[mikeash]

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]

How does that work?

It doesn't. The GP comment is FUD.

[waterlesscloud]

It is, however, an element of your credit score.

[caw]

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.

[mkopinsky]

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).

[marshray]

If you're uninsured in the US and break your leg, yes, your debt is now $10,000.

[rosser]

...which is utterly irrelevant to credit cards.

[mikeash]

Or much higher, but this is unrelated to credit cards.

[marshray]

"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]

Agreed, but once again irrelevant, as that's not what anybody in this thread of conversation has said.