What Happens if Your Credit Card Limit is Exceeded?

July 29, 2024 By: Stephanie H. - CreditMonarch Online Writer0 comments

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If you attempt to spend more than your credit card limit, your credit card company may refuse the transaction. If you choose over-limit protection, you may be permitted to go over your credit card limit, but there may be charges associated. Occasionally, it is tempting to consider maxing out your credit card to cover unexpected expenses or make a desired purchase. Reaching your credit card limit can put you at risk of exceeding it, which could have a negative impact on your finances and credit score. It’s important to have knowledge about what happens if you go over your credit limit before using your credit card to make a purchase.

Attempting to go over your credit limit may cause many issues. For example, if the transaction amount is higher than your credit limit, your credit card company may decline it. If this happens to you, you’ll have to come up with another way to pay for it before you can make the purchase. If you exceed your credit limit, you may be charged up to $35 for going over your limit. In the event that you exceed your credit limit, your credit card company may raise your interest rates.

Your credit limit may be temporarily reduced by your credit card company until you pay off your balance. If your annual income goes down, you could face a pay cut or credit reduction. If you exceed your credit limit or reach your maximum credit limit, it can have a negative impact on your credit score. The credit utilization ratio, which is the ratio between your total available credit and the credit you have used, is responsible for 30% of your overall credit score. It would be ideal to keep this ratio between 10% and 30%. Having a habit of going over your credit limit can lead to your credit card company closing your account permanently. Check out our list of recommended high credit limit credit cards below:

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