A couple of months ago we had opened a Citi Cash Returns Master Card account to avail it's promotional rate of 5% cash back on all purchases for first 3 months. At present the effective cash back on this card is 1.20% on all purchases for the first year.Well, to maximize our rewards we were using this card for all purchases, big or small. And on that spree, while booking a flight to London, we accidentally overshot our credit limit. Sadly enough we were not aware that we had gone over our credit limit.
Next month we noticed a hefty "over the credit limit" fees of $39 on our credit card statement! That was quite a high fee for going over the limit.
Credit card companies allow us to go ahead with the transactions even if we overshoot our credit limit. Why? So that they can make money by sneaking in these high fees.
The challenging part of this game is that it takes a day or two for transactions to show up in our online account's activity section. As a result, when we log on to our accounts, we never get a current snapshot of our card's transactions. Now if we go ahead and charge a big purchase based on a delayed snapshot, chances for going over the limit are high. We figured it makes sense to have an alternate system to keep track of our credit card transactions.
However, for us there was a silver lining to this story. We called Citibank's customer service and explained the situation. Our saving grace was the fact that we had requested a credit limit increase around the time we'd purchased our flight tickets. So we pleaded with them to waive this fee since we had requested a credit limit increase which was granted a week after our flight tickets' purchase. The customer service representative was kind enough to honor our request and grant us a credit of $39!The lesson that we learnt from this experience is to keep a tab of our credit card's transactions via any system that works (paper notebook, online expense tracker, etc). Before we make any big purchases we should add up our expenses and make sure that we're within our credit limit. Else the credit card companies would end up wealthier!
If you'd like to share any interesting credit card experience please feel free to leave a comment. We'd really appreciate it.
Image Source(s): iStockPhoto
