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Infographic: The demise of over-limit fees

Credit card customers unanimously opt out of once-common fee

By Sabrina Karl | Published: February 5, 2016

Consumers have spoken, unanimously: They have decided not to be charged over-limit fees.

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.

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