What Happens When You Go Over Your Credit Card Limit

Posted by: Sally S. | Oct 05,2007

At some point in time, it happens to almost everyone- going over your credit card limit. Often, this happens almost without noticing that you’ve reached the upper end of your balance. We’re so conditioned to always having credit that the idea that we’ve run out of money seems impossible to believe.

 

In the old days, if you got close to your limit on a department store credit card, salespeople would call the credit department and request an increased credit line. This isn’t really the norm anymore. Nowadays, if you go over your limit, the credit card company often allows it to happen, and then penalizes you in the next billing cycle. Some things to remember when you are hovering near your credit card limit: 

• Your credit card company is not going to give you a warning that tells you that you’re about to go over your limit. You need to closely monitor that on your own.
• Going over your credit card limit will almost certainly result in an over the limit fee. These vary, but over the limit fees usually will be anywhere from $35 to $50.
• Going over your credit card limit may also result in an increased APR (annual percentage rate). So, you’ll be paying for your mistake for several years.

 You need to stay on top of how much you owe your creditors. If you’re getting close to your limit on one of your credit cards, you probably should give that card a break- at least until you can get some of your debt paid off.

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