Over-the-limit credit card transactions are approved or denied on a case-by-case basis. There is no set amount by which you can exceed your credit card limit and no set number of times you can go over the limit. Decisions will be made based on your credit profile, the usage history of your credit card, and your general spending habits.
Additionally, over-the-limit transactions are dependent on whether you opted in for over-limit protection. The Credit Card Accountability, Responsibility, and Disclosure Act of 2009 (Credit CARD Act) requires cardholders to opt-in to receive over-limit purchase coverage.
Keep in mind that even if you opt-in for over-the-limit transactions, your credit card issuer can still deny such charges based on your history and account status. Additionally, if you are close to your credit limit, an annual fee and/or interest charges may push you over the limit.
Over-the-Limit Policies by Credit Issuer
To find out about over-the-limit credit card transactions, we contacted representatives and viewed cardholder agreements for the largest credit card issuers in the U.S. We found that the following credit card issuers approve and deny over-the-limit transactions on an individual basis with no set amount limit and do not charge over-the-limit fees:
- Bank of America
- Capital One
- Chase Bank
- Comenity Bank
- Synchrony Bank
- U.S. Bank
- Wells Fargo
American Express also approves over-limit purchases on a case-by-case basis and does not charge an over-the-limit fee. However, it offers an additional feature — the Check Spending Power tool — that allows cardholders to log in online or in the mobile app to find out whether a purchase of a particular amount is likely to be approved. (Note: Using the Check Spending Power tool does not require a hard pull of your credit and will not damage your credit score.)
Consequences of Over-the-Limit Transactions
Under the Credit CARD Act, issuers cannot charge fees greater than the amount you go over; for example, if you go over your limit by $20, the fee cannot be more than $20. Additionally, in most cases, credit card issuers can only charge one over-the-limit fee per billing cycle. At the time of this writing, due to the limit on such fees, most credit card issuers choose not to charge over-the-limit transaction fees.
While the Credit CARD Act has increased cardholder protections against fees, the credit card company can impose other penalties if you exceed your limit. The credit card issuer may:
- Require immediate repayment of the over-limit amount
- Report over-limit amounts to the credit bureaus
- Decrease your credit limit
- Increase your minimum payment
- Increase your interest rate
- Close or suspend your account
Maintaining high credit utilization — in other words, using most or all of your credit limit or exceeding it — can also damage your credit score.
How to Avoid Over-the-Limit Transactions
Because of the consequences of over-the-limit spending detailed above, you may want to consider an alternate way to pay before attempting to spend over your credit limit. A few options include:
Splitting the Purchase
If you are able, pay for a portion of your purchase with cash or a debit card. This will not only help you avoid exceeding your credit limit but will also help you pay less interest than you would if you aren’t able to pay your credit card balance in full.
Requesting a Credit Limit Increase
If the purchase that will put your card over its limit can wait, you may want to consider requesting a credit limit increase — even a temporary increase. A credit limit increase does not necessarily require an increase in your income; if you keep your account in good standing for six to 12 months by making consistent, on-time payments, you may be eligible for an automatic credit limit increase. You can also request an increase to your credit line by contacting your card issuer’s customer service department. Some companies will also allow you to make credit limit increase requests online or through their mobile apps.
Note that you may not be eligible for a credit limit increase if you are already carrying a high balance on your credit card. See our related article for information about how credit card issuers determine your credit limit.
Using a Charge Card
Unlike credit cards, charge cards typically do not have a strict, preset spending limit. You can make a large purchase on a charge card without worrying about whether or not you will exceed your limit or whether or not the issuer will deny your transaction.
Charge cards are also somewhat different than credit cards in that they usually require you to pay your balance in full each month. As such, charge cards are not an option for cardholders who prefer to pay off purchases over time by making monthly payments.
However, they may be a suitable option for cardholders with very good to excellent credit who prefer a variable spend limit, can pay off purchases within one billing cycle, and/or want to earn rewards without carrying a credit card balance.