Going over your credit card limit
What happens when you spend more than your credit limit and whether or not you'll be charged.
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Depending on your bank or credit card issuer, an over-limit transaction may be declined, approved and subject to a fee, or approved with the expectation it is immediately paid back.
If you're struggling to make repayments, you should contact your bank immediately to discuss your options. They may be able to organise a repayment plan to help you get your debt under control. Another option is a balance transfer credit card that allows you to pay 0% p.a. interest for a set number of months (usually up to 24).
Over limit policies
As long as your card wasn't opened before 2012, the following apply. If your account was opened before 2012, please contact your bank directly to enquire about overlimit fees.
|Bank of Melbourne|
|Latitude Financial Services|
How much can I go over my credit limit?
If your bank or lender allows you to overdraw your account and exceed your credit limit, typically, you must repay the overage amount immediately. If your card doesn't allow you to go over your credit limit, the transaction may be declined and you'll be unable to use your card until you pay down some of the balance. If you do need to spend more than your credit limit, contact your bank and discuss your options for requesting a credit limit increase.
Balance Transfer Offers
How to avoid going over your credit limit
Although some issuers give you the option to spend beyond your limit and be charged a fee, it's best to spend responsibly and within your limit. Here are some tips to help you avoid going over your limit:
Repay your balance in full each month
You should always aim to pay off your credit card balance at the end of each statement period so that you can avoid interest. If you can't afford to pay it off in full, you should still attempt to clear as much of the debt as you can. Not only will you reduce your interest costs, but you'll also avoid going over your credit limit.
If your balance is close to your credit limit, remember that any interest rates or fees (such as a cash advance fee charged after you use your card for an ATM withdrawal) could push you over your credit limit. This is why it's important to check your statement regularly and stay on top of your balance. Check out Finder's guide to paying your credit card bill on time for more tips.
Set up automatic repayments
The simplest way to ensure your bill is paid each month is to set up automatic repayments - so the balance is pulled from your bank account and you don't have to worry about remembering to manually make payments. There are a couple of ways you can easily do this, such as setting up internet banking. If you have a smartphone, you can download the bank app and monitor your balance at any time.
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.Back to top
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