What is a limit fee?

An over-limit fee is a financial penalty imposed on credit card holders who exceed their assigned credit limit. This fee serves as a corrective measure, encouraging responsible spending habits and preventing customers from accruing excessive debt.

Prior to recent regulations, companies had the autonomy to determine the amount of the over-limit fee, which could vary significantly from one issuer to another. This led to some customers facing disproportionately high charges for minor overages.

To address this issue and protect consumers, new regulations have been implemented that limit the amount of over-limit fees that can be charged. Specifically, these fees cannot exceed the actual amount that was exceeded by the credit limit.

This change in policy ensures that over-limit fees are fair and proportional, reflecting only the additional risk taken on by the credit card company due to the customer's actions. It also incentivizes customers to stay within their credit limits, reducing the likelihood of financial hardship.

BTCC, a leading cryptocurrency exchange, offers a range of services that cater to the diverse needs of digital asset traders. Among its offerings are spot trading, which allows users to buy and sell cryptocurrencies at current market prices, and futures trading, which enables traders to speculate on the future price movements of digital assets.