Does your credit card let you spend past your limit?

From U.S. News and World Report:

(At a Congressional hearing in April, Susan) Wones expressed frustration that her card company, Chase, had approved her purchases even after she went over her credit limit, triggering a fee and an interest rate hike. She had assumed charges would be denied as soon as she reached her $2,000 limit. Chase says that most customers appreciate the ability to go over their credit limit but that consumers can request to have such charges denied.

Thaler and Sunstein have proposed that credit card companies ask consumers whether they want to be able to exceed their credit limit (for a penalty) or if they would prefer the charges be denied.

If you are a shopaholic with self-control problems, you might also pay a credit card company a small amount to cancel all charges on specific categories of goods once a pre-set budget limit is reached each month. For instance, Thaler has a weakness for good wine, so he might ask his credit card company to reject all charges from liquor stores and online wine shoppes after X dollars are spent. Sunstein has a weakness for books, so he might ask that all charges to Amazon or Barnes & Noble be rejected after he spent Y dollars on them for the month. Is there a store or product for you wish your credit card company could help you control your spending?

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5 Responses to “Does your credit card let you spend past your limit?”

  1. Nick Says:

    I am sure they would charge some large “convenience” fee to do anything like blocking purchases by category.

  2. Paul Sweeney Says:

    Great, great point. Our company provides Credit Card companies with an interactive notification/ messaging system, so when you reach that limit, we call you and ask you to validate that you do want to go over that limit. How cool would it be to just put a nudge in there to see if you really, really want to go over for “a bottle of wine”? Seriously, we’ll look into it!

  3. Ed Crump Says:

    My Best Friend, a mature woman of very modest means, but the possessor of at least ten bank and store credit cards. In a 5 year period, this person ran up an indebtedness of over $50,000, and necessitated her
    filing a Chapter 7 bankruptcy petition. This entire action was never detected by her husband, son, and friends. She certainly is guilty of addictive behavior, and there is no excuse for that. But she was enabled every step of the way by the card issuers.

  4. tesco credit cards Says:

    tesco credit cards…

    Just read a good story on The 10 Worst Credit Card Mistakes College Students Make. I would add having too many credit cards to their list. Why would you ever need more than two credit cards? Even one card is probably enough to build your credit history…

  5. Scott Says:

    wow this was a very helpful article, as the last thing people need right now is to get into credit card debt..

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