Can You Go Over Your Credit Limit?

Woman using credit card to pay for a purchase
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If your credit card comes with a credit limit, the maximum amount you’re “allowed” to charge on your credit card, you’ve probably wondered if it’s possible to go over your credit limit. Maybe you want to make a purchase larger than your available credit. Or maybe you’re just wondering what will happen if you swipe your credit card for a purchase bigger than your credit limit. Whether you can go over your credit limit is actually up to you.

You Can Opt Out of Over Limit Charges

Credit card issuers are required to give you the option to have transactions that would put you over the limit declined. You can opt in or opt out of over limit transactions at any time.

You may opt in to over limit charges to avoid the embarrassment of having your credit card declined or simply for the convenience of being able to go over your credit limit. If you’ve opted in, it means you've chosen to be able to go over your credit limit. Purchases that exceed your available credit will usually go through, but typically only by a certain amount preset by your credit card issuer.

Opting out, on the other hand, would cause any transaction that would exceed your credit limit to be declined. This can save you from any credit limit fees your credit card issuer charges. It also keeps you from going over your limit and creating more debt than you can afford to repay.

Once your balance is already over your credit limit, additional transactions may be declined since you don't have any additional available credit. This can happen even if you’ve opted-in.

No More Over Limit Fees?

Many credit cards have eliminated credit limit fees that would be charged if you go over your credit limit. Credit card issuers that do charge fees have to follow certain rules.

If your card issuer does charge a fee, the fee can’t exceed the amount that you’ve gone over your limit. For example, if you go over your credit limit by $15, the maximum fee you can be charged is $15. Check your credit card terms or call the card's customer service to find out whether you'll be charged a fee for going over the limit and the amount of the fee you'll be charged.

Even if your credit card issuer doesn’t charge a fee, there may be other penalties for going over your credit limit. Going over your credit limit may trigger the penalty rate, the highest interest rate charged on your credit card. The credit card issuer may raise your minimum payment to compensate for the amount that you’ve exceeded your credit limit.

Going over your credit limit is a sign that you’re not able to manage your credit. Even though they may permit you to exceed your limit, credit card issuers may view it unfavorably. Some credit card issuers may even lower your credit limit or close your credit card account.

Impact of Going Over Your Credit Limit

Your credit score could be impacted if your credit card balance is over the limit when your creditor reports your account to the credit bureau, which is typically on your account statement closing date. An over-the-limit credit card balance increases your credit utilization and could lower your credit score. You can avoid having the high utilization reported to the three national credit bureaus (Equifax, Experian and TransUnion) by paying your balance down before your account statement closes.

If you need to make a purchase that would exceed your available credit, first ask your credit card issuer for a credit limit increase. You can also try splitting the transaction, paying for a portion on your credit card and the remainder using a debit card or cash.

Frequently Asked Questions (FAQs)

How can you increase your credit limit?

Getting a credit limit increase can sometimes be as easy as asking for it. Simply call customer service and ask a representative if you can have a credit limit increase. If your credit limit increase is denied, ask for advice about how to get it approved next time around. You may just need to wait a little longer, or you may need to work on your credit score.

What is the average credit limit in the U.S.?

According to Experian, the average credit limit for U.S. consumers between the ages of 18 and 23 in 2020 was $8,064. The average limit was $20,652 for those between the ages of 24 to 39, $33,363 for those ages 40 to 55, $39,915 for those ages 56 to 74, and $33,603 for those 75 and older.