I Maxed Out My Credit Card: Now What?

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Given many Americans’ lack of an emergency fund, even smart spenders can finding themselves bumping up against their credit limit. But whether caused by unexpected car repairs or a shopping habit you just can’t seem to kick, maxing out a credit card can cost you — in interest, of course, but also when it comes to your credit score. (The amount of debt you owe is a major component of credit scoring models.)

Fortunately, there are some steps you can take to minimize both types of damage. Here’s what to do if you’ve gone up to (and even over) your limit.

1. Check to See If You’ve Been Charged a Fee

Thanks to the Credit Card Accountability, Responsibility and Disclosure Act, some issuers have stopped allowing cardholders to spend beyond their credit limits. But others still offer what’s essentially a credit card version of overdraft coverage: If you go over your limit, you’ll be charged a fee — generally around up to $25 for the first instance and up to $35 for the second, per the Consumer Financial Protection Bureau. So, if you’ve superseded your limit, you should check with your issuer to see if you’ve been charged a fee. You may also want to ask if they’ll waive the charge, should this be the first time this particular mis-step has happened.

2. Pay Your Balance Down ASAP

For best credit score results, it’s generally recommended to keep the amount of debt you owe (on each card and collectively) below at least 30% and ideally 10% of your total available credit limit(s), so getting your balance down to at least the first of those percentages should be a priority.

3. Consider a Balance Transfer Credit Card 

If you know you won’t be able to pay a balance down in the short-term or the APR on your card is particularly high, you may want to consider applying for a balance-transfer credit card to at least minimize the interest you’ll have to pay on those charges. Balance-transfer credit cards allows you to enjoy 0% APR promotional financing on balance transfers, though, more often than not, for a fee. (You can find more information on the best balance transfer credit cards in America here.) If you’re carrying debt on multiple credit cards, you may also want to look into a debt consolidation loan.

4. Ask for a Credit Limit Increase

Asking for a credit limit increase can help you get and stay under that aforementioned 30% credit utilization goal. But be careful: you don’t want to ask your issuer for more credit so you can turn around and spend it. That’ll only exacerbate your credit (and interest) woes. Plus, a credit limit increase could generate a hard inquiry on your credit report and further damage your credit score.

5. Check Your Credit

Keep in mind, the terms and conditions on any type of new financing you pursue are going to be based on your credit score. And a maxed-out credit card can certainly weigh yours down. Fortunately, there may be other steps you can take to improve your credit before (and even after) applying for a new loan. For instance, you may be able to get points back by disputing any errors you find on your credit report with each of the three major bureaus. You can see where your score currently stands by viewing your two free credit scores, updated each month, on Credit.com. You also can find more tips on fixing your credit here.

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