An over the limit fee is a fee that you will be charged if you exceed your limit on your credit card or bank account1. You should be aware of this particular fee, because it is known to get many consumers into trouble. The reason why, is that these fees can creep up on you without your knowledge. Your bank or credit card issuer may let you overspend without telling you that you have exceeded your limit1. They accomplish this, often times credit card companies approve your purchases for the sake of “convenience”1. Once the purchase is approved you are slammed with a huge fee, sometimes reaching “$39 at several major banks”, for every purchase made over your limit1. If you do the math, it is clear, that these fees can do some damage to your budget. Luckily, there are some strategies you can use as a consumer to avoid these debilitating fees.
One thing you can do to prevent these fees is to request your bank to only approve purchases that you have enough money to cover1. A few banks that allow you to so this are: Wachovia, HSBC, and Washington Mutual1. If your bank isn’t included in this bunch, it is still advisable that you make a request, as it never hurts to ask.
Another strategy to avoid these fees for a checking account in particular, is to link your account to another line of credit and or savings account as a safety net1. This way if you spend beyond your limit within your checking account, you won’t face over the limit fees quite as often because your savings account covers these expenses as a backup. Some banks allow you to do this but ultimately still charge you another, lesser fee for this back up method. However, this tool is a still a better alternative than facing a hefty fee with every purchase. Keep in mind that regardless of which method you choose, it is a good idea to be aware of your balance on a consistent basis because this safety net is only temporary. One way to keep track of your account is through text or email alerts. If you utilize technology to your advantage, there is a good chance that you can avoid these fees altogether.
One last way you can avoid over the limit fees, is to request a credit increase, when you are about to make a string of purchases1. It may sound bad to increase your credit, but if you know you tend to spend over the limit quite often, it is much better to prevent lots of costly fees by requesting credit increase in advance.
Source:
1 http://money.cnn.com/galleries/2006/moneymag/0612/gallery.outrageous.fees/18.html
Note: Accounts can continue to be assessed over the limit fees so long as they remain maxed out. Some creditors agree to waive over limit fees and/or late fees for customers that enroll in debt management programs.
Apart from contributing public service and active involvement on campus, Sybria is very passionate about creative writing and writing in general and hopes to bring a sociological point of view to her articles. Her interests outside of writing and public service include reading books concerning fashion and spending time with her family.
A well rounded curriculum involving Business and English academics in addition to sociology, have helped shaped this young writers’ unique voice. She is eager to share her newly acquired skills and looks forward to helping others approach every day problems from a new, and perhaps, sociological outlook.
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