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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.
| Provider | Notes |
|---|---|
| American Express |
|
| ANZ |
|
| Bank of Melbourne |
|
| BankSA |
|
| Bankwest |
|
| Citi |
|
| Commonwealth Bank |
|
| CUA |
|
| HSBC |
|
| Latitude Financial Services |
|
| NAB |
|
| St.George |
|
| Virgin Money |
|
| Westpac |
|
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.
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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.
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Ask an Expert
Can your credit card company allow you to go over your limit by $4,000 and not notify you that you are over your limit?
Hi Rick,
Please note that finder is an Australian comparison website and general information service. While we do not represent any company we feature on our pages, we can offer you general advice.
Kindly contact the credit card company that you are referring to. You may also chat with us if you need further assistance on general questions that you may have.
Best regards,
Judith
If you have an overlimit facility in place with your bank can a merchants own bank setup stop your bank from pushing your card over its limit? Eg $20 available on your card to spend but you have a direct debit with Jane Doe worth $30. You have the overlimit facility with your bank up to $500 but something in Jane Doe’s own setup knows you’re over your limit and will decline the payment? Can that happen?
Hi Paula,
Thanks for your inquiry.
Basically, yes, a merchant/store can deny a card transaction for a number of different reasons, and one of these is if your card doesn’t have enough funds. If your bank allows you to go over your limit, you would need to contact your bank so this facility is activated. Usually, even this facility is already active, there would be instances that the merchants may still decline your card. So when this happens, the usual immediate solution is that the merchant should call your bank and pass the phone to you so you can verify some details. Best to contact your bank as well to confirm what to do for any future transaction such as this.
Cheers,
May
Thanks May. Thank you so much for responding. What would you say if I said that for years prior to a certain date these different merchants did allow transactions to go over the limit but after that date they all started declining them, every time, and all different merchants. And the bank says that nothing has changed with the account and the overlimit facility is still active. How would you deal with that?
Hi Paula,
Thanks for getting back.
The acceptance of a card payment is basically depending on the merchant’s discretion, as they are entitled to accept any form of payment they wish for their services. Although I am not really sure why would they not accept your card with an activated over-limit facility, they may have their reasons for doing so. Since your bank has activated your over-limit facility and they have no problem if you will use the facility, it would be best then to maybe obtain an explanation from the merchant why they would decline your card.
By the way, just to confirm though, as we are comparison website and general information service, we can only offer suitable general advice to any questions you have.
Cheers,
May
Thanks May.
I totally understand it’s general advice and I’ll only take what you say as guidance, not gospel. I’m just at a loss to resolve this and don’t know who else I can speak to. I have spoken to one merchant who said they have no interest in my own situation and therefore would not suddenly start blocking payments. Just to clarify it’s all merchants eg RACV insurance, Apple iTunes, Netflix, Spotify etc. They all would push payments through previously and now they all don’t. I fail to believe that every merchant I deal with have all decided to decline payments at the same time.
I was hoping to get more an idea on what happens in the back end at the bank because I think it must have to be them somehow.
Hi Paula,
Thanks for your message as well.
I completely understand that you’d want this issue resolved. Yes, best to contact your bank too, they may have implemented some conditions on your over-limit facility that could prevent the debiting of payments for the merchants you’ve mentioned.
Cheers,
May