Is there any harm in maxing out my credit card?

Spending wisely can pay dividends

A new credit card can be a veritable invitation to indulge in a shopping spree, but this does not mean that you should go wild with the credit that is available to you.

Before you start shopping, take a look at your credit card spending limit. You should also take care to be aware of any recurring fees which your credit card has, because these fees may lower your available credit.

Take measures to not exceed your credit limit. Not only can exceeding your limit result in some hefty fees, but some credit card companies see this as justification for changing the terms of your credit card. That means that a relatively low interest rate may suddenly increase because you exceeded your credit limit.

You should also be aware that nearing the maximum of your spending limit can potentially hurt your credit score. Nearing your credit limit can make it appear as though you are not managing your available credit in a prudent manner.

For these reasons, you should not necessarily think of your credit card spending limit as a number that will eventually be reached. Use your credit card in moderation and you will avoid over-limit fees as well as any negative affects on your credit score that may occur as result.