Credit card customers unanimously opt out of once-common fee
The editorial content below is based solely on the objective assessment of our writers and is not driven by advertising dollars. However, we may receive compensation when you click on links to products from our partners. Learn more about our advertising policy.
The content on this page is accurate as of the posting date; however, some of the offers mentioned may have expired. Please see the bank’s website for the most current version of card offers; and please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.
Roughly 1 in 10 credit card accounts experience a purchase that would push cardholders’ balances above their credit limits, according to a December 2015 report by the Consumer Financial Protection Bureau. But consumers are no longer being hit with hefty penalties for the transgressions.
It’s one of several consumer-friendly outcomes of the Credit Card Accountability, Responsibility, and Disclosure (CARD) Act of 2009.
Before the act imposed restrictions on over-limit fees, issuers would willingly authorize limit-exceeding transactions, but then charge the cardholder a fee for doing so. The fees averaged close to $35 in 2008.
Although the act did not prohibit over-limit fees, it required issuers to let consumers decide whether they wanted to opt-in to the fees. For those opting out, their card would be declined whenever attempting an over-limit transaction.
In the wake of the act’s passage in 2009, the number of over-limit fees began plunging, from an assessment rate of about half of the over-limit transactions (44 to 51 percent during 2008 and 2009) to a zero incident rate from the first quarter of 2014 through 2015’s second quarter (the most recent data available).
Released December 2015, the CFPB report estimates that the extinction of over-limit fees has saved consumers $9 billion or more during the four-year period of 2011 to 2014.
To use the graphic on your site, use the following code: