Credit card users can fall prey to the mistaken perception that their cards can be pushed to the limit without any consequences. They can bury themselves under a mound of debt, they believe, so long as they do not go over their limits and continue to pay the minimum amount each month. What these users fail to realise, however, is that the terms and conditions on their cards are extremely amendable at the lender’s discretion, and that the lender can modify those terms any time they believe the user to be carrying too much debt.

• Increased interest rates. If a card user continues to carry a balance each month, misses a payment, or employs too much of their available credit, one of the first things the card holder loses is their interest rate. Whereas, previously they enjoyed a rate in the mid to low teens, it is not unheard of for their new rate to be as high as 20% or more. This can be burdensome for making normal transactions, but when the user is already carrying a balance month to month, a dramatic jump in rates can prove devastating.
• Decreased credit limits. If a card user falls into continuous debt and does not witness a drop in their credit limit, they should consider themselves lucky. Besides spiking interest rates, plummeting credit limits are typically the next term to be altered on any card carrying too much debt. While this can negatively impact the user’s financial strength, what can make the situation even worse is if the bank drops their limit beyond their current amount due. Most often, in this situation, the card holder is considered to be in overdraft, and will then be responsible for the extra fees and penalties that this occurs, not to mention that an overdraft could bring about a further drop in their spending limit.
• Damage to credit score. Even if a user has not yet experienced an increase in interest rates or a drop in their limits, a revolving balance can still damage their credit score. Revolving balances are seen as financial risks, branding the card user as unable to pay, therefore degrading their trustworthiness. This can happen, even if the card holder has never missed a payment or been overdrafted. All that is needed is for the user to carry a balance between multiple billing cycles.
• Effects on other lines of credit. Card holders are human, and every now and then they will make a mistake, here or there. Card companies are less concerned about the isolated incidents than they are the isolated incidents that grow into patterns of irresponsible money management. To this end, lenders who check a card user’s credit report and find a revolving balance with another lender are within their rights to modify the terms and conditions of their own card with the user. This is known as the universal default clause, and card holders who think they can make due with credit card debt need to be aware of it lest they unintentionally wreck their other lines of credit.