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What happens if you exceed your credit card limit?
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In today’s challenging economic landscape, many Americans are facing financial pressures on multiple fronts. For starters, persistent (but cooling) inflation has driven up the cost of consumer goods and the high interest rates meant to temper it have made borrowing more expensive. These hurdles have placed significant strain on the average person’s budget, leading many to become reliant on their credit cards to fill in the gaps between their income and expenses.
Recent data paints a stark picture of this trend, with the total credit card debt nationwide now sitting at a record high of $1.14 trillion. As more people have turned to their credit cards to cover essential expenses like food and fuel, there has also been a notable increase in maxed-out credit card accounts, with 20% of credit card accounts now at their credit limits.
But while many cardholders have no choice but to use their credit cards right now, it’s important to understand that there are repercussions for maxing out your credit cards and exceeding your spending limits. Below, we’ll detail what happens when you cross that threshold — and what options you have if you find yourself in this situation.
Don’t let the credit card debt issues compound. Find out what your debt relief options are here.
What happens if you exceed your credit card limit?
Exceeding your credit card limit can trigger a series of consequences, including:
Over-the-limit fees and higher interest rates
Many credit card issuers charge a fee when you exceed your credit limit, typically ranging from $25 to $40 per instance. In some cases, your card issuer may also increase your interest rate as a penalty for spending more than your limit. This double whammy of fees and higher rates can quickly compound your credit card debt, making it even more challenging to bring your balance back under control.
Learn how to take control of your growing credit card debt today.
Declined transactions and reduced credit limit
Once you’ve exceeded your limit, your card may be declined for further purchases until you pay down what you owe. This can be particularly problematic if you rely on your credit card for essential expenses. Plus, your card issuer might lower your credit limit as a risk-mitigation measure, further restricting your purchasing power and potentially impacting your credit utilization ratio.
Significant credit score impact
Exceeding your credit limit can have a substantial negative effect on your credit score, as it increases your credit utilization ratio, which accounts for about 30% of your FICO score. A high utilization ratio suggests to lenders that you’re overextended financially, potentially making you a higher-risk borrower. This can lead to a significant drop in your credit score, impacting your ability to secure loans or favorable interest rates in the future.
Loss of rewards and account privileges
Some card issuers may suspend or revoke rewards programs for accounts that exceed their spending limits. This means you could lose out on cashback, points or miles you’ve accumulated. You might also lose certain account privileges, such as balance transfer offers or the ability to request credit limit increases.
Increased scrutiny and potential account closure
When you exceed your spending limit, your account may be flagged for closer monitoring, potentially leading to more frequent account reviews. In extreme cases, repeatedly exceeding your limit might prompt the issuer to close your account altogether. An involuntary account closure can further damage your credit score and leave you without a crucial borrowing tool.
Long-term consequences for future credit
A history of exceeding credit limits can make it harder to qualify for loans or new credit cards in the future. Lenders view this behavior as a red flag, indicating that you might struggle to manage credit responsibly. This can result in loan denials, higher interest rates on approved credit or lower credit limits on new accounts.
What to do if your credit card debt is out of control
If you find yourself struggling with overwhelming amounts of credit card debt, there are several debt relief options available:
- Debt consolidation: Consolidating your debt involves taking out a new loan to pay off multiple credit card debts. The goal is to secure a lower interest rate, making it easier to pay off what you owe.
- Balance transfer: Similar to debt consolidation, a balance transfer involves transferring high-interest credit card balances to a new card with a lower or 0% introductory APR, temporarily reducing the cost of the interest charges.
- Debt management plan: With a debt management plan, the goal is to create a structured repayment plan that may include negotiating lower interest rates with your creditors.
- Debt forgiveness: When you pursue debt forgiveness, the debt relief company you work with negotiates lump sum payments with your creditors that are less than the full amount owed.
- Credit card hardship programs: Many issuers offer temporary hardship programs that can lower interest rates or waive fees if you’re experiencing financial difficulties.
The bottom line
While the current economic climate has made credit card reliance a necessity for many, it’s important to understand the risks of exceeding your credit limits. If you find yourself approaching or exceeding your limit, take proactive steps to address the situation, whether it’s cutting expenses, seeking additional income sources or exploring your debt relief options. Ultimately, taking action sooner rather than later can help mitigate the long-term financial impacts of credit card debt.
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What started out as a college romance ended in murder and mystery.
1994 – Scott Peterson and Laci Rocha met in 1994 while both were attending college at California Polytechnic State University. They married two years later. In 2002, Laci became pregnant. The two lived in Modesto, California and planned to raise their unborn son Conner there.
Laci Peterson Missing
December 24, 2002 – Scott Peterson says that on Christmas Eve morning, he left his pregnant wife alone to go fishing about 90 miles away at the Berkeley Marina. He says that Laci planned to walk the couple’s dog, McKenzie, and mop the kitchen floor. When Scott returned home hours later, he says he found McKenzie there alone, still wearing a leash – but no sign of Laci. That evening, Laci’s stepfather called the police to report her missing.
Searching for Laci
Family, friends, and volunteers launched a huge search for Laci Peterson.
Scott Peterson was interviewed by police in the early hours of Christmas Day. Now-retired Modesto Police Detective Jon Buehler says Scott didn’t seem as interested as one would expect. “Oftentimes, a victim who’s left behind is firing tons of questions at us … And we didn’t get any of that from him,” Buehler told “48 Hours.”
Amber Frey
December 30, 2002 – Less than a week after Laci Peterson went missing, Modesto detectives raced over to investigate an intriguing lead: a Fresno massage therapist named Amber Frey revealed that she had been dating Scott Peterson for over a month. She told police that Peterson had lied to her and said he was single.
Secret Recordings
Former Detective Buehler notes, “Her recall was fantastic. It was almost like it was a script from a Hallmark TV show or something.” Amber Frey recalled every detail of their romantic dates, down to what they were wearing. Hoping for clues that might lead them to the missing woman, detectives ask Frey to record phone calls between her and Scott Peterson, and she agrees.
Affair Revealed
January 24, 2003 – In an explosive press conference one month after Laci Peterson goes missing, Amber Frey publicly reveals her affair with Scott Peterson. “I am very sorry for Laci’s family and the pain that this has caused them,” she said. “And I pray for her safe return, as well.”
Prior to Frey going public, Peterson had told her in a recorded call that he was in Paris when he was really in Modesto while the search for Laci was still on. Eventually Scott admitted to her, “I’ve lied to you that I’ve been traveling.” Those recorded calls would later become part of a damning case against Peterson.
Bodies Found
April 13 and 14, 2003 – Two bodies are found on the shores of the San Francisco Bay. They are later identified as Laci Peterson and her unborn child. The two bodies were found about a mile apart.
Scott Peterson Arrested
April 18, 2003 – Authorities caught up with Scott Peterson at a golf course in San Diego and arrested him. Authorities found a wad of cash, his brother’s ID card, and multiple cell phones inside the vehicle. Days later, Peterson pleaded not guilty to two counts of capital murder.
Trial and Error
June 1, 2004 – Scott Peterson’s trial begins in San Mateo County, California. Because of massive publicity the trial was moved from Modesto to Redwood City, in San Mateo County. The decision was made because the judge decided it would be difficult for Peterson to get a fair trial too close to home, where emotions were running high.
High Suspicions
August 10, 2004 – In what many consider a major turning point of the trial, Amber Frey took the stand for the first time to tell the jury about her relationship with Scott Peterson, a secretly married man, and about all the lies he told her. Frey painted a picture of a dishonest man who could tell falsehoods with ease, hurting his credibility.
Jurors heard the lies for themselves in those recorded phone calls Frey made.
Justice for Laci and Conner
November 12, 2004 – Scott Peterson was found guilty of first-degree murder for the death of his wife Laci and second-degree murder for the death of his unborn son Conner. Crowds outside cheer.
Peterson Jurors
March 16, 2005 – Four months after his conviction, Scott Peterson is sentenced to death. At a press conference, Juror No. 7, Richelle Nice, [pictured center] called Peterson a “jerk” and commented “San Quentin is your new home,” referring to the prison where he would serve his sentence. Nice was nicknamed “Strawberry Shortcake” during the trial because of her hair color.
Death Sentence Overturned
August 24, 2020 – After two appeals, Scott Peterson’s death sentence was overturned by the California Supreme Court after deciding that the original trial judge made a mistake when jurors were being picked for trial. The result of that mistake, Peterson’s supporters say, was that the jury was stacked with pro death penalty jurors. Peterson, shown here in 2018, will now receive a new trial for only the sentence phase.
The court upheld his murder convictions.
Juror No. 7
October 14, 2020 – The California Supreme Court orders a lower court to reexamine Peterson’s murder convictions and decide if he should get an entire new trial. Scott Peterson’s supporters say it all comes down to the actions of that juror once nicknamed “Strawberry Shortcake” – Richelle Nice, pictured here in 2005.
During jury selection, prospective jurors filled out a questionnaire asking if they had in the past been in a lawsuit and if they had been crime victims. Nice checked no. “It’s pretty clear… that she lied to us straight to our face about her own situation,” Peterson’s current attorney Pat Harris told “48 Hours.” In fact, Nice was involved in two domestic disputes in the past. But prosecutors say when Nice filled out that questionnaire she didn’t lie, she just didn’t think her past experiences were relevant to the questions and didn’t see herself as a victim. Now a lower court will consider if Peterson will get a complete retrial. Richelle Nice declined to speak with “48 Hours.”
New Evidence?
March 7, 2021 – CBS News’ Jonathan Vigliotti interviewed Scott Peterson’s sister-in-law Janey Peterson in her “war room” of evidence she claims proves his innocence. She claims witnesses saw Laci walking in the neighborhood near the Peterson home after the time Scott said he left for the fishing trip. If that’s true, Scott couldn’t have killed Laci.
Scott Peterson’s attorney explains, “there’s been a lot of criticism because we didn’t call some witnesses who saw Laci that day,” and that the thought process at the time was that “a number of the witnesses who saw her didn’t have great – memories or had contra – were contradicting each other.”
Retired detective Jon Buehler says there are no witnesses who saw Laci alive that morning. He says there were other young women in the neighborhood who were pregnant and looked similar to Laci, and that “it would be real easy for somebody to mistakenly see one of those three girls as being Laci.” Still, Janey Peterson insists that Scott is innocent.
A Burglary
Perhaps more important to a new defense case is what Janey Peterson believes actually happened to Laci. She points to a burglary she believes happened on the same day Laci disappeared, right across the street from the Peterson home. Scott Peterson’s supporters theorize that Laci confronted the burglars and that ended badly. But police quickly arrested the burglars – Steven Todd and Donald Pearce – pictured here in a 2003 Modesto Police Department press release.
Awaiting a Decision
April 27, 2021 – Scott Peterson appeared in court remotely for a status hearing on a new death penalty trial.
Dec. 8, 2021: Scott Peterson was resentenced to life in prison without the possibility of parole for the deaths of his wife and unborn child.
2024: The Los Angeles Innocence Project took up Peterson’s fight for a new trial. Since then, a California judge has granted his defense team access to previously undisclosed evidence as well as permission to do additional DNA testing.
Peterson and his supporters maintain the wrong man is in prison for Laci and Conner’s deaths. According to Detective Buehler, “Well, I guess it’s possible. But you know, there’s still people that believe the Earth is flat too.”
