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Spending over your credit limit

What happens when you spend over your credit limit?

Depending on the credit card provider, some banks give you the option to exceed your credit limit to avoid embarrassment and inconvenience at the cash register, but you’ll be charged an over-limit fee if you do.

Find out the different instances that might cause you to spend beyond your credit limit, which lenders will let you do so, and what they’ll charge.

Which lenders let you spend over your credit limit?

ProviderNotes
American Express
  • There is no over-limit fee charged and most AMEX credit cards can go over their limit.
  • The amount that you can go over your limit is judged on a case by case basis factoring in things like the size of the credit limit, previous spending habits and repayment history.
BMO
  • You will be charged a $29 over-limit fee if your purchase is approved.
  • Your purchase may be declined.
CIBC
  • You will be charged a $29 over-limit fee if your purchase is approved.
  • Your purchase may be declined.
MBNA
  • May vary between credit cards.
  • Over-limit fee will be stated on your Product Disclosure Statement.
RBC
  • You will be charged a $29 over-limit fee if your purchase is approved.
  • Your purchase may be declined.
Scotiabank
  • You will be charged a $29 over-limit fee if your purchase is approved.
  • Your purchase may be declined.
Tangerine
  • You will be charged a $25 over-limit fee (maximum limit of this fee is once per statement period).
  • Your purchase may be declined.
TD
  • You will be charged a $20 over-limit fee if your purchase is approved.
  • Your purchase may be declined.

How you might spend over your credit limit

There are plenty of ways you might spend beyond your credit limit including:

  • You haven’t repaid your balance, then you used your card for a purchase and spent beyond the credit limit.
  • You outright purchased something that puts you over your credit limit.
  • You incurred credit card fees. Say you used your card for an ATM withdrawal, the cash advance fee as well as the amount you’ve withdrawn could be enough to exceed your credit limit.

The smartest strategy is to keep an eye on your balance, pay attention to any notifications from your bank and either pay down your balance or leave your plastic at home if you’re getting close to exceeding the credit limit.

How to avoid going over your credit limit

  • Set up online, mobile or telephone banking

The simple way to avoid over limit fees is to keep an eye on your credit card balance. There are a couple of ways you can easily do this, such as setting up Internet or telephone banking. If you have a smartphone, you can download the bank app and monitor your balance at any time.

  • Impose a hard limit on your credit card account

If you have a provider that allows you to spend over your credit limit, the simplest solution is to give your lender a call and let them know that you want to impose a ‘hard limit’ on your credit card account. This means that once you reach your credit limit, any transaction that would have taken you over the limit will be declined.

Frequently asked questions

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