How to Avoid Credit Card Over Limit Fee?

Every credit card has its own pre-set spending limit. If you spend more than the set limit, the credit card company charges you a credit card over limit fee. With some set strategies, you can avoid the additional charges. Read on to know about how credit card over limit fee works and how to avoid it.

How Does Credit Card Over Limit Fee Work?

According to the RBI guidelines, credit card companies cannot charge an over limit fee unless you spend more than the set limit. Also, they must ask for your permission before adding the fee. If you deny it, your transaction will not go through. However, if you agree to it, your transaction will be processed with an overlimit fee.

The over limit fee is charged once per month. However, if you continue to spend over your limit, you may also have to pay the fee for two months. If your credit card transactions exceed the limit even after paying the penalty, you may be charged an extra fee.

Also Read - How to Increase Your Chances of Credit Card Approval

How to Avoid Credit Card Over Limit Fee?

Here’s how you can avoid credit card over limit fee:

1. By Increasing Your Card Limit: If you think your credit card limit is lower than your requirement, you can request the credit card company to increase your limit. If you have a good credit history and a stable income, they may agree to increase the limit.

2. By Monitoring Your Card Usage: Regularly monitoring your card usage can help you analyse your expenses and determine where you are overspending. Once you identify the areas where you are overspending, make changes to your spending habits to keep your expenses within your credit limit.

3. By Setting Up Account Notifications: Set up account alerts on your credit card to be notified when you are close to your card’s maximum limit. This will help you know when to stop using your credit cards and avoid going over that limit.

4. Pay Bills Regularly: Pay your credit card bills regularly every month. It will help you prevent any incurring high-interest charges and maintain your credit card balance below the limit.

Important Things to Know About Credit Card Over Limit

Here are some key points that you must understand about credit card over limit:

• Credit Card’s Overlimit Facility: Few credit cards let you spend more money than your credit limit. However, you will still be charged an overlimit fee.
• Reversal of Credit Card Over Limit: If you have unintentionally spent over the limit, you may request to cancel the over-limit fee. However, they may deny cancelling the fee. So, it is advisable to avoid going over your credit card limit.

Also Read - How to Withdraw Cash Using a Credit Card?

To Conclude

Understanding the credit card over limit fee is crucial while using a credit card. This fee usually varies from lender to lender. However, by increasing your card limit, monitoring your use, and setting up account notifications, you can avoid the over limit fee. Always go through the terms and conditions of the credit card provider to get updated information related to these penalty charges.

Frequently Asked Questions

1. What is over-limit usage?

Over-limit usage is a credit card feature offered by various financial institutions that allows you to exceed your credit limit. If you utilise this option and spend beyond your credit limit, the lender will levy an additional fee for surpassing your credit limit.

2. How can I check the overuse of my RuPay credit card?

You can monitor the potential overuse of your RuPay credit card by regularly reviewing your credit card statement. Additionally, many financial institutions notify you of your purchase amount and remaining credit limit when you make transactions.

3. What are the alternatives to an over limit usage of credit cards?

You can consider alternatives such as applying for a balance transfer card to reduce high-interest rates. Additionally, you can opt for a Personal Loan from a trusted lending partner, like Poonawalla Fincorp.

4. What is the fee applicable for over-limit usage of credit cards?

Credit card issuers usually charge a minimum fee of 2.5% on the exceeding amount, which is around Rs. 500. This amount may differ from one lender to another lender.

5. What are the features and benefits of Poonawalla Fincorp IndusInd Bank eLITE RuPay Credit Card?

With Poonawalla Fincorp IndusInd Bank eLITE RuPay Credit Card, you can enjoy several features and benefits such as zero joining fee, effortless credit card UPI payments, exciting waiver, movie offers, milestone benefits, etc.

Disclaimer

We take utmost care to provide information based on internal data and reliable sources. However, this article and associated web pages provide generic information for reference purposes only. Readers must make an informed decision by reviewing the products offered and the terms and conditions. Loan disbursal is at the sole discretion of Poonawalla Fincorp.
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