Not Knowing Your Credit Limit Can Cost

Most credit cards have a credit limit - the maximum balance you can carry on your card without incurring a penalty. Don't make the mistake of thinking your credit card will be denied if a purchase will put you over the limit. If you're close to the credit limit, new charges will likely go through triggering an over the limit fee of up to $39 in some cases. That's not the only penalty.

Many banks are now increasing interest rates for cardholders who go over their credit limits. MSNBC's Red Tape Chronicles reports three different banks - Discover, Chase, and Bank of America - who detail these types of interest rate hikes in their credit card agreements. Refer to your credit card agreements to see if your cards have an interest rate penalty for exceeding your credit limit.

For tips on avoiding credit limit charges read 5 Ways to Avoid Over-the-Limit Fees.