When the little trolls with the green visors determine your credit score, a big factor in their abacus-shuffling is how much percent of your credit limit you’re using. However, it’s not just your total credit utilization, all of your credit limits added together and divided by how much of that you’ve tapped, but also how much of each credit line you’re using, the individual credit utilization. Say what?
Next time you brush past your credit limit you may get hit with more than a hefty over-the-limit fee. The Red Tape Chronicles reports that credit card companies are starting to slap exuberant spenders with penalty interest rates. Compounding the danger to consumers, creditors are simultaneously rushing to slash credit limits.