What Happens If You Go Over Your Credit Card Limit?

Your credit limit is simply the amount of credit a lender extends to you for a particular credit card or line of credit. Whether you’re new to carrying a credit card or you have years of credit history under your belt, there may be a point where you wonder what happens if you go over your credit card limit.

This isn’t a surprising question given how credit card balances continue their rise in the U.S. The average credit card balance in 2024 was $6,730, according to credit reporting agency Experian, which may put more consumers at risk of going over their credit limit at some point. We explore what you can expect if you go over your credit card limit — and what to do about it if it does happen.

What it means to max out your credit cards

Maxing out your credit cards means you’ve made so many purchases that you no longer have any room left on your credit line. It also means you won’t have the option of making new purchases until you pay down your balance and add more room to the credit line. While it’s not unheard of to go over your credit limit, doing so has the potential to negatively affect your credit score.

What to expect when you max out a credit card

If you end up making a purchase that tips you over your credit limit, then you can expect one or more scenarios to take place.

Your credit card purchase is declined

It’s possible while using your credit card as you’re shopping online or standing at the retail counter that your purchase simply won’t go through if you’re over the credit limit. When you’ve maxed out your card, you won’t have the option of making further purchases and you’ll have to present another method of payment.

You can avoid this scenario in two ways:

• Opt into your issuer’s overlimit feature. Some issuers allow you to go over your limit by agreeing to associated fees should your purchases exceed your limit.
• Use a card with a flexible credit limit. Sometimes called a charge card, flexible spending cards allow you to go over your limit with no fees on a case-by-case basis.

Your credit score drops

Even if your purchase goes through, your credit score can drop once your balance is reported to the three credit bureaus and you’re near or over your credit limit.

Credit utilization — or the percentage of credit you’re using in relation to the amount extended to you by your creditors — makes up as much as 30 percent of your credit score, according to the Consumer Financial Protection Bureau. It means that if your credit limit is $5,000, the recommended balance is around $1,500 to stay within the 30 percent threshold and not negatively affect your credit score.

Your interest rate goes up

Depending on your card issuer’s terms and conditions, you could face a penalty APR by going over your credit limit. When this happens, the issuer applies an interest rate to your balance that is significantly higher than your regular interest rate. It can last six months or longer, which can mean a substantial amount of additional interest tacked on to what you owe.

Your minimum payment increases

Each credit card issuer has its own method for calculating minimum payments due, but when you go over your limit, then you’re likely going to see an increase in the minimum payment too. Since minimum payments are in part based on your credit card balance, it makes sense that your minimum payment will go up along with your balance.

Your account is frozen or closed

If you regularly go over your credit limit, it’s possible your credit card company could decide to freeze or close your account permanently.

What should you do if you go over your credit limit?

Three key steps can help if you’re approaching your credit limit or have already gone over it.

Set up an overlimit alert

If you’re concerned you may get too close to your credit limit for comfort or have already gone over your limit, most issuers allow you to set up alerts through an email or text message. You can often set a balance threshold that triggers your alert, helping you to avoid going over your credit limit unknowingly.

Stop using the credit card

The best course of action is to discontinue using the credit card altogether. Stopping your use completely keeps you not only from falling further into debt with the card, but also from increasing your balance too. Discontinuing use is especially important if you face a penalty APR since any new balance you carry will be subject to that higher APR.

Modify your budget

If it’s possible, consider putting more of your budget toward your credit card debt. Allocating more money to your card debt not only puts more of a gap between your balance and your credit limit, but it can also lower your credit utilization rate — which can have a positive impact on your credit score.

What to do if you max out your credit cards

If you’ve maxed out your credit line or you have very little credit left to use, look into applying for a balance transfer credit card — especially if you have a high-interest credit card you’re struggling to make monthly payments with. The best balance transfer cards provide a temporary break from high interest charges, allowing you to move high-interest debt to another card offering low or no interest for 15 months or longer to more quickly put a dent in the balance.

If you have a history of on-time payments, you can ask your credit card company if it’s willing to increase your credit limit. If they do offer a credit limit increase, that increase can also help to lower your credit utilization.

How to avoid maxing out your credit cards

Maxing out your credit cards can have negative consequences on your credit score and financial well-being. Here are some tips to help you avoid reaching your credit card limits:

• Set a budget: Establish a monthly budget that includes all your expenses, including credit card payments. Stick to this budget to avoid overspending.
• Monitor your spending: Keep track of your purchases and regularly review your credit card statements to ensure you are staying within your budget.
• Utilize alerts: Set up account alerts or notifications to be informed when your balance is approaching your credit limit. This can help you stay mindful of your spending.
• Use credit wisely: Only use your credit cards for necessary purchases and avoid using them for large, impulse buys. Consider using cash or debit cards for everyday expenses.
• Pay your balance in full: Aim to pay off your credit card balance in full each month to avoid accruing high-interest charges and falling into debt.
• Keep credit utilization low: Try to keep your credit card utilization ratio (the amount of credit you’re using compared to the total credit available) below 30 percent. High utilization can negatively impact your credit score.
• Consider increasing your credit limit: If you find yourself consistently nearing your credit card limit, you may want to consider requesting a credit limit increase. Just be careful not to use the increase as an excuse to spend more.

The bottom line

Going over your credit limit can result in declined transactions, over-the-limit fees and a possible decrease in your credit score. Among the ways to avoid credit card fees is by setting up alerts that notify you if you’re approaching your credit limit, as well as making on-time payments and paying down your card balance as soon as possible.

If you do go over your credit limit, pay as much as you can toward your balance quickly so that you can add more cushion to your credit line. Or consider choosing a balance transfer card offering low or no interest to provide breathing room while you pay down your debt.