Credit cycling is the practice of repeatedly maxing out your credit card, paying off the balance, and then charging more within the same billing cycle. Essentially, it means using your full credit limit multiple times in one billing period, which allows you to spend more than your credit limit in total during that cycle. For example, if your credit limit is $1,000, you might charge $1,000, pay it off, and then charge another $1,000 within the same month, effectively spending $2,000 despite the $1,000 limit
. This strategy is sometimes used to increase spending power without requesting a credit limit increase and to maximize credit card rewards or bonuses. However, it requires careful timing, understanding your card's billing cycle, and making payments before the statement closing date to keep reported credit utilization low
. Despite its potential benefits, credit cycling has significant downsides. It can negatively impact your credit score because frequent high utilization is seen as a risk factor by credit scoring models, even if you pay on time. Scores can drop by 50 points or more due to this behavior. Additionally, banks may view credit cycling as risky behavior and could close your account or revoke rewards
. In summary, credit cycling involves using and paying off your credit card multiple times within a billing cycle to exceed your credit limit in total spending, but it carries risks to your credit score and relationship with your bank
