What are credit card overlimit fees?

Understand when overlimit fees apply to your credit card and how you can avoid them.

Before 2012, credit card providers generally allowed cardholders to exceed their credit limits, charging them an overlimit fee each time this happened. While this would see careless cardholders racking up extra fees, it also meant that you wouldn’t have to suffer the embarrassment of having your card declined in-store. Credit card reforms have changed the way banks deal with overlimit fees. Cardholders now have to opt in to allow credit card increases to help keep debts in check. This guide will explain the overlimit reform and how it impacts the way you use your credit card.

The credit overlimit reform

Following credit card reforms in 2012, lenders are no longer allowed to charge overlimit fees on credit card contracts established after 1 July 2012. However, this also meant that cardholders aren’t given the opportunity to exceed their credit limit. You have to keep a close eye on your credit card activity to avoid exceeding your limit and having your transaction cancelled.

How this impacts my credit card use

The reform affects two groups of cardholders in two different ways:

  • Cardholders of accounts established before 1 July 2012.

If you hold a credit card contracted before the reforms, you are likely still able to exceed your credit limit and be charged an overlimit fee. You can choose to opt out of this option by contacting your card provider. You can also consider cancelling this card and applying for a new credit card so you can enjoy the full benefit of the credit card reforms, including the order that your credit card payments are allocated.

  • Cardholders of accounts established after 1 July 2012.

If your credit card is contracted after the reforms, you are legislatively protected from overlimit fees. If you’d prefer to exceed your limit and don’t mind paying overlimit fees, you may opt in by contacting your card provider and consenting to the payment of overlimit fees. An alternative is to request a credit limit increase or apply for another card with a higher limit.

How to request an overlimit option for my credit card

The process requires a simple phone call or a few minutes online. Here’s how you can opt in or out of being able to exceed your credit limit with different credit card providers:

BankHow to opt in/out of overlimit option
American ExpressAmerican Express has not charged overlimit fees since 2009.
ANZSign into ANZ internet banking, select your credit card account then select. “Informal Overlimit Service” under Account Overview and follow the prompts. Otherwise, you may also call 13 22 73 or visit any ANZ branch to provide or withdraw your consent.
Bank of MelbourneContact the bank directly to discuss your account options at 13 22 66 or visit any bank branch.
BankwestVisit a Bankwest branch or call 13 17 19 to speak to a consultant.
CitiCall Citiphone at 13 24 84 to opt in or out of the Overlimit Service.
Coles MastercardCall 1300 306 397 to discuss your options.
Commonwealth BankVisit any CommBank branch or call 13 22 21 to discuss your overlimit options.
HSBCCall 132 152 (or +61 2 9005 8511 from overseas), visit an HSBC branch or log on to Credit Cards Online to process your request.
NABNAB abolished all credit card overlimit fees in 2009.
St. GeorgeVisit a St. George bank branch or call 1300 784 934 to discuss your overlimit options.
WestpacVisit any Westpac branch or call 1300 130 961 to discuss your overlimit options.

Fortunately, credit reporting in Australia does not include information about credit card account balances, so overlimits do not directly impact your credit score. However, a tendency to always borrow up to and beyond your available credit can result in more debt. If you’re constantly reaching your credit limit, consider requesting a credit limit increase or getting a new credit card with a higher limit instead of losing money to overlimit fees.

Picture: Shutterstock

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Sally McMullen

Sally McMullen is an editor at who is a credit cards and frequent flyer expert by day and music maven by night.

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