 TITLE: What Happens When You Go Over Your Credit Limit? CONTENT: How Does Going Over Your Credit Limit Work?\n-------------------------------------------\nDepending on your credit issuer, you may be able to spend more than the credit limit that's attached to your account. Instead of the transaction being declined when you attempt to pay, it can go through as long as the issuer allows it. That can happen if you have a long history of treating that account responsibly. You may also have opted in for over-limit protection, which gives you the opportunity to charge more than your credit limit.\nBut there are several negative consequences you may face for going over your credit limit. What they can be depends largely on the credit issuer's policies and your credit history, as well as whether you opted in for over-limit protection.\nCommon outcomes include:\n*   **Declined purchase**: Unless the issuer approves the purchase or if you enrolled in over-limit protection, the transaction will not go through if you have already hit your credit limit. That can put you in a bad financial place if you need something and have no other way to pay.\n*   **Extra costs**: Although the advantage of over-limit protection is that you can charge more than you're technically allowed to, the disadvantage is that the credit issuer can charge you a fee for that privilege. According to the federal Credit CARD Act, the fee can be $25 the first time you go over the limit and $35 other times you do so within a six-month period. If you make this a frequent practice, those fees will rack up. There's also the larger interest charges a maxed-out balance is likely to incur.\n*   **Account goes into default**: If you go over your credit limit, your account may be considered in default. The credit issuer may then hike up your interest rate and reduce your credit limit. It may even cancel or suspend the card or increase the minimum requested payment.\n*   **Sticker shock once a no-interest period ends**: If your card offers a 0% APR intro period, you may be tempted to build up a high balance. But a balance that is at or over the limit can be a challenge to repay. If you don't delete the balance by the time the card's (likely much higher) ongoing rate kicks in, the debt could easily wind up being much more expensive than you expected. END