Spending over your credit limit

Information verified correct on December 5th, 2016

Hang swiping credit card

What happens when you spend over your credit limit?

Do you often spend over your credit limit? If the answer is yes then you're probably familiar with credit card over-limit fees. If you ever spend over your credit limit, even by as much as a dollar or two, your transaction will either be rejected or collect an over-limit fee.

Depending on the issuer, some banks give you the option to exceed your credit limit to avoid embarrassment at the cash register, but you'll be notified and charged an over-limit fee if you do.

This guide will discuss the different instances that might cause you to spend beyond your credit limit and which banks let you do this and what they'll charge.

How you might spend over your credit limit.

Whether you simply overspent or accrued some fees that pushed you over your credit limit, there are plenty of ways you might accidentally spend beyond your credit limit. The most obvious way is that you haven't repaid your balance, used your card for a purchase and spent beyond the credit limit. However, another way you could accidentally go over your credit limit is by credit card fees. Say you used your card for an ATM withdrawal, the cash advance fee as well as the amount you've withdrawn could be enough to exceed your credit limit. If a transaction like a cash advance charge takes you over your credit limit, you usually have a day to pay the balance down before the overlimit fee applies, so it can depend on how quickly you can pay down the overdrawn balance.

As of 2012, banks and credit card issuers are required to inform cardholders when they're close to reaching their credit limit, so you should receive a notification and know to either pay your balance down or leave your card at home if you're getting close to exceeding your credit limit. Most banks also give you the choice to either block the option to exceed your credit limit or the chance to exceed the limit for a fee. If you do opt to exceed your credit limit, you'll have to sign a consent form and agree to pay a charge of usually between $10 and $20.

The smartest strategy is to keep an eye on your balance, pay attention to any notifications from your bank and either pay down your balance or leave your plastic at home if you're getting close to exceeding the credit limit.

Which lenders let you spend over your credit limit and charge you for it?

ProviderNotes
Bankwest
  • Applies to all credit card accounts.
  • If debits to your credit card take you over your credit limit then an Over Limit Fee will be charged in each statement period.
  • You can opt for it not to go over the limit - contact the lender to do this.
Citibank
  • A $40 overlimit charge applies to credit card accounts opened before the 1 July 2012.
Commonwealth Bank
  • All credit card accounts - you won't be able to spend over your credit limit.
  • Overlimit fees and charges will apply if bank fees (i.e. cash advance charges/interest charges) or direct debits take you over your credit limit.
ANZ
  • Overlimit charges apply to all ANZ credit card accounts.
  • In some cases ANZ may allow you to spend over your credit limit (direct debits, cash advance charges, paypass facility (doesn't check the available funds on the card) and interest charges will all allow you to exceed your credit limit and incur an overlimit charge of $20.
Westpac
  • Whether or not you can spend over your credit limit depends on a number of factors - like your history of repayments on your account.
  • However, if your account was opened before the 4 June 2012, you may be able to exceed your credit limit.
  • You can contact Westpac and opt out of being able to exceed your credit limit.
St.George
  • An overlimit charge of $9 applies to credit card accounts opened before the 4 June 2012. All other accounts that have opted into the option to exceed the credit limit will also be charged an overlimit fee of $9.
Bank of Melbourne
  • The overlimit fee only applies to credit card accounts opened before 4 June 2012. All other accounts that have opted into the option to exceed the credit limit will also be charged an overlimit fee of $9.
BankSA
  • An overlimit charge of $9 applies to credit card accounts opened before the 4 June 2012. All other accounts that have opted into the option to exceed the credit limit will also be charged an overlimit fee of $9.
Coles
  • If you're making a purchase and you go ten or fifteen dollars over your limit, you may be allowed to exceed your credit limit.
CUA
  • No overlimit charge applies to credit card accounts opened after the 1 July 2012. If you do exceed your limit, the minimum repayment for the next statement period is the overlimit amount. If you don't pay this, you'll be charged a late payment fee of $12.50.
Latitude Financial Services
  • Applies to all credit card accounts.
  • You can not spend over your credit limit, interest charges may take you over limit; however, no fee will be charged for doing so.
HSBC
  • All credit card accounts can spend over their credit limit an overlimit charge of $30 will apply.
American Express
  • All credit card accounts are allowed to spend over limit.
  • The amount that can over limit is judged on a case by case basis factoring in things like the size of the credit limit, previous spending habits and repayment history.
NAB
  • Applies to all credit card accounts.
  • Some transactions will take you over your credit limit.
  • NAB will contact you once per statement period and inform you that you've reached your credit limit.
Virgin Money
  • A $40 charge applies to credit card accounts opened before the 1 July 2012 if they exceed the credit limit

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How to avoid going over your credit limit

Set up internet or telephone banking 

The simple answer is to keep an eye on your credit card balance. There are a couple of ways you can easily do this, such as setting up internet or telephone banking. If you have a smartphone, you can download the bank app and monitor your balance on-the-go. It's also required by law for the lender to notify you when you're about to exceed your credit limit. If you have internet and telephone banking set up, the card provider can send you an SMS notification when you're about to exceed your credit limit.

Impose a hard limit on your credit card account 

If you have a provider that allows you to spend over your credit limit, and you're sick of incurring credit card overlimit fees, the simplest solution is to give your lender a call and let them know that you want to impose a 'hard limit' on your credit card account. This means that once you reach your credit limit, any transaction that would have taken you over limit will be declined.

Comparison of credit cards that allow you to spend over your limit

Rates last updated December 5th, 2016
Purchase rate (p.a.) Balance transfer rate (p.a.) Annual fee
Virgin Australia Velocity Flyer Card - Balance Transfer Offer
Enjoy a 0% p.a. balance transfer offer for 18 months and also earn 2 bonus Velocity Points in the first 3 months on everyday spend.
20.74% p.a. 0% p.a. for 18 months $64 p.a. annual fee for the first year ($129 p.a. thereafter) Go to site More info
ANZ Low Rate
$100 Back plus 0% p.a. for the first 6 months on purchases from approval.
0% p.a. for 6 months (reverts to 13.49% p.a.) $58 p.a. Go to site More info
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