NEW YORK (LowCards.com) — Maxing out your credit card can have a big impact on your credit score. One of the major components in the credit score formula is the percentage of your available credit you have used. If this number is over 30%, your credit score can be hurt. So it would not be wise to owe $5,000 on your credit cards if you only have a $5,000 credit limit. You'll be much better off lowering this percentage.
Most credit card companies also have fees for going over your credit limit if you have opted in for such a service. Know that if you do opt in, you will likely run into trouble. One of the best ways to keep your credit card debt down is to not allow yourself to spend more than your credit limit. Not opting in for this over-the-limit coverage makes good sense.
There are a number of ways to make a credit card transaction without reaching your credit limit. Here are five alternatives to maxing out your credit card:
Split up your purchases. Instead of making a big purchase on one credit card, consider splitting up your purchases over several cards or payment options. Ideally, try to use as much money as you can from your bank account or cash. This will be money you don't have to pay back. If you can't do that, at least try to disperse the charge over a couple different credit cards.