Nobody Will Stop You From Going Over Your Credit Limit

This may sound a little harsh, but it's not the credit card's fault you went over your credit limit. It's your own.

"But they let me go over," you argue. Your car will "let" you go over the speed limit, but do you blame the manufacturer for your speeding ticket?

When you exceed your credit limit - the maximum amount you can charge on your card without penalty - there is a string of consequences, some you may not be aware of. First, you'll get charged an over-the-limit fee. Not only that, your interest rate might increase to the default rate. Due to universal default, your other interest rates might go up too. Finally, depending on the balances of your other credit cards, you might see a credit score drop.

Some consumers argue that credit cards should be declined rather than letting you go over your credit limit. I say it's your responsibility to know your limit and stay far enough below it so that you don't get assessed fees.

There are cases where cardholders mistakenly exceed their credit limits because they've recently been lowered. The current credit crunch has many lenders dropping credit limits, even for timely-paying customers with good credit scores. If anyone has an excuse for going over their credit limits, it's these cardholders.

Ideally, a creditor would have to notify the cardholder in advance of a credit limit decrease to give them the opportunity to lower their balance and avoid any penalties. Of course, this would mean the credit card companies earned less money, so I don't see them volunteering this practice.

If you're a credit card user, 5 Ways to Avoid Over the Limit Fees will help you avoid those $39 limit fees and interest rate increases.

• Common Credit Card Fees and How to Avoid Them
• 5 Principles of Making Credit Card Payments
• How a Late Payment Affects Your Credit