn’t determine a person’s worthiness or intentions in-regards to paying their bills.

    • 初音 みやび

      Negative circumstances happen sure, but the reality of it is: there is no other way to truly determine if you’re responsible. And honestly, having a car loan, credit cards, even a damn cell phone bill – those are YOUR responsibilities. No one else’s. If you cannot pay bills, a car loan or pay down your credit cards, that’s not aby one else’s fault.

  • teejerman

    What genius is advising us by saying “it’s not necessarily a good idea to spend up to your limit — even if you can afford to pay off your bill in full.” If you can pay your ‘maxed out’ credit in full, how is this a liability? Ridiculous…

    • http://www.credit.com/ Credit.com Credit Experts

      Certainly, you CAN do that, but it can hurt your credit utilization, and depress your credit score. It’s a valid choice, but it if you are going to do this, it’s good to be aware of potential consequences.

      • EdInBoca

        There should be no consequences. You were given a credit limit to USE it. Who decided there would be consequences for using it? This is just another way for credit bureau’s to validate their existence and self-importance.

  • Jeffery Surratt

    Credit scores are used to charge the lower income borrower a higher interest rate. Thus makes more money for the banks and that is what it is all about. My sister has worse credit habits than I do but makes 3 times as much 20K vs 60K and she always get better interest rates on credit cards and auto loans than I do. She has several charge off credit cards, and still gets better rates. My Credit Card utilization rate went from 48% to 59% in 3 months and I always pay more than the minimum payments and my score dropped 25 points. So, I am thinking 50% or above has a trigger to lower your score.

    • http://www.credit.com/ Credit.com Credit Experts

      Most experts advise using no more than 30% of your credit limit, and lower is even better.

      • EdInBoca

        I never understood the logic in that. What’s the point of having a credit card if you’re going to get penalized for using the darn thing? What’s the point of having a high credit limit if you have to be afraid not to use more than 30% of it? I don’t hear them complaining about all the interest they make no matter what your balance is. Credit card companies make money on the credit you use. Why would they balk at making more money? Maybe they should be penalized for charging too much interest. If I have to use only 30% of my limit, I don’t need a credit card. I’ll just use a debit card and be done with it. This is all so ridiculous.

  • EdInBoca

    I’ve never known any of this to happen. Quite the opposite. I consistently pay off balances very quickly and I’m often “maxed out” because i travel a lot. The only thing that has ever happened is they automatically raise my credit limits! Go figure. I have a 750 FICO and have stayed between 730 and 780 for the past 5 years..

    • Mark Emanuel

      If you’re referring to Boca Raton, I’m sure it’s easier to maintain a FICO score there than say East St.Louis!

      • EdInBoca

        How is that? Not everyone in Boca Raton is wealthy.

  • Mark D. Budka

    That’s actually a good thing to know and is a great thing to put into practice. I love it! Thank you!

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