What Happens if You Exceed Your Credit Card Limit
Credit cards can expand your economic reach and provide you with a level of economic security in the face of the unknown. Credit cards, however, can also lead to financial trouble, and exceeding your credit limit is a prime example. If you are facing concerns related to a credit card – or credit cards – reach out for the skilled legal guidance of an experienced debt relief attorney.
The Average Balance
Experian – one of the primary credit reporting agencies – shares that, in the second quarter of 2023, the average credit card balance was $6,365, and the average credit card interest rate exceeded 22 percent. Credit limits reflect the amount of credit lenders extend to individuals based on a wide range of relevant financial variables, and as balances creep upward, the risk of exceeding set limits increases significantly.
The Potential Consequences of Going Over Your Limit
The consequences of using your card beyond its set limit vary according to the lender’s policies, but common outcomes include the following:
- The purchase you’re making may be declined outright.
- You may face fees in response to the overage.
- You may be required to immediately repay the amount in excess of your limit.
- The interest rate you pay on your card balance may increase.
- The minimum payment you’re required to make on the card may increase.
- Your credit limit may be reduced.
- Your credit score can take a hit.
- Your account may be frozen or entirely shut down.
If you’re concerned about the possibility of exceeding a credit card’s limit, you can very likely set up alerts that are triggered when a balance threshold is reached through your online account.
The Golden Rule of Credit Card Scores
While spending beyond the limit set for a specific credit card may provide you with a temporary fix, the long-term implications tend to far outweigh the convenience. A better plan is staying as far away from the set limit as possible. The golden rule for credit cards has always been carrying about 30 percent of the limit, but in recent years, experts have tweaked this downward to about 10 percent.
Your Credit Limit
If your credit limit doesn’t align with your income and spending power, it may be time to either get a new card or to have your limit increased. If you have a solid credit score and a steady income that supports a higher limit, finding a card that better serves your needs shouldn’t be difficult.
It’s Time to Consult with an Experienced South Carolina Debt Relief Attorney
If you’re experiencing the negative consequences of exceeding your credit card’s limit – or of any other credit card dilemmas – there may be a better option available. The formidable debt relief attorneys at Reed Law Firm dedicate their practice to helping clients like you master their credit card concerns – in the protection of their financial futures. Learn more about what we can do to help by contacting us online or calling us at 803-726-4888 in Columbia, South Carolina, or at 843-679-0077 in Florence, South Carolina, today.
