Nobody buys a credit card with the intent to max out its credit limit. But the state-of-the-art gadgets around us make it difficult for us to resist ourselves from using our credit card for such worldly pleasures. However, leaving these bills unpaid at the end of the month will only lead to further debts. Continue this for too long, and you will realise that you’ve maxed out your credit card. Not only will this cost your thousands of rupees in interest on those high debts, but it will also lower your buying power in the future. Hence, it is imperative to understand the consequences of hitting your credit limit and know the ways you can prevent it. Here’s a list of reasons why you should never max out your card:
●It affects your credit score
Hitting the credit limit on your card can have a negative impact on your credit score as the amount you utilise from the available credit defines your Credit Utilisation Rate (CUR). CUR is defined as the ratio of your outstanding debts to…