Now, if you want to be allowed to go over the limit, simply opt-in. Card companies deem transactions over the limit as a convenience. If cardholders want the convenience, they’ll opt-in. If they don’t, then they’ll suffer. However those that haven’t heard of such a scheme, expect credit cards to have a hard limit, and their expectations should be met from the onset of receiving their credit card. Still, that’s no excuse for merchants not to upgrade to modern technology to do real-time authorization and transactions. This is important to the security of the industry otherwise the merchant is at risk of protecting stored credit card information on their end, which can lead to identity theft of the cardholder or fraudulent activity against the merchant. However it’s their risk & responsibility, not the credit card company, and certainly not the consumer.

I might misunderstand your frustration, but I don’t drive so I rarely interface with gas pumps. I just think gas stations should rethink their design if it’s flawed or based around assumption that cardholders have the convenience of going over the limit.

But think of it this way: as a consumer shopping in a department store, you find an expensive suit (think $100s) representing a huge discount of 95%. You buy it. Are you responsible for mistake by the department store after the transaction?

The over-limit fee isn’t going to protect merchants from dishonest or consumers that bring risk, nor do they expect consumers to be autonomous. That’s why merchant’s buy insurance .

On another note, I do support the passing of the Credit CARD Act especially in the context of standardizing payments and notifications. The credit card industry has gotten to the point where it needs to be seriously rebuilt from the ground up. In the meantime — luckily for us! — there is a growing number of sites out (off the top of my head, BillShrink.com is a great example) there that aim to guide people through the intricacies of credit card plans; IMO, it’s better to have computers wade through the tedious fine print and zillions of options rather than me. The combination of these free online resources and an overall increase in personal financial responsibility might just be the tipping point for improving the economic sense of America.

I came across this blog skimming google results to figure out how credit card companies will turn a profit in lieu of the Credit Card Act of 2009. The sudden interest came about after being hit with an overlimit fee. I’ve been a responsible card holder over 3 years. I never actually wanted a credit card until realizing the difficulty of renting an apartment, receiving low premiums on insurance, etc. in California. Frankly it’s quite upsetting because I earn a considerable amount of income and have never been in debt.

Last week I had a lapse in financial responsibility and went over the credit limit. I only noticed days later when card transactions were successively declined. Then bam, hit with a $40 charge. Now I’ve never had official training using credit cards and knowing the ins and outs. All the good practices I learnt from my father, so this overlimit fee was news to me. I thought a credit limit was just that, a limit that you couldn’t go over. I managed to get the fee reversed after days on the phone with the card company. What upset me was their stubbornness to remove the fee, but their outrageous lies. Every agent and their manager said I couldn’t opt for hard limits. It took second hand advice from a close friend and a threat to cancel my card to actually change my account to reflect hard limits.

This experience has lead me to believe that the Government doesn’t want to condone irresponsible behaviour but protect consumers from the vile practices of credit card companies. It’s not the over-limit charge that I want protection from, but from the card companies not advertising the fact that you can opt-out. In my opinion, it’s the card companies that are being irresponsible.

Just my 2c.

Will this end people abusing credit cards? Of course not. People will always abuse them. But standardizing rules takes away a big excuse and makes things clearer for everyone involved – including the credit card companies.

Will this decrease credit limits? Probably. but is that really a bad thing? I understand the need to spend money to maintain economic growth, but the reason the real estate bubble happened was too much easy credit. And many people who are not financially savvy treat their credit cards as easy credit. People with a $30,000/year income do not need a $30,000 line of credit on their credit cards.

No recourse for bad loans? Then credit card companies shouldn’t be so quick to approve everyone that applies for a credit card and extend their line of credit after the borrower makes 2 or 3 payments on time. If the credit card companies were really interested in having the loans paid back on time and in full, they would be more strict about approving cards. For credit card companies it is strictly a numbers game. They know their demographics and how many cards they need to approve and at what rates and credit limits to achieve profitability. The ideal credit card customer does not pay their bill on time, but maintains a perpetual balance.

I highly recommend reading this excellent NY Times article: What Does Your Credit-Card Company Know About You?

I will reiterate my earlier sentiments: Ultimate responsibility lies on the card holder, and I don’t think credit cards or credit card companies are evil. But I do think there needs to have more standards within the industry.