What happens if you go over your credit card limit?

A credit limit is the maximum amount you’re allowed to spend on a credit card or line of credit at a given time. If you reach or go over this limit, it’s sometimes called maxing out your credit card, and it can have a variety of consequences. 

Be sure to check your card’s terms and conditions so you're aware of what will happen. Here, we'll go over some possible outcomes and discuss strategies for avoiding going over your credit limit. 

Transactions may be declined

If you hit your credit limit, your issuer may decline transactions. This will stop you from going over your limit, and you will not be able to make new purchases until you have paid down your balance.

Your minimum payment may increase

If you exceed your limit, your minimum payment may increase by the amount you've gone over the limit.

How going over your limit can impact your credit

Your credit utilization ratio is the percentage of your total available revolving credit currently in use. Your credit utilization ratio impacts your creditworthiness. In general, lenders view lower credit utilization ratios more favorably.

When you go over your limit, you’re using over 100% of that credit card’s available credit. If that’s your only credit card or your other accounts have similar utilization, this can negatively impact your creditworthiness. 

Strategies to avoid going over your credit limit

One way to avoid maxing out your card is to monitor your spending relative to your credit limit. It can be easy to spend more than you realize, especially if you have automatic payments set up and don’t typically log into your online account. So, get in the habit of checking your balance throughout the month. Careful budgeting can also help you avoid going over your limit.

If you're concerned about approaching your limit, you can ask your card issuer to raise it. If your income has increased and you've demonstrated a positive payment history, the issuer may be inclined to increase your limit. A higher limit can help lower your credit utilization ratio if you don’t increase your spending, which can then improve your creditworthiness and make you a better candidate for future lending.

Some issuers will also allow you to set alerts for when your card usage is high. These alerts can be a great way to avoid accidentally exceeding your limit. With some Citi cards, for instance, you can set up notifications to alert you when your balance exceeds a specified dollar amount or you exceed your credit limit. You can update your alert preferences online or via the Citi Mobile® App.