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Can You Overdraft a Credit Card?

5 min read

Last Updated: April 25, 2025

Table of contents

Key Takeaways

Some credit card issuers may let you exceed your credit limit if you authorize over-limit transactions and agree to pay an overdraft fee.
If you go over your credit limit due to interest charges you won’t incur a fee.
When you use all your credit limit (or exceed it) it may hurt your credit score.

Is there a difference between exceeding your credit card limit and an overdraft? An overdraft means that you’ve spent more money than the available balance in your bank account. When you exceed your credit card limit, it’s called an over-limit transaction or going over-the-limit.

What is a bank overdraft?

An overdraft is associated with a checking account or debit card at a bank or credit union. If you write a check for more than you have in the account, a bank will normally return the check for insufficient funds (widely known as bouncing a check).

If you’ve signed up for overdraft protection, the bank might extend temporary credit for the shortfall and pay the transaction. According to the FDIC, overdraft services usually incur a fee for each transaction. Overdraft fees average around $35 and could be charged each day you are overdrawn.

What happens when you go over your credit card limit?

In contrast to a bank overdraft, with credit cards you're spending credit, not cash. Your card issuer specifies a credit limit and will decline transactions that would put you over that limit.

Some of the best credit cards will let you go over your credit limit if you opt-in and agree to applicable fees. In fact, cards like Discover may allow you to go over your limit without paying an over-the-limit fee.

Some cards may allow certain over-the-limit transactions based on your history with them or the amount of the transaction. Be aware that in these cases it may be difficult to know how much you’re allowed to spend over your limit. Look closely at the terms and conditions of your card for details.

According to federal law, your card issuer can’t charge an over-the-limit fee if you go over your limit only due to interest charges.

If you opt-in to pay over-the-limit charges, your card issuer may have strict policies about these transactions. As an example, they may require you to pay back the over-limit amount immediately. They may also decline further transactions on a card that’s at or over the credit limit.

Even if you initially agreed to over-the-limit transactions and fees, you can always opt out later. When you opt out, the card issuer will go back to declining new transactions that would put you over your limit.

It’s important to note that while you may be able to go over your limit, the best practice is to avoid doing so. It may be a signal to creditors that you are having difficulty managing your finances.

How exceeding your credit limit affects your credit score

While fees are a major downside to over-the-limit transactions, there are other aspects to consider. One consequence is the impact on your credit report and credit score. Going over your credit limit or maxing out your card may raise your credit utilization to a point that impacts your credit.

What is your credit utilization ratio? It’s the percentage of credit you’re using out of the total credit you have. For instance, if your credit limit is $1,000 and your card balance is $300, you’re using 30% of your available credit for that card. If you use $1,000 or more on that same card, then your credit utilization is 100% or more.

Credit utilization accounts for about 30% of your total credit score. Because it appears on your credit report and accounts for so much of your credit score, exceeding your credit limit is likely to negatively change your credit score.

Did you know?

If you're close to your credit card limit, a balance transfer offer could help. Look for a 0% intro APR balance transfer offer from issuers such as Discover. If you qualify, you may be able to lower your interest rate on your existing balance, which can make paying off your balance easier.

Learn More

Alternatives to going over a credit card limit

If you find yourself relying on your credit card’s over-limit feature, it may be time to consider alternatives. There may be other ways to access the credit you need.

Request a credit limit increase: Do you have a good credit score, an excellent payment history, or a recent increase in income? If so, you may qualify for a credit increase. A higher credit limit might improve credit utilization, too.

To increase the credit limit on your Discover Card you can:

Call the number on your credit card
Visit the Discover Account Center

Select “Card Services”
Then select “Credit Line Increase.”

Request through the Discover Mobile App

Apply for a new credit card: Another way to increase your available credit is by adding a new credit card account. If you have a good credit score, you may qualify for more credit. In this case, look for a new credit card that offers better benefits than your current card or a low-rate balance transfer offer.
Take out a personal loan: In general, personal loans have lower interest rates than credit cards, but you may need good credit for approval. You can use a personal loan to consolidate your credit card debt in one place with one payment. It is best to check with the loan provider what types of debt you can consolidate.
Apply for a home equity loan: If you have equity in your home, you may want to consider applying for a home equity loan, which may have lower interest rates and less strict credit requirements. Like a personal loan, a home equity loan can help you consolidate debt, lower your total monthly payments, and even save on interest.

The bottom line

An overdraft means that you’ve spent more money than you have in your bank account while an over-limit transaction is when you exceed your credit card limit. While going over your credit limit might affect your credit score, there are actions you can take before that happens.

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