Dear Experian,
What happens if your credit card goes over your limit? What are the best options in your opinion?
- JNT
Dear JNT,
Charging more than your credit card limit could result in over-the-limit fees, a decrease in your credit limit, or other penalties imposed by the credit card provider. Habitually over charging could result in the account being closed by the lender.
Some lenders may decrease your credit limits or increase your interest rates if an over-the-limit status appears in your credit history, so it could affect more than just that one credit card.
Charging more than your limit also hurts your credit scores because it is a strong indicator of poor credit management and high lending risk.
The options for resolving the problem are simple and straightforward: stop spending and start paying.
You must reduce the balance to below your credit limit. That means you have to stop making charges and start paying more than the minimum balance. In terms of creditworthiness, the lower you keep your credit card balance, the better.
The best advice is to always keep your balances low. That will help you keep the best rates on your card.
Thanks for asking.
The "Ask Experian" team