Can you go over your credit limit?

If you have a credit card, you have a credit limit. 

Your credit limit is the total amount you can borrow on your card, including purchases, interest and fees. Every card has its own credit limit based on your lender, credit score and credit report. But sometimes — if you’re in a crunch — you may ask: Can you go over your credit limit?

The answer, technically, is yes. But it’s not that simple. 

Can you overcharge a credit card?

Yes, it’s possible to exceed your credit limit but usually only in specific circumstances. 

Thanks to the Credit Card Accountability and Responsibility Disclosure (CARD) Act of 2009, lenders can’t charge over-credit-card-limit fees without user authorization. Instead of giving up income on over-credit-limit fees, credit card issuers shut down over-limit programs entirely. 

Now, most over-limit transactions are simply denied when you try to make purchases exceeding your credit limit. 

Consequences of going over your credit limit

Some lenders offer the ability to overcharge your card while others don’t. But just because you can overcharge doesn’t mean you should — or that you won’t experience negative consequences.  

Your transaction could be declined

If you don’t opt into your card issuer’s over-limit protection program, the most likely consequence of exceeding your credit limit is a denied transaction. 

You may have to pay fees

If you do participate in your card issuer’s over-credit-card-limit program, you may have to pay a fee. 

The Credit CARD Act of 2009 restricts issuers to one fee per billing period. The fee also must be no higher than the amount you overcharge. If you go over your credit limit by $15, the maximum fee is $15.  

Your interest rate could go up

If you exceed your credit limit on a specific card, your issuer may view you as a potential borrowing risk. It may increase your regular interest rate or hit you with a penalty annual percentage rate (APR), which is usually much higher than your regular rate. 

But the damage isn’t necessarily limited to one. If your credit score changes as a result, other card issuers may respond by hiking your rate, creating a domino effect.

Your credit score may decrease

A whopping 30% of your credit score is based on your credit utilization ratio — the amount you borrow versus the total amount you have available. Generally, lenders like to see your ratio below 30% on each card and overall. 

Going over your credit limit means you’ve exceeded the ideal utilization ratio, and your credit score may drop. 

Your credit limit could decrease

Lenders don’t like to see borrowers make risky decisions. If you try to overcharge too many times, your lender(s) may lower your credit limit. In turn, your credit utilization ratio may increase and hurt your credit score. 

Your credit card issuer may close your account

If you push your credit card over the limit too many times, your lender may consider you a high-risk borrower and close your account to limit its risks. You’ll still have to repay your full balance, though. 

Why you should opt out of credit card over-limit charges

Legally, credit card companies have to give you the option between paying over-limit charges or not. If you choose not to accept these charges, your card will be denied on over-limit transactions. 

Even with these protections, being denied too many times may still result in a lower limit or higher interest rates. But that happens over time — and keeping that barrier in place gives you a chance to build good credit habits.

How to increase your credit limit and avoid overcharging

If you need more purchasing power in your pocket, consider the following ways to avoid exceeding your credit card limit.

Request a credit limit increase from your issuer

A credit limit increase can breathe a little wiggle room into your wallet. You’re most likely to be approved for a limit increase if you have good credit and a history of on-time payments. Check your credit score before applying. You can usually request an increase by calling your card issuer or logging into the online portal or app. 

Watch your credit card balances

You can use your online credit card app to monitor your current balance and available credit. Keeping an eye on your limits helps you budget accordingly and spend below your means.

Pay off your balances at the end of the month

Paying off your credit cards in full — or at least as much as you can — gives you more credit to spend later. Plus, reducing your balance lowers your credit utilization ratio and can boost your score. One of the best ways to avoid carrying a balance is to pay off your card every time you use it. 

Apply for a balance-transfer credit card

If you’re struggling to pay off your current balance, a balance-transfer credit card can help. These cards often offer 0% APR for six to 21 months when you sign up, giving you time to repay your debt without paying interest. Note that they do typically charge a one-time fee of 3% to 5%. Still, that’s better than 15% to 25% on a revolving balance.   

Can you go over your credit limit? Yes. But should you?

Generally, going over your credit limit is a bad idea, even if your card issuer offers the option. Instead, try sticking to a budget, keeping your balances low and building good credit habits to last a lifetime. 

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