Credit card over the limit fees 101

Duran Mueller
Jun 18, 2007
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Every credit card has a spending limit associated with it. This limit is decided by the credit card issuer based on your credit history, financial health and repayment record. Whenever a credit card holder goes overboard and spends more than his credit limit, the credit card companies slap an over the limit fees on him.

So, over the limit fees is a penalty to cross your credit limits. The credit card issuing companies generally add anything between $20 to $40 to your monthly statement when you jump credit limits. The over the limit fees are generally mentioned in the terms and conditions that come with the credit card. Since, not too many of us care about those fine prints, very few know about their credit limits and even less know that anything such as over the limit fees exists. It is only when one such ignorant credit card holder goes out on a spending spree and gets the penalty, he comes to know about existence of any such fees.

When a credit card company finds that a particular credit card holder has crossed his credit limits it can either decline the purchase or transaction altogether or approve the purchase and charge an over the limit fees to the credit card holder.

If a person is having exceptionally good relation with the credit card company and his credit history and repayment terms inspire tremendous confidence to the credit card issuer they might waive the over the credit limit fees and increase his credit limits to cover the extra expenditure. However this is particularly rare.

Avoiding over the limit penalty is pretty simple and it only takes few conscious decisions on the part of credit card holder.

If a credit card holder monitors his spending closely and gets the required information about the credit limits of a particular credit card, he can easily stay within spending limits. Many credit card companies do their bit to inform a credit card holder when he is nearing his credit limit. They regularly send email alerts to such a customer. Signing up for email alerts from the credit card issuer will definitely ring the warning bells well in advance. If a credit card holder sincerely believes his future transactions are going to cross the credit limits he can get the credit limits raised in advance.

Over the limit credit fees are charged generally due to the negligence and callousness on the part of credit card holder. Staying within credit limits is a good financial habit and should be imbibed in the life very early. This will easily keep over the limit penalty at bay.