About the Consequences of Credit Card Abuse

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The major consequence of credit card abuse is a poor credit rating, which can affect a person's ability to obtain loans or greater credit limits in the future. Find out why it's important to never max out a credit card with help from a registered financial consultant in this free video on money management and personal finance.

Part of the Video Series: Money Management
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Video Transcript

This is financial adviser Patrick Munro, talking about the consequences of credit card abuse. Credit cards are a privilege. Of course, they're an instrument that is given to you based on your credit circumstances at the time that you apply for credit cards. Credit cards, in a good economy, are given out widely, and of course, you get many credit card offers. Many people tend to apply for too much credit, and then pretty soon they are using too much credit relative to their overall ability to pay. So that is called credit card abuse. Even though you didn't mean to do anything bad, you are abusing a tool that was meant just for emergency purposes, so always be mindful that you should keep your credit card usage to basic necessity. If you can pay the bill when it comes in on a monthly basis, please endeavor to do so, but never max out your credit card, because if you do so, it is being monitored by the credit bureaus and that will lower your overall credit score, no question about that. Credit card companies will also pull back the reins on a line of credit of they become knowledgeable of the fact that you are abusing credit cards. This is Patrick Munro talking about the potentials of credit card abuse.

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