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The over-limit gotcha now has more teeth as Chase recently announced it will impose a fee if your balance exceeds the credit line anytime during the billing cycle, as opposed to the general practice of hitting you if remain over-limit on the closing day of the billing cycle. Over-limit fees, largely non-existent 15 years ago, have increased 17% over the past three years, with the average fee among top issuers currently at $33.50. A decade ago, issuers would typically assess over-limit fees only if you exceeded the credit line by 5%-10%. Some issuers formerly considered over-limit fees bad business. One major program, the General Motors MasterCard, launched in 1992, was devoid of any over-limit fees until 1996.

Understandably, cardholders who max out credit cards are the most susceptible to an over-limit situation. Finance charges added to the account on the closing day of the billing cycle can trigger an over-limit fee. Card issuers may also authorize transactions that cause you to exceed your credit limit. Additionally, new cardholders need to be aware that making a maximum balance transfer can trigger an over-limit fee on the very first statement. For example, a CardWeb.com employee applied for and received a credit card with a a $5,000 credit line and a 0% interest rate for balance transfers. The employee then wrote out a balance transfer check for $4,975 to pay-off another credit card. When the first statement arrived, the employee was charged an over-limit fee due to a balance transfer fee. The balance transfer fee was $45, which, added to $4,975 balance transfer, raised the new balance to $5,020. A $29 over-limit fee was then added. The card issuer eventually waived the fee after the employee claimed foul play.

Going over-limit can also trigger more severe penalties since it is considered a default. Card issuers may jack up your rate to 27% to 30% because of a default. Worse yet, more and more issuers have universal default clauses buried in the fine print of the cardholder agreement. Therefore an over-limit account could trigger higher interest rates on all your credit card accounts, regardless of who issues the card.