I was looking over a good friend’s finances for them and noticed a “$20 overlimit fee” on their Visa bill. I then confirmed from their bill that they had total charges that actually exceeded their credit ‘limit’ from purchases made over the one month billing period (my friend pays the full balance every month).
I asked my friend if this ‘fee’ had ever been discussed with them, and confirmed that this was not the case.
This bugs me for a lot of reasons, not the least of which are:
- People usually assume that they can’t exceed their limit, so if they use their limit to help them keep their credit card spending in check, this will no longer work.
- $20 is a way for the credit card company to make money without charging you interest. You ever wonder why credit card companies interest rates are just under 20%? Its because they can’t get away with charging more legally.
- They didn’t ask the user if they wanted this feature.
- If someone loses their card, the potential damage is MORE than their credit limit.
- This is just another example of the card companies taking advantage of people that are bad with money.
When I called Visa to tell them what I thought of their policy (and get the charge reversed) they blamed the need for this policy on the fact that their systems don’t post items right away, so people can go over their limits.
I explained to them that this was a new policy, so this didn’t make sense for one, and two, customers should not have to suffer because of their bad systems. They then informed me (confirming their lie) that they could set the card to work in the manner that people expected where you would just get the card declined when you tried to go over your limit.
So you might want to call up your card company and find out what your card ‘settings’ are…