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How much credit card debt is too high?

How Credit Card Debt Can Affect You

Credit card debt has several consequences, including:

  • Interest charges
  • Impact on your credit score
  • Possibility that the card issuer can legally pursue you

Here’s more information on how credit card debt can affect your life.

Interest charges

Your credit card issuer may charge you interest on any balance that you do not pay in full by the due date. Because most credit cards have a high interest rate, this is one of the most dangerous parts of maintaining a balance. Interest charges can add hundreds or even thousands of dollars to your balance each year.

LEARN MORE: How does credit card interest work?

Your credit score

Your credit score is basically a measure of your creditworthiness. Credit card debt can hurt your credit score in several ways:

  • High Balances: An important factor in your credit score is your credit utilization ratio (your credit card balances divided by their credit limits). Once this number exceeds around 30%, it’s bad for your credit. So if you have credit card debt of $5,000 and credit limits of $10,000, that 50% usage would hurt your credit.
  • Late payments: If your credit card payment is 30 days or more overdue, the card issuer may report it to the credit bureaus. This has a huge impact on your payment history, which is the most important factor in your credit score.

From the good side, as you pay off your credit card debt, it can help boost your credit score.

LEARN MORE: If I pay off a credit card, will my credit score change?

Not eligible for new credit cards

When you have too much debt, credit card companies will be hesitant to approve you for new cards. If you see a card you really like that offers a lot of value, you may not be able to benefit from it. It’s not as bad as the other consequences of credit card debt, but it’s still worth mentioning and could be helpful as motivation to pay off your cards.


If you don’t pay your credit card account long enough, there could be legal action. The credit card issuer could sue you and try to collect the debt in court. Or, if the card issuer sells the debt to a debt collection agency, the debt collector would also have the option of suing you.

LEARN MORE: Can a credit card company sue you?

Take control of your credit card debt

When you’re dealing with heavy credit card debt, a good place to start is to set a budget and figure out how much you can afford per month. From there, you can make a debt repayment plan and consider options that will help you pay off your debt cheaper and faster.

For more information on how to pay off credit card debt, here are some helpful guides:

Using a Balance Transfer Card

One of the best ways to save money on credit card debt is to use a balance transfer card. If you have good credit, some credit cards may offer you an intro APR of 0% on balance transfers.

Read more about it on the following pages or compare different balance transfer credit card offers with the handy tool below: