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Do I Have Too Much Credit Card Debt?

Epic Loans Editorial Team

Do i have too much credit card debt

Consumer debt data released by the Federal Reserve Bank showed that as of 2023, Americans owed a total of $1.079 trillion in credit card debt. This figure raises some questions that many people might have, such as: “Do I have too much credit card debt?” and “How much credit card debt should I have?”

In this blog, we will help you decide how much credit card debt is too much, along with the potential repercussions of these circumstances. Rest assured, we will also provide practical solutions and strategies to help you pay off these debts effectively.

How Do You Check if You Have Too Much Credit Card Debt?

If you are wondering how much is too much credit card debt, here are three indicators that you may be dealing with an excessive amount of credit card debt:

High Credit Utilization Ratio

Utilizing a large percentage of your credit limit is a sign of excessive debt and may impact your credit score. Since your credit utilization ratio indicates how much of your available credit you actually use, experts advise aiming for a ratio of 30 percent or less. While hitting this goal will not solve all of your debt issues, it will demonstrate that you are making progress in debt management and financial independence.

Payment of Credit Card Debts with Other Credit Cards

If you have to use one credit card to pay off another, it is an indication that you have too much credit card debt. Although most credit card issuers do not technically permit this practice, it is not entirely impossible. It will most likely cost more than it is worth. On the other hand, if you cannot even pay the minimum amount due, this may be a sign that you are overspending. Consider this an opportunity to examine the underlying cause of your debt and make efforts to address it.

High Debt-to-Income Ratio

A high debt-to-income ratio is a common warning sign of too much credit card debt, suggesting that you may be carrying more debt than your current financial situation can support. You can calculate your debt-to-income ratio by dividing your monthly debt payments by your monthly income. The repayment of debt consumes a large portion of your budget, putting pressure on other areas of your financial plan.

Read More : Best Ways to Consolidate Credit Card Debt

What will be the Result of too Much Credit Card Debt?

While the burden of debt is already a major contributor to issues like stress, some technical and financial hassles could come with debt. Here is a list of such issues.

Impact on Credit Score

Your credit score can take a hit due to too much credit card debt or missing payments. This is because your payment history is vital for the upkeep of your credit score. Thus, to preserve a high credit score, it is critical to manage your credit card spending and payments.

The relationship between the balances on your revolving credit accounts and their corresponding credit limits is evaluated by your credit utilization ratio. A high utilization ratio can adversely affect your credit scores. Thus, maintaining large balances will lead to elevated utilization ratios unless your credit limits are significantly higher.

Paying High Interest Rates

Unless you’re using a promotional rate, credit cards usually have high interest rates for both new purchases and your current balance. Additionally, credit cards typically have variable interest rates. This means that an increase in interest rates can increase in accumulated interest, thereby affecting your monthly minimum payment.

Difficulty Qualifying for a New Loan

It may be challenging to be approved for credit cards, mortgages, and auto loans if your debt-to-income ratio is high while your credit score is low. Thus, the implications of bad credit can vary from minor inconveniences to major negative lifestyle changes.

Going into Collections

After a few months of missed payments, your credit card issuer may decide to sell the debt to a collections agency. Your credit score will suffer greatly from this move into collections, and debt collectors will contact you frequently in order to collect the money.

Read More : How To Pay 15k In Credit Card Debt

How can You Maintain Manageable Credit Card Debt?

Do I have too much credit card debt

Keeping your credit utilization ratio at its ideal level is essential to your credit score. Experts generally advise maintaining this ratio below 30%.

Although some advise staying within 1% to 10% of credit utilization, a range of 11% to 30% is usually regarded as good. Lenders and card issuers want to see cardholders use revolving credit responsibly by paying off their balances on time.

It is interesting to note that if your credit behavior is deemed healthy—that is, timely payments, low balances, and other responsible credit behaviors—having a small amount of debt may eventually raise your credit score.

How Can You Pay Off Your Credit Card Debt?

When credit card debt becomes overwhelming and high interest rates hover overhead, it is reassuring to know that there are alternative solutions available to reduce credit utilization and handle the debt more responsibly.

  • Resolving Credit Card Balances

If you have plenty of money, paying off all credit card debt as soon as possible is the fastest way to reduce debt. Naturally, this depends on having access to liquidity, which isn’t always possible. Creating a budget to pay off debts gradually can help, even if interest begins to mount.

  • Looking for a Personal Loan

Personal loans are a more affordable option for cardholders who want more time to pay off their debt. Compared to credit cards, these loans frequently have much lower interest rates.

Applicants with subpar credit can get a co-signer who is a friend or relative with good credit. This partnership might cause the applicant’s interest rate to drop even more. As a result, cardholders can simplify repayment over time by combining several credit card debts into a single personal loan.

Another way to access credit at a reduced interest rate is to use a Home Equity Line Of Credit (HELOC). Remember to use credit cards responsibly once the debt is consolidated into a personal loan.

  • Requesting a Balance Transfer

Certain credit cards offer new users 0% promotional interest rates on balance transfers. Overdrafted credit card debt can be transferred to a new card by cardholders.

However, certain disadvantages accompany this decision, mainly the fact that balance transfers are subject to restrictions. Only the new cardholder’s credit limit may be transferred, and balance transfers usually come with a one-time fee that raises the total amount owed. Cardholders will be charged for each transfer if they wish to combine more than one debt.

Cardholders need to remember that interest will begin to accumulate if the balance remains unpaid at the end of the promotional period. Frequently, the card issuer’s minimum payment is insufficient to settle the transferred amount.

Read More : Personal Loan to Pay Off Credit Card Debt


To sum up, figuring out how much credit card debt is a lot requires careful evaluation of your financial status and money management techniques in order to find the right balance for managing your debt.

Epic Loans can assist you in managing your credit card debt by providing a debt consolidation plan tailored to your specific needs. You are still eligible for a credit card debt consolidation loan even with subpar credit or a lot of debt owing to the wide selection of lenders and service providers we work with. To learn more, schedule a free consultation with an Epic Loans representative!

Frequently Asked Questions

What is considered a lot of credit card debt?

Each cardholder’s definition of “too much” credit card debt differs depending on their unique financial situation. The average consumer debt on credit cards in 2022 was $5,589. Some may consider this an exorbitant amount, but others may see it as their usual monthly credit card expense.

Will too much credit card debt hurt your credit score?

The amount of debt you have on your credit card greatly impacts your credit score. It is best to avoid using your credit card to its limit, as this could result in a lower credit score. If your credit score is low, any subsequent loans or credit cards you apply for might have higher interest rates. Your applications for other services, like phone plans, apartment rentals, and more, might be affected by a lower credit score.