Maxed out your Credit Card? 5 Consequences it may have

Therefore, on your credit card too the limit has been reached – I've been there! This is not just a normal financial hiccup, however, you have to mean, that some consequences can heighten the situation.

1. High-Interest Charges: Having a balance more than your debt credits( a.k.a. maxing out your credit card) is a problem because in most cases it will accrue interest charges. The low-interest rate credit card usually is soaring, and if you can’t pay up the borrowed amount within a month, you could be in a debt situation. 

2. Negative Impact on Credit Score: Although the amount of credit that you're using compared to your total available credit is not the only factor, it is one of the most important pieces when determining your credit score. Proceeding to fully utilize your credit card would cause the utilization ratio to skyrocket, and in response, your credit score would fall.

3. Overlimit Fees: A lot of credit card agencies charge you overlimit penalties so you go over your credit limit. These fees are the cases of having the buck pass, eventually making the fish tougher to sharpen the claws of poverty.

4. Difficulty Obtaining Credit: Showing lenders that you are ‘maxed-out’ in credit card usage illustrates financial exploitation and translates to fewer credit opportunities in the future. This causes you to experience lower opportunities to find loans by big purchases, for example, a car or a house.

5. Stress and Anxiety: The financial stress that comes with maxing out credit cards is real and very burdensome. The psychological impacts of having a credit card that is close to its limit can put your health at risk. Often being stifled by debt and running helplessly to keep company can trigger depression and other cognitive distress.

Although taking out your credit card may serve as a temporary way to tide over the pressing financial issues, however, the impact could be sustainable and far-reaching. Being in this situation is indeed challenging, so no matter what it is about a debt repayment plan, credit counselling, or looking for other financial tools, eventually, you will have to take upon this and look for a solution. 

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