Question about credit cards

[amerie_milian]

Okay, I signed up for a credit card, and it's coming in the mail shortly. It's got a $50 credit limit on it. Well, originally it was $350 but they charge you $250 in fees (for those with not-so-good or limited credit) so you're then left with $50 in credit.

 

What does this mean, exactly? If I go $30 over the $50 limit, will it stop me? Will the cashier tell me my card has been declined or it says "over limit"? ???

 

Or will it keep letting me purchase things, and later on the bill will reflect that I went over the limit and charge me extra fees? I know there are Over Limit fees for going over the credit limit on credit cards generally, but if a card has a limit, does that mean you can't go over it?

 

I was kinda thinking, how is it possible to go over the limit if the card has a limit? If you could wouldn't the limit be kinda pointless? Someone explain this to me, I'm confused.

[maladjusted]

i am not an expert in this matter but i do believe you only have $50 to charge on. if you go over that $50 initially i don't think they will stop you at the store from your purchase depending on how much you are charging but i will say the credit card company will hit you with an overlimit fee. if i were you i would look at the fine print on your contract or better yet call the credit card company to answer your questions. but i would not charge anything until you have talked to the credit card company because they do like to scam people out of extra fees and by the time you know it you have racked up so many fees the card is basically useless.

[luvursmile]

I dont think you can go over the limit. Meaning if try to buy something thats more than $50, it will get declined.

Its possible to go over the limit, if lets say, for example, you use up the $50 remaining. Then when you get your bill, if you dont pay the entire bill (or most of it) then it can go over. Lets say you keep paying the minimum all the time, eventually (with all the finance charges & stuff) its possible that it could be over the limit. Did that make sense? Sounded kinda weird when I reread it.

[kittysaysmeow]

I know that I'm unable to go over the limit.

 

Why did you get a card with fees? There are so many other credit cards out there without annual fees.

[shes2smart]

Anything over your credit card limit will most likely cause your card to be declined by the merchant at time of (attempted) purchase.

 

BTW, $250 in fees just to have the credit card is a REALLY BAD deal, even if you do have poor credit. If you have to have a credit card, this isn't a good choice at all. You need to do a little more homework and fine-print-reading to get a better deal. If you can't get a better deal, you might want to forego having a credit card now and focus instead on bettering your FICO (credit)score.

[shes2smart]

Oh, as to ways you can go over limit, most common would be interest charged to your account if you don't pay it off in full...and/or any other late fees, etc that may be added to your account.

 

My husband works in a bank's credit card division. This card you've described is bad news. You're probably going to be better off in the long run if you can get out of this deal now rather than accept this card.

[amerie_milian]

link removed

 

I read above that you can charge over the limit, but it comes with a high price. Another site said it's a common misbelief that your card will be denied if you go over your limit when purchasing. It said credit card companies LIKE it when you do that because they make more money off of it. My boyfriend said that he has charged $100 over his limit before.

 

Kitty, the reason why I got that card with such high fees is because it's the ONLY card that would accept my application without a bank account, and every other card I signed up for declined me. And it's Xmas, I have to have this way to purchase things regardless. It sucks but there's nothing I can do.

 

She's2smart, like I said, it's the only card that would accept me. I did do my homework as far as my knowledge extends. There were other cards that seemed decent but required a deposit with a checking account.

[agent1607307371]

amerie, I think there is a reason that card accepted your app and it's likely not good news. Try not to spend too much on it or cut it up as soon as you are able.

[coooolsome]

Credit card companies will let you go over your limit. Why? Because then they can charge you a fee for going over your limit. Also, even with bad credit you can get a credit card without any fees. 250.00 in fees is a really bad deal. I would see if you can get rid of them.

 

I think i understand what kind of credit card you got, but I still think its unreasonable. I would get one from a bank that makes you put the 250 in a savings account. At least you can get it back later on.

[denisemarie]

I dont think you can go over the limit. Meaning if try to buy something thats more than $50, it will get declined.

In my experience I'm pretty sure it depends on the credit card type (department store, bank, Mastercard, Amex, Discover, ect...) your relationship with the company (are you consistent), and the terms of your agreement. I have one card that they just increased my limit b/c of my good credit history and another that would reem you big time if you go over limit. I have heard that some stores will stop you, but that is something I have never experienced. Mind you I have only gone over my limit once and it was no problem b/c I paid the balance right away. When in doubt call customer service ask for an increase, or help in understanding the terms of your agreement. If this is your first credit experience tread lightly good credit history comes with time and diligence. Don't go over your limit, pay your minimum due on time, and watch your debt to income ratio (earnings vs debt) all of these things effect how credit companies will treat you in the future including increasing your credit card limits.

[denisemarie]

think i understand what kind of credit card you got, but I still think its unreasonable. I would get one from a bank that makes you put the 250 in a savings account. At least you can get it back later on.

 

Very good advice. Many banks offer these types of accounts to people who need to build their credit, and they do it in an honest way. I know someone who wanted to build her credit and got suckered into a card with a 24.99% intrest rate, which is totally insane.