Some people are under the impression that when you have alot of credit card debt...you are "maxxed out." There are 2 parts to this: 1) "Maxxed out" on what you can pay per month (and obviously if you are carrying a balance you aren't paying it in full), and 2) "Maxxed out" to the limit of the card(s) where even if you wanted to keep using it...you couldn't.
We may have almost $9000 in CC debt (and if you count the retirement loan which largely consolidated our higher interest CC debt, that number rises to 27k), but in regards to definition #2.... being maxxed out on the limit....we aren't even CLOSE.
Yes, our lovely CCs have "entrusted" us with ridiculously high limits. All in an attempt to make us spend more. Yes....we did fall for this....and we used our cards unwisely. And yes we are paying the price. But if we really wanted to get ourselves in trouble. ...we have:
- G-man's Visa (pre-marriage) - $24,500
- Mysti's Mastercard (pre-marriage) - $18,500
- Discover (post marriage) - $16,100
- Chase (post marriage) - $14,000
- Mysti's Credit Union Mastercard (pre-marriage) - $3,500
- Lowe's (post marriage) - $2500 (I think)
- Kohl's (post marriage) - $1000
- JCPenney(G-man, pre marriage) - $500
That is $80,600 of credit that we have available to us. That is insane. The only card that has a balance on it is the Discover card. We are utilizing approximately 68% of that card, so when we look at our credit score, we get "dinged" for high utilization. But if you look at everything as a whole, we are utilizing about 11% of our available credit. (That number changes to 34% if you count in the money that was consolidated in the retirement loan.
By no means is this GOOD. We had a plan to get rid of the CC debt at a MUCH lower rate using the retirement loan (the highest CC rate was 15.99%; the retirement loan is 1.85%, and yes, we realize that is at the expense of interest we would have earned if we didn't touch it, but we would have probably PAID more interest). We botched that plan by running up the Discover card over the past 2 years. But we are working to fix that, and hopefully G-man's car will be paid off in about 8-9 months, and then we can fix this.
But maxxed out.....no, we are not maxxed out by definition #2. We have lots more credit available if we wanted to hang ourselves on. At the current debt level, it would become increasingly more difficult to handle a monthly payment more than what we have now, so by definition #1....yeah, we are maxxed out.
If you have consumer debt, do you consider yourself maxxed out????