A maxed-out credit card is a credit card that has a balance equal to the credit limit. So, if the credit limit on your credit card is $3,000 and you’ve spent that full amount without making any payments, you have a maxed-out credit card.

If you are a Discover customer, you can log in to the Account Center to view your available credit limit and find out if you’re eligible for a credit line increase or a cash advance.

In any case, understanding why you have a maxed-out credit card is key to using a credit card responsibly. Carrying that large of a balance is a signal to check in with your current budget, expenses, credit cards and financial accounts to ensure that the financial tools you lean on to manage your money are still a good match for your financial reality. Consider these tips for managing a maxed-out credit card:

1. Why Maxing Out Matters

2. Determine Why You Maxed Out Your Card

3. Take Steps to Fix It

4. Find the Card That’s Right for You

1. Why Maxing Out Matters

The amount of your credit card balances relative to your available credit (known as credit utilization ratio) helps creditors determine the risk they assume. For this reason, a maxed-out credit card may cause the issuers of your other credit cards to lower your credit line, or raise your card interest rates — even if you haven’t maxed out those other credit cards.

According to The Balance, maxing out your credit card could:

  • Reduce your credit score
  • Make it harder to borrow money
  • Put you at risk of going over your credit limit (and triggering a penalty APR)
  • Make it tough to pay off your balance
  • Increase your minimum payment

It may be a good idea to call the credit card company if you find yourself in this situation. Especially if you’ve never missed a payment before, or if you have had a life-changing event such as a medical emergency, the credit card company may be able to work with you in terms of payment schedules and fees.

But to ensure this doesn’t happen again, take time to review why you maxed out your cards, so you can take steps to mitigate those reasons.

2. Determine Why You Maxed Out Your Card

Here are some common scenarios that may contribute to maxing-out a credit card that you may wish to consider.

  • A one-time financial fluke.Were you traveling with only one credit card, making several large purchases to pay for a home remodel, or have you just paid a large medical bill? A medical crisis can push even the most dedicated saver to their financial limits. A home remodel could be a desire, rather than a need — or it could be a massive plumbing bill after a burst pipe. Don’t panic when a crisis or large unexpected bill hits. The important thing now is to consider how you can start paying that down.
  • Living beyond your means.This one may be harder to stop, since it’s more likely to have become a longer-term habit. Perhaps you don’t have the cash to fund your basic monthly expenses. Or maybe you keep spending beyond your budget on items or experiences, be they splurges or feel like must-haves. The goal now is to reassess.
  • A low credit line.If you’re just building credit and/or have a secured credit card, your credit limit may be only a few hundred dollars. In this case, a balance equal to your credit limit may not necessarily be a sign that you’re overspending, but it does present an opportunity to learn the ins and outs of credit and work on improving your financial habits.

3. Take Steps to Fix It

Thankfully, many of the reasons behind why you maxed out a credit card can be addressed.

  • Stop using the card temporarily.
  • Pay as much you can to reduce the balance — and the amount of money you could pay in interest rate charges — each month.
  • Sign up for automated alerts. Many credit card issuers provide the option to enroll in automated email or text alerts so you can proactively monitor how purchases impact your balance in the future.
  • Revisit your budget, and stick to it. If your monthly expenses closely match (or exceed) your monthly income, consider how you can cut costs, or generate an additional source of income.
  • Use cash. If you have a maxed-out credit card because you struggle to resist impulse purchases, make it impossible to veer from your budget: Place only the amount of cash you’ve allocated in your budget into envelopes when you shop.
  • Establish an emergency savings fund. A common financial rule of thumb is to build a balance of three to six months of living expenses, according to NerdWallet.
  • Prove to creditors that you can manage a higher credit limit by paying on time, not applying for new credit, keeping the card open, and paying down the balance.

Eventually, your issuer may be willing to increase your credit limits and/or offer you other credit cards, according to US News and World Report, because you’ve proven to have a strong understanding of how to use credit as a part of your financial life.

4. Find The Card That’s Right for You

One important step may be ensuring that the credit card you have, or any future cards, truly support your needs.

If you have poor or no credit, a secured credit card may be able to help you learn how to use credit cards to complement your financial life, especially if you need to establish your credit card and credit history.

Credit line amounts, annual fees, interest rates, late fees and the ability to earn credit card rewards all vary from one secured credit card to the next. Take advantage of online reviews and articles from unbiased sources to help guide your search. As you start to learn what features secured credit cards offer, make a list to prioritize which are the most important to you.

Ask any card issuers what steps are needed to turn a secured card into an unsecured card, which is what many people associate with the term credit card. The transition is often referred to as graduating from your secured card.

If you have an average credit score and get approved for a new credit card, your credit limit may not be as high as cards offered to people with excellent credit, but you will find plenty of options with no annual fee, relatively reasonable interest rates and rewards.

Plenty of websites review the top credit card deals available for people with average or fair credit, so a quick search could help you narrow down which options to apply for.

The best credit card for you depends on your individual needs and choosing the right card involves assessing your lifestyle.

  • Do you like to travel? You might want to select a card that offers travel benefits.
  • Do you like to shop? You might want to look for a card that gives you access to discounts. Or check out cards that offer reward programs on everyday spending.
  • Sometimes cards with higher annual fees can pay for themselves with the benefits they offer, depending on your spending habits. But if you don’t believe you would spend enough to earn enough rewards to offset that fee, it’s worth moving on to look at other options.

It’s important to know what kind of card you’re applying for because if you have average credit and you’re applying for a card that requires excellent credit, you could be denied.

Ideally, getting the right credit card, and using it responsibly, will put you on the road to earning a better credit score, and the even better credit card offers available to those near the top of the range.

And hopefully, you’ve followed a path that may keep you out of debt, and away from maxing out your cards.

Originally published March 19, 2018.

Updated February 27, 2020.

Legal Disclaimer: This site is for educational purposes and is not a substitute for professional advice. The material on this site is not intended to provide legal, investment, or financial advice and does not indicate the availability of any Discover product or service. It does not guarantee that Discover offers or endorses a product or service. For specific advice about your unique circumstances, you may wish to consult a qualified professional.