Consequences of exceeding credit limit on a card?

bittennails

I'd welcome your advice...

In the past few days I've inadvertently exceeded my credit card balance limit by £17. I called them today and paid £50 in to sort this out.

However, they reckon I may get stung with a £15-20 fee for this, but can't tell me until tomorrow, when this months statement is generated.

The operator has suggested I call back when the statement arrives and ask that this charge is removed. He's also put a note on my account to this end, saying that in good faith I've attempted to put things right by paying £50 in.

Could anyone give me some pointers on how to handle this, should I find they've charged me a fee? Or should I just swallow it and learn my lesson?

Also, will this have any detrimental affect on anything (credit score, relationship with the card company) in the future?

Thanks in advance :-)

Margaret_Millne

If this was a first genuine mistake - and I'm not suggesting in any way that it wasn't - a call to them if a charge does appear should get them to remove it.  I have found in the past if I regularly got very close to my card limit the card provider raised the limit for me anyway.

You could always threaten to leave if need be, assuming you are not in the middle of some good promo.

Edit: You've always got the two new cards to fall back on.

bittennails

Thanks MM.

Yes, its my first "offence" at going over the limit. The guy today seemed quite helpful and seemed to think I could get it removed...

I was more concerned at whether this would have any long term effects, like for instance if you miss a montly payment.

Re: the bit about having 2 other cards to fall back on - LOL! Thanks for taking an interest It's a good point actually. If they give me any grief I might have a use for that HSBC card after all!

dag_2

I was more concerned at whether this would have any long term effects, like for instance if you miss a montly payment.

As a rule, lenders get much more uppity about missed payments than exceeding the limit. When you start missing payments, they start to worry that they might never get their money - but this doesn't happen if you merely exceed the limit but keep up with the payments.

Your credit card has probably got two credit limits. They tell you about the lower, official limit, and charge you fines if you exceed it. But there's also a secret higher limit, used to decide whether to authorise transactions or not. You will still be able to make purchases and cash advances on your credit card as long as the balance is lower than the secret limit, even if you've gone over the official limit.

Very occasionally, the limit used for transaction decisions is the same as the limit they actually tell you about - but this is unusual. A higher secret limit gives the credit card company a chance to make big money out of excess limit fines, yet still keep risks under control at the same time.

The point I'm making is - try to avoid exceeding the limit, so you don't have to pay fines. However, exceeding the limit is very unlikely to have serious long term effects. Your chances of getting credit in the future is affected much more by other things, such as whether or not you keep up with payments, whether or not you're on the electoral register, and how much you move about.

Walletwatch

This also seems to be highly provider-specific. I have exceeded my limit on my Citibank card by £10 or so on a couple of occasions, and they haven't charged me anything. Don't know if it is because I've been banking with them long enough, or they ignore such deviations as a practice. On the other hand, Barclaycard charged me £20, and even when I requested them to reverse it, they refused.

Actually, Citibank seems to be quite lackadaisical in their approach to retail banking in general, it is almost as if they couldn't care less, since their focus area anyway seems to be Corporate and Investment Banking. Which is good in one way, as you get away with no fees on late payments (have had this once as well, and got it waived, saying the bill didn't come thro') and exceeding your limit. But on the other hand, they probably don't focus too much on the service aspect and quite often, you are at the mercy of the call-center guys in India.