When you reach your debt ceiling, it means that you have reached the end of your credit limit.

When a line of credit is extended to you by your credit card company, it has a finite limit. Everyone’s limit will vary depending on their capacity to repay, but the debt ceiling is attached to every credit card.  There is (to my knowledge for the average “Joe”) no such thing as a credit card that has not got some restriction attached in one form or another.

No financial institution in their procedures manual, would give anyone “carte blanche” (meaning open-ended) credit with a non-restricted credit card. Even the gold cards have their limitations.

gold credit card

Your debt ceiling is reached only on that particular avenue of credit. It doesn’t mean that every other avenue of credit is reached so if you find your allowed debt ceiling has been reached on one credit card, if you were in desperate times and needed more credit and you had a good credit history, you would still be able to access more credit from other financial institutions.

However, if you have reached your debt ceiling on one credit card and have missed one or two repayments, you may find it difficult or near impossible today to get more credit from another financial institutions or credit card providers because today, everything related to your credit viability is linked into a central banking system.

This is a great protection for banks and other financial credit providers but can be devastating for anyone who suddenly finds themselves in urgent need of more money.

Credit is a system of providing money to people at a price.

Credit is money and is now a product that has become essential in today’s way of life. Credit money is a product tool that can be used in many ways.  It is up to each of us as to how we use it. If we all approached the use of credit as we would if we had a spade and wanted to dig a hole in the ground, then we all need to ask ourselves, “How many spades do I need to dig this hole?”

Most people today have got themselves into financial difficulty because we have used our credit limits unwisely.  That is, many of us are either:

• Under paid – our employment is paying too little or we aren’t getting enough hours of employment
• Under employed – We don’t have enough work to cover our living expenses so instead of living more simply; we have used our credit cards to top-up our cost of lifestyle.
• Lifestyle expectations too high – We are all trying to live up to a consumer lifestyle without the monetary means to support that style of living.

Money is just a tool and should be used as such.

If you use your available credit only as a tool with which to make money, then credit money can be a good thing providing you don’t exceed your debt ceiling and you continue to meet all your repayment responsibilities.