Keep credit card debt amounts away from limits

Though consumers may have a certain available amount on their credit card debt limits, that doesn’t mean they should make use of it all.

In a recent column for the Los Angeles Times, Liz Pulliam Weston responded to a reader who had their one of their accounts closed because they were close to their credit card debt limit. Being upset, the reader wanted to know to whom they could make a complaint about the closed account.

Though Pulliam Weston listed a number of organizations the reader might try, what she also noted was that it is important for consumers to keep the percentage of their credit usage low. People who are closer to their limits may appear to be riskier clients to credit card companies.

“People who use most of their available credit are statistically more likely to default,” Pulliam Weston said. “That’s why it’s prudent to use as little of your credit as possible – less than 30 percent of each limit is good; less than 10 percent is better.”

Recent numbers from the Federal Reserve show that more people may be pulling back on using credit cards. According to the Fed, the annual rate of revolving consumer credit – a large portion of which is credit card debt – fell by 8 percent during July.