March 18, 2018
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Credit Card Tricks of the Trade

Over the limit fees
The terms and conditions offered by credit card companies are often outlined in a language that is difficult for average American consumers to understand. Who really reads the fine print anyway? Who has the time? That’s exactly what the card issuers are hoping for—and a way they can make more money. Unfortunately, when the dotted line is signed, it is assumed that everything is understood and agreed upon. One category disclosed in the terms and conditions is information on the different fees that they will charge. It is well worth your while to know what fees can and, most likely, will be charged, saving you from some serious aggravation and money down the line. Over the limit charges are one such fee to look out for.

Over the . . . what? Limit? Didn’t know there was a limit
Over the limit fees are added to your bill when you have exceeded the credit limit as established by the lender. The credit limit is the maximum total amount—for purchases, cash advances, balance transfers, fees, and finance charges—you may charge on your credit card. It may sound odd that fees assessed by the credit card company are included when they calculate your maximum total amount charged, considering you didn’t actually charge the fees. This is all the more reason to be aware of how much you’re charging. Nowadays, over the limit fees can be as high as $39, which can really add up and hurt you financially.

Some credit card companies have resorted to little tricks that can push you over the limit, “accidentally." For example, let’s say you apply for a new card with a low introductory APR and an adequate credit limit. Your intention is to transfer your existing balance so you can have time to pay off your balance and avoid interest charges for a little while. So you get the new card and transfer the balance, but when you receive your first statement, WHAM!—you’re hit with a $39 over the limit fee. After calling to find out what happened, you find out that you actually qualified for a card with a lower limit than what you originally applied for, so they sent you a different card. Therefore, the balance transfer completely put you over the limit. This is just one example of the sneaky ways credit card companies boost their profits at your expense.

What you can do
Monitor your balances so you don’t go over the credit limit! Better yet, don’t go anywhere over the limit because it’s like playing with fire. The card issuers don’t mind when you go over the limit because they can make more money by charging more fees. Beware of the domino effect as well. You can be charged higher interest rates for going over the limit because you’re viewed as a risky customer, or if you paid late, the late fee could tip you over the limit, causing another fee.




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