An over-limit fee is a charge that may be applied when a cardholder exceeds their assigned credit limit on a credit card. This fee is typically levied by the issuing bank as a penalty for surpassing the card’s credit cap, and it can vary depending on the card issuer and the terms of the account. Although over-limit fees have become less common due to regulatory changes and opt-in requirements, they are still applicable in certain cases and can add up for cardholders who frequently exceed their credit limits.
In recent years, over-limit fees have decreased significantly, with only about 20% of credit cards charging this fee, largely due to the CARD Act of 2009, which requires cardholders to opt in for over-limit transactions. Example: A consumer who opted into over-limit protection on their credit card faced a $35 over-limit fee after exceeding their credit limit during an emergency purchase, highlighting the potential costs of this feature. Insight: While over-limit fees are less common, they can still affect subprime cardholders who tend to have lower credit limits. On average, over-limit fees are around $25 to $35 per occurrence, though some issuers now waive the fee to improve customer satisfaction.
At Swipesum, we understand the complexities of credit card fees and help businesses manage their fee structures to minimize costs for themselves and their customers. Our team provides insights into how over-limit fees and other charges affect consumer behavior, helping you create a transparent and compliant fee policy that enhances customer trust. By partnering with Swipesum, you’ll receive tailored support in fee management, optimizing payment processes to avoid unnecessary costs and improve customer loyalty.
