5 ms·

Your balance is irrelevant - your available credit line is debt, as at any moment you can be liable for up to that amount.

• mikeash 13y ago
  If I have a $10,000 credit limit and $0 balance, my debt is $10,000? At any moment I can be liable for up to $10,000? How does that work?
  • rosser 13y ago
    How does that work? It doesn't. The GP comment is FUD.
    • waterlesscloud 13y ago
      It is, however, an element of your credit score.
      • deleted 13y ago
        [deleted]
      • mkopinsky 13y ago
        Credit utilization is another element though. It's bad if you have too big a line of credit, but good if you have a historically low ratio of (debt/available credit).
      • caw 13y ago
        In that your credit score has a factor of actual debt to total credit. Someone with $1000 of debt on $100,000 in credit is much better off than someone with $1000 of debt on $5,000 of credit. So things like car loans and mortgages could be bad, since they start at 100% and go down.
  • marshray 13y ago
    If you're uninsured in the US and break your leg, yes, your debt is now $10,000.
    • mikeash 13y ago
      Or much higher, but this is unrelated to credit cards.
      • marshray 13y ago
        "A credit card would give me the ability to instantaneously take on $10,000 in debt. I don't want this." is a responsible and admirable position for someone to take.
        • mikeash 13y ago
          Agreed, but once again irrelevant, as that's not what anybody in this thread of conversation has said.
    • rosser 13y ago
      ...which is utterly irrelevant to credit cards.
• doktrin 13y ago
  Your available credit line is not debt, and I can't recall ever hearing of anyone being held accountable for fraudulent purchases made against their account. Does this happen?
  • mikeash 13y ago
    In the US, you have zero liability for fraudulent charges made on your card without a valid signature, by law.
  • dllthomas 13y ago
    I wound up being held accountable for a small amount because I missed a deadline in the follow-up paperwork. So yes, it happens, but only when it doesn't matter much.
  • ahonhn 13y ago
    Credit card terms vary from country to country. Here (Singapore) card conditions were recently changed so that you would only be liable for the first $100 of fraudulent transactions (assuming you can prove it wasn't you). I think the bank can still hold you liable for more if they find you were negligent about guarding your card details. Prior to these condition changes, I remember being told by the bank that you would be liable for all charges incurred before you had reported the card physically stolen or lost.