Going over your credit limit and how to avoid it

by Phil Lowe
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When you get a credit card, you’re given a credit limit that goes with it. The limit on your card can depend on various factors such as how much credit do you currently have available and how long have you had it. It’s well recommended that you don’t go over your credit limit, but many people are unsure what happens if you go over your credit limit at all. To understand what would happen to your card, you’ve got to look into a couple of key factors first.

Over-limit protection

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Sometimes people use their credit card for necessities like food and gas. For this reason, many people don’t want to check out before finding that they are declined for going over their limit. Fortunately, over-limit protection can be enabled for many credit cards.

With over-limit protection, users don’t have to worry about running out of credit when purchasing necessities. Users should be warned though that if they use over-limit protection that they are liable for fees that can rack up very quickly if you aren’t careful. You can also run into the issue where your interest rate gets increased quickly due to a clause that comes with over-limit protection. In all, over-limit protection is useful but you should find ways that you can avoid it.

Opt out

The simplest way that you can avoid using over-limit protection is just to completely disable it. TO disable it, you typically have to go onto your banking website or application and find the section where over-limit protection is listed. From there, you should be able to instantly turn it off without worrying about it triggering.

However, make sure that you keep a better eye on your money if you turn off over-limit protection so you aren’t without the money you need at the time. For those who believe that they still need to have over-limit protection, you do have a few ways you can avoid triggering it.

Credit card alerts

Depending on your bank, you might be able to set up credit card alerts on your phone. These make it so that you get details about your credit card when you hid certain limits during certain periods of the month.

For example, a bank company could let you set up a credit card alert so you know when you only have $200 left in your credit card balance. This could let you adjust your spending around so you are only spending money on essential products and services for the time being instead of wasting your money. You can also set up credit card alerts so you understand when your bill is due as you can end up spending interest monthly that you didn’t need to.

Credit score

As you use your credit cards more carefully, you should be able to notice your credit score going up over time. You can always take a look at your credit score by using various services like Credit Karma.

Once you’ve noticed that your credit score has gone up, you can use it to your advantage by going to your current credit lenders and asking them if they can up the credit limit on your credit card. You can also start going to other lenders that you currently aren’t using so that you can add credit cards so you have more credit that you can use when one credit card is running low. Make sure that you are always paying attention to your credit score not only so you can get a loan in the future, but so that you’re avoiding going over the limit on your credit cards.

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