When you go over the limit
What happens when I charge
my credit card over the limit?
You will be socked with a hefty penalty fee.
Over-the-limit fees of $29 and $35 are common.
Norm Tapper, a Bankrate.com reader in Indiana, was charged a $25
late fee and $25 over-the-limit fee on a Capital One card with a
Issuers point out that fees are spelled out
in the credit-card agreement and monthly statements list credit
limit, balance information and due dates. But a lot of people are
shocked by over-the-limit fees. In fact, most people learn about
a card's over-the-limit penalty after they get charged one.
Credit card issuers have two basic choices when
a customer makes a purchase that exceeds a credit limit. They can
decline the transaction or approve the transaction and charge a
A third option, approve the transaction and automatically lift
the credit line, is reserved for the best customers.
Today's issuers are adept at targeting card offers to a customer's
specific credit profile and that includes the handling of over-the-limit
charges. Issuers decide what customers can go over credit limits
and by how much. The last thing an issuer wants to do is decline
a card purchase.
So it looks like issuers will continue to charge bigger and bigger
fees to customers who outgrow their credit limits. Don't let it
happen to you. Here's how:
1. Monitor spending closely.
Keep track of credit card purchases and stay well within your
limit. Leave a big enough cushion on your card for large, unexpected
expenses. Some consumer experts recommend keeping one credit card
cleared for emergencies.
2. Sign up for free e-mail alerts.
Some issuers send e-mail reminders to customers who are nearing
3. Make the limit your limit.
Cardholders at Capital One can request that any limit-busting
purchase be declined at the point-of-sale. However, most companies
refuse to provide this service.
4. Call ahead and get that limit raised.
If you know you're going to go over a credit limit with a purchase,
call ahead and request a line increase. Issuers grant increases
on a case-by-case basis. It's a worth a shot and it could save
5. Check out cards from local banks and
Penalty fees are much lower, typically $5 to $15, and smaller
institutions are much more lenient when it comes to charging them.
For example, at Suncoast Schools Federal Credit Union in Tampa,
Fla., the $15 over-the-limit fee is not imposed until you exceed
the credit line by 8 percent.