Your credit card issuer may charge you an over-the-limit fee. If they do, the price could be as high as $35. If you continue to carry an amount on your credit card higher than the limit for each billing cycle, you may be subject to an over-the-limit fee of up to one dollar per month for up to three billing cycles.

If you pay down your amount, then exceed your credit limit again, or if you obtain an increase in your credit limit and then exceed the new credit limit, your card issuer may charge you extra over-the-limit penalties. This may happen in any scenario.

Second, if go over credit limit, your interest rate may climb to card's default which in certain instances may be as high as 30%. This can be a significant financial burden. Because of the rise in the interest rate, continuing to carry debt over the grace period on a credit card would result in greater finance charges being applied to that amount, making it more expensive.

Last but not least, your credit score will suffer as a result. Because your credit usage makes up 30% of your credit score and compares your debt level to your credit limitations, having a balance that is more than your credit limit will decrease your credit score.

How You Can Stay Clear of Fees Related to Your Credit Limit

Do not agree to pay the credit limit fees by opting-in

Before your credit card company may charge you a fee for exceeding your credit limit, they need to get your approval first. You can "opt out" of transactions that exceed the limit. After you have done so, any transaction that would put you above the limit will be denied, and you will not be charged an over-the-limit fee.

Find out how much your credit limit is

If you are unsure of your limit, it will be much simpler to go over it. Check billing statement, log in to online account, or contact customer care number shown on back of credit card to learn your credit limit. You may do any of these things to get your credit limit information. Before making any new purchases with your credit card, you should check to see whether the credit card issuer has a mobile app that can be downloaded to your smartphone and used to access your account. It is in your best interest to keep a close eye on your credit limit since lenders may change it at any moment.

Sign up for balance notifications

If your current balance is approaching a specific percentage or dollar amount of your credit limit, some credit cards will send you an email or text message to alert you. Check your online account or get in touch with customer care to find out whether or not the company that issues your credit card provides notifications of this kind.

Maintain a low balance at all times

If your current debt is less than 30 percent of your available credit, you have leeway in your budget to make more purchases without risking going over your credit limit. In addition to this benefit, it will also improve your credit score. Maintain an available balance of $300 or less on a credit card with a credit limit of $1,000.

If you're not sure, check

Check the amount of available credit you have before making a transaction if you are unsure about your current balance or credit limit. A great number of credit cards provide customers with an automated line that may be accessed around the clock to verify this information. Use the phone number listed for customer support on the back of the credit card. You may even make a call from inside the shop if you have a cellular phone, even before you make your purchase.

What You Should Do If You Are Charged a Fee for Exceeding Your Credit Limit

If it's your first time going over your credit limit, the company that issued your credit card could be prepared to let you off the hook for the over-the-limit cost. Give the issuer of your credit card a call and inquire about the possibility of having the charge removed from your bill. If you have satisfactorily maintained the other aspects of your account, they could be prepared to erase the cost from your balance.

If you cannot have the fee eliminated, your other option is to reduce your amount to a level much below the credit limit. This will prevent you from being charged a fee the following month. You will need to pay down a sufficient amount on your credit card debt to avoid going over your credit limit again due to interest and penalties the following month.