Definition of Maxed Out
What is the definition of the term "maxed out" as it applies to the world of credit cards? What does the term "maxed out" mean?
In the credit card world, "maxed out" means that you no longer have any more "space" on your credit card.
For instance, let's say that you have an American Express card that has a limit of $10,000. Let's say that you have used all $10,000 of this space.
You go to the movies one night and attempt to use your card but it is declined. After calling your credit card company, you realize that you have no more space on your card as you are "maxed out".
Credit card companies love the people who don't pay off their balances every night, as these people will accrue large interest expenses. As a matter of fact, many Americans simply pay off the minimum payment every month, which usually consists of mostly interest charges.
Many Americans take this one step further by "maxing out" multiple credit cards. Many US households will have multiple credit cards that are all at or near their limits.
"Maxing out" your credit card is never a good thing.
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