Why do CC let you go over the limit!

[mattayy]

Hello,

I just signed in to my Barclay Arrival card and saw that I am $121 over the limit?! The charge was more than the available credit so I don't understand why they would let it go through? it was an automated one that I had forgot about but still. I was planning to make a payment of $500 or so but not for two weeks...do you think they will close my card if I leave the balance over the limit for that long?

[Anonymous]

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@mattayy wrote:

Hello,

I just signed in to my Barclay Arrival card and saw that I am $121 over the limit?! The charge was more than the available credit so I don't understand why they would let it go through? it was an automated one that I had forgot about but still. I was planning to make a payment of $500 or so but not for two weeks...do you think they will close my card if I leave the balance over the limit for that long?

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If it's a World MasterCard, It has this ability built in.

[mattayy]

It lets you just go over your limit on purpose?!

[Anonymous]

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@mattayy wrote:

It lets you just go over your limit on purpose?!

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Yes, You likely won't be penalized for it, but definitely make a payment.

[Anonymous]

It isn't a World Mastercard if it only has a 1.5K limit, is it Nixon?

[Anonymous]

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@Anonymous wrote:

It isn't a World Mastercard if it only has a 1.5K limit, is it Nixon?

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It can be. My SallieMae was initially approved with a 1.5K limit and was WMC.

It was CLI'd by a rep to $2K on day of activation.

[Anonymous]

That is wild. I know they print lower CL cards on the same WMC stock, but I didn't think it would come with the perks. When I got my Double Cash (2.5K starting CL)  it was on the WMC stock but I didn't get the WMC pamphlet. When they CLI'd me to 12.5K I received the WMC literature so I just assumed it was a fixed CL before and now it is flexible over limit. 

[Anonymous]

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@Anonymous wrote:

That is wild. I know they print lower CL cards on the same WMC stock, but I didn't think it would come with the perks. When I got my Double Cash (2.5K starting CL)  it was on the WMC stock but I didn't get the WMC pamphlet. When they CLI'd me to 12.5K I received the WMC literature so I just assumed it was a fixed CL before and now it is flexible over limit. 

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Higher swipe fee.

[Anonymous]

Ahh, roger that. Makes sense.

[Anonymous]

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@Anonymous wrote:

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@mattayy wrote:

It lets you just go over your limit on purpose?!

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Yes, You likely won't be penalized for it, but definitely make a payment.

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Yes, if you exceed the CL the rule is that the next minimum payment is whatever it would normally be (% of balance) plus the amount you are over, so you are not allowed to carry over more than your CL

Pre CARD Act, over the limit fees were a huge profit maker for the issuers.   Since then, they can only charge such a fee if the user opts in (on cards without OTL feature) otherwise they must decline the charge.   I don't think I've ever been asked to opt in for this  (bank accounts yes, credit cards no)