American Express Policies Eliminate Credit Card Overlimit Fees

In August, American Express became the first major credit card issuer to announce an opt-in overlimit policy. Mandated by the CARD Act, an opt-in policy requires customers to specifically request the ability to make charges beyond their stated credit limits. Industry analysts expect few customers to opt-in for overlimit access, effectively meaning the end of overlimit fees for most Americans.

While pundits bemoan the loss of such a lucrative revenue stream, marketers see the change in overlimit policies as an opportunity to build rapport with customers. By publicizing their elimination of overlimit fees, officials at American Express hopes to position their brands as customer-friendly alternatives to other bank-issued credit cards.

However, unintended consequences of the new rule may affect account holders. Automated charges, like those for utility bills or installment payments, will no longer pass through merchant payment systems if a cardholder has exceeded their balance. The trade-off for fewer credit card fees, for most Americans, is the need to carefully watch accounts to prevent declined transaction surcharges from vendors.

About the Author


Joe Taylor Jr. is an internal business consultant for a Fortune 500 company, who writes about finance, culture, and design. He holds a Bachelor of Science in Communications from Ithaca College.