What is a credit limit?
If you have a credit card, you have a credit limit. As you might expect by the name, that limit is the total amount you can spend on a card without "maxing it out."
But what you might not know about that limit is that getting anywhere close to it is going to cause major damage to your credit standing. In fact, 30 percent of your score is based on how much of your total combined limits - across all your accounts - you're using at any given time. That means the more you owe, the lower your score is going to be.
A good rule of thumb is to keep your outstanding balances at less than 30 percent of your total limits (if you have cards with a combined limit of $10,000, you shouldn't owe more than $3,000) to get the best score possible. If you owe more than that already, you might want to take serious steps to pay down that debt.