ghostjmf wrote:
OK: You agree with Barclay's that I'm over my limit (which I had had them set back to $2,500.00 after they initially set it at a much higher level).
Now: Do you agree that Barclay's should have
(a) rejected my purchases until they cashed my check they hadn't cashed yet
or
(b) let me continue to run up charges, then charged me a penalty for it
(which is what they did do, though upon discussion they removed it;
I wonder if that penalty, during the brief 2 days it was on my account, could have
triggered my other card, by an unrelated company, raising my rates)
I thought that limits were there to stop use of the card at the limit, not to be an opportunity for the card company to let whomever is using the card, presumably a crook in most cases, to keep spending, then charge the owner of the card penalty fees.
The limit, no matter who sets it, is not there to stop usage by anyone -- you or a crook. It merely indicates how much credit to which you are entitled without being charged a fee. Most of the time the limit is set by the company, based on risk modeling, but whoever sets it, it stil operates the same. You can charge all you want up that limit with no fee. If you go over, it's at the discretion of the company if they want to extend you the additional credit.
Unless the amount is wildly over the limit or the usage pattern is significantly different than usual (that's what curbs fraudlent spending, not the limit itself), they generally will do so -- for both customer convenience, as Cal noted, and so they can charge the fee. CC companies count on that sort of income.
As you said, you are not beholden for any more than $50 in fraud charges, and usually not even that. Any fees and finance charges resulting from the fraud, as well as negative credit impacts, are also reversed. So all you really did by lowering your line was to reduce the amount of credit YOU had available without a fee being imposed!
By the way, here are the two snippets of legalese from the Cardmember Agreement we issue, regarding credit limits and fees.
Credit Line: You are responsible for keeping track of your account balance, including any fees and finance charges, and making sure it remains below your credit line. If your account balance is over your credit line for any reason, we may charge you an overlimit fee as described in this agreement. We may, but are not required to, authorize charges that go over your credit line.
Overlimit Fee: If your account balance is over your credit line at any time during a billing cycle, even if only for a day, we may charge an overlimit fee. We may charge this fee even if your balance is over the credit line because of a finance charge or fee we imposed or a transaction we authorized.
Basically: it's up to YOU to keep track of how much you spend in relation to your limit; it's not our responsibility to stop you from exceeding the limit; and if you do, we "may" charge you for it.
And this is disclosed in the document that always goes out with the new cards every time an account is opened. You know, the one that nobody reads (except for me, because it's my job).
