Home > Credit 101 > Credit Card Q&A: Does the CARD Act protect me from fees if I go over my credit card limit?

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CreditCard_Wonderlane_Wonderlane_CCFlickrCredit card question: Does the CARD Act protect me from fees if I go over my credit card limit? Kimberly

Answer: Hi Kimberly,

The CARD Act does place restrictions on over-the-limit transactions. This part of the CARD Act was phased in on February 22, 2010. The new rules give you an opportunity to decide if you want to go over your limit.

You can “opt-in” and tell your issuer that you want to be allowed to go over your credit limit. But if you do, you may be hit with an over-the-limit fee, which averages around $39. You can only be charged this fee once during each billing cycle. The amount of the fee varies, so read your credit card agreement to determine what it is.

Now, you can also tell your issuer that you do not want to “opt-in.” If you don’t opt-in and you go over your credit limit, your card might be rejected at the cash register. Personally, I’d rather have my card turned down than pay a $39 fee.

Another reason not to spend up to your limit and beyond is that it can have a negative impact on your credit score. You should try to keep a revolving credit utilization under 10 percent. That’s hard to do if you’re maxed out on one or more cards.

You also have the option to change your mind if you don’t like the sight of a $39 fee on your statement. You can revoke your opt-in status whenever you want.

[Related Consumer Guide: How the Credit CARD Act of 2009 Affects You]

Image: Wonderlane Wonderlane, via Flickr.com

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  • creditcardassist

    Does anyone know the details about how the CARD Act is going to affect small to medium sized business and how do I know if I need to get a different business credit card?

    • Beverly Blair Harzog

      Unfortunately, business credit cards aren’t covered by the Credit CARD Act at all. Small business owners don’t have the same protections as consumers, so be careful to read all the disclosure statements as well as every piece of mail you receive.

      If you’re unhappy with your current card, then decide what type of feature you need the most. Do you need miles or do you need cash back, for instance? Once you determine your objective for having the card, you’ll be on your way to picking a card that’s more suited to you and your business. Then find out what your credit score is so you can narrow down your choices based on what you might qualify for. Visit our credit card home page and you’ll find more great tips for picking the right card.

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