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If you accidentally go over your limit on credit card do they raise your interest rate? What are the pros and cons I should be looking out for? Any help appreciated. I am very grateful for your help.
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It depends on the terms of the card, but typically you are just charged a fee (like $35) for going over the limit. If you pay it back down quickly you will probably not be charged additional fees or see any APR increases. -
Going over your limit is something that is revealed on your credit report. It will show your limit and your highest balance as well as current balance. Logic would have you believe it effects your FICO in some way.
As other's have said, check your agreement. Most banks will say repeatedly going over your limit is a red flag and you are an increased risk. Some will consider it on your first offence.
If you have generally good habits - say your balance varies alot because you charge alot, but also pay off alot - you may be able to make a play to increase your limit, because obviously it is too low for your lifestyle. On the other hand, it you maintain near the limit and your careless spending is pushing you over, then you are in trouble.Comment
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From another post of mine regarding FICO score and overlimit:Originally posted by wincrasher View Post
Your score is not directly punished if they show you charged $1200 on a $1000 limit. It does affect it indirectly, though, as you can show more debt than you have available credit, and that is bad for your credit. However, it can also happen if you close an account with a balance, or have a credit limit reduced. The bottom line is that you are not penalized for over limit balances as if it were late, a missed payment, or in default/collections.
Any damage to your score from being over your limit will subside within a few months after you get the card back to the previous level.Comment
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