CREDIT CARD, credit limit, Over limit and the fees involved

Can I buy things with my credit card if I go over the limit?

Up to a certain limit, a credit card enables you to make purchases on credit. Many of us think that if the credit limit is reached, our card would be refused. But did you know that you can use your card for purchases exceeding the permitted credit limit?

Yes, the 'over limit' service offered by credit card issuers enables you to use your card for a sum that is greater than your credit limit. There are a few considerations you should make before using this service. Remember that reckless use of your credit card might lock you in a cycle of debt that will be challenging to escape.

What is the credit limit ?

Your credit limit is the most you can ever spend on a single purchase with your credit card. Credit card restrictions are put in place to ensure that you can pay back the money you borrow within a specific timeframe without experiencing financial issues.

The credit limit is established based on a number of variables, such as income, credit history, and credit worthiness. The credit card limit is typically established by the issuer when the card is issued, but it may be changed from time to time based on the cardholder's payment history, credit score, income, and other factors. Some issuers permit the cardholder to choose their own limit within the overall limit established by the issuer.

Who qualifies for the "over limit"?

All credit card users are often permitted to make purchases that exceed their card's limit. In essence, credit card issuers provide you the choice to transact over your credit limit as well as to decline the transaction when you do so. As a result, you can choose to accept or reject "over limit" transactions when making a payment or transaction. Terms and limitations apply when using a credit card with the "over limit" option.

What fees are involved?

Charges for "over limit" are imposed by various institutions and include:

2.5 percent on the "over limit" amount, with a minimum of Rs 500, according to HDFC Bank

Bank of India State There will be a charge of 2.5 percent of the overage amount or Rs 500, whichever is larger.

Citibank: 2.5 percent of the amount over the credit limit (excluding of fees, levies, and taxes), subject to a minimum of Rs 500.

ICICI Bank: 2.5 percent of the "over limit" or amount that exceeds the limit, subject to a minimum of Rs 300

[Data from respective bank websites- Please verify with the bank before progressing with the overlimit charges]