The credit card limit you’re assigned when you’re approved for a new card dictates how much in purchases you can charge to the card. This limit also includes interest charges, fees, balance transfers and cash advances.
If you hit that limit, there’s a high likelihood your transaction will be declined, but that’s not always the case. In fact, some credit issuers allow cardholders to opt into an over-limit protection plan that lets them make charges above their limit in exchange for paying over-limit fees.
What is your credit card limit?
Your credit card limit is the total amount of money that can be charged to your credit card account. This limit includes purchases, balance transfers, annual fees, interest charges, cash advances and any other money you may owe your credit card issuer.
Your credit limit is generally determined by your credit score, but it may vary across card issuers. For example, someone just starting out on their credit journey may have a credit limit of only $500, while a more established credit user may get approved for a $5,000 credit limit, a $10,000 limit or even more than that.
Many credit card issuers will automatically increase your credit card limit after a period of responsible credit use. And if you’ve been paying off your credit card bills on time for several months or years, you can always request a credit limit increase as well.
Some credit cards are also known for offering higher-than average limits, so if you want a larger credit line, consider applying for a high-limit credit card.
What happens if you exceed your credit card limit?
If you make a purchase that puts you over your credit limit, your transaction is likely to be declined. Most card providers let you sign up for credit card notifications to warn you if you’re approaching your credit limit.
On the off chance your credit card lets you exceed your credit limit, you may be on the hook for over-limit fees -- though these fees are less common since the Credit Card Act of 2009.
Credit card over-limit protection and over-limit fees
Some credit card issuers offer over-limit protection, an opt-in service that allows you to make over-limit charges on your credit card. Most credit issuers that offer over-limit protection plans charge an over-limit fee every time you go over your credit card limit, so keep that in mind before you sign up.
Over-limit fees generally range between $25 to $35, but can’t exceed the amount over your credit limit. For instance, if you spend $10 over your credit line, you’ll only be on the hook for a $10 fee, instead of a potential $35 over-limit fee.
Over-limit protection can help you in an emergency, but going over your credit card limit could hurt your credit score -- and adding over-limit fees to a maxed-out credit card could make it harder to pay off your credit card debt.
Does going over your credit limit increase your APR?
In some cases, going over your credit limit could trigger a penalty APR. Credit card issuers may activate these penalty interest rates when you miss a payment or attempt to make over-limit charges. Read your credit card’s terms and conditions to learn whether going over your credit limit could increase your APR.
What happens if interest charges put you over your credit card limit?
In some cases, an interest charge or credit card fee could put you over your credit limit. Your credit issuer will generally allow these charges to go through, even if you don’t have over-limit protection, but you may not be able to make any new purchases on your credit card until you pay off enough of your balance to drop below your credit limit again.
How does going over your credit limit affect your credit score?
Going over your credit limit could hurt your credit score in two ways. First, spending more than your credit limit has a negative effect on your credit utilization ratio -- a measurement of how much debt you carry versus available credit.
If you exceed your credit limit, your debt becomes higher than your available credit, raising your credit utilization ratio and flagging you as a potential credit risk to other card providers.
Going over your credit limit could also put your credit card account into default and lead to a derogatory mark on your credit report, according to Experian. Either way, you’re going to be dealing with the consequences of a lower credit score -- and if your score drops too much, you might have to work your way out of bad credit.
Should you request a higher credit limit?
You can always call your card issuer and ask for a higher credit limit. Not only can this help you secure more available credit to use for purchases, but it can also lower your current credit utilization ratio and potentially boost your credit score.
Your card issuer may be leery of assigning you a higher credit limit if you already have a high credit utilization ratio. A high credit utilization can indicate that you’re overextended financially.
How to prevent going over your credit limit
There are several steps you can take to avoid going over your credit limit, including creating a budget, setting up alerts and ensuring you have more available credit at your fingertips.
Create a budget
Using credit cards alongside a monthly budget can help you only spend the money you already have. By using a credit card in conjunction with a budget, you can track how much of your credit you’ve used and potentially limit charges to what you know you can pay off immediately.
Set up spending alerts
Most credit cards let you set up account alerts that notify you when you make a purchase or when a payment is due. You can also use these alerts to track how close you’re getting to your credit limit, and can even set up automated bill payments.
Get another credit card
We don’t advise you to apply for a new credit card if you’re struggling with existing credit card debt, but adding another card would increase your available credit.
One alternative would be to consider a balance transfer credit card. These cards are designed to let you transfer existing credit card balances to the new card so you can work to pay them down while avoiding interest charges.
Balance transfer credit cards provide an introductory 0% APR for anywhere from 12 to 21 months where interest won’t accrue on your card’s balance. However, you’ll typically have to pay a transfer fee of 3% or 5% of the transferred balance. This fee is then added to the balance on the new credit card.
As you pay off the debt, your credit utilization will decrease, which can reflect favorably on your credit score.
The bottom line
If you go over your credit card limit, your purchase could be declined, depending on your card issuer If you opt into over-limit protection, the charge could go through, but you might have to pay an over-limit fee that will stack on top of your existing credit card debt.
We don’t recommend going over your credit limit if you can help it, since it could have a long-term negative effect on your credit score -- and may increase your overall debt.
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