Understanding the Need for Daily Limits on Credit Cards

Information verified correct on September 28th, 2016
credit card and a key

Your credit card is set with a daily credit limit. This limits you to spending only a certain amount of money using your card each day for your own protection.

Why do credit cards have daily credit limits? Keep in mind that your daily limit is not the same thing as your available credit limit. Your account’s daily limit might be set at a maximum amount of $200 spent each day before you need to wait until the next day to spend more, even though you may have plenty of available credit left on your card.

Essentially, this is an anti-fraud measure, designed to help protect your account against thieves stealing your card and then running up thousands of dollars in charges. If your card has a daily credit limit applied to it, a thief will find that the limit is reached very quickly and the card can’t be used again until the next day.

Hopefully, you would have noticed your credit card missing by then, or have checked your online account balances and noticed transactions being made that you didn’t make. You can then cancel the card and notify your credit card provider.

Your credit card provider may also have other anti-fraud monitoring and security systems in place to help guard against fraudulent activity on your account.

For example, any unusual spending patterns will be noticed by the bank. They monitor for any spending that might deviate from your usual spending patterns. There are some things that flag the bank’s warning systems, telling them the spending activity could be indicative of a stolen card. These are often looking for large amounts of spending on items that can be resold quickly, such as jewellery or even prepaid mobile phone credit.

Another area that is monitored heavily is a sudden change in where the transactions are originating. Plenty of customers have complained about credit cards being cancelled while they’re travelling. This is usually because they’ve used a card to pay for something while away from home and the bank’s security systems have recognised a change in regular patterns.

If you are planning on travelling and using your credit card while you’re away, let your bank know. Call your bank’s customer service representative and let them know you’re likely to be making purchases using your card in a place away from home. This way, the security system won’t be alerted by your own spending.

The same is true if you want to purchase an item that will cost more than your usual daily credit limit allows. It’s relatively easy to raise your own credit limit, or you have the option of temporarily raising it by contacting your bank and discussing your needs with them.
Choosing a Responsible Credit Limit for your Credit Card

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4 Responses to Understanding the Need for Daily Limits on Credit Cards

  1. Default Gravatar
    Allen | September 26, 2015

    But I do not think CBA CC has this spend limit, are they?

    • Staff
      Jonathan | September 29, 2015

      Hi Allen, thanks for your inquiry!

      Commonwealth Bank credit cards permit spending up to the approved credit limit on your credit card.



  2. Default Gravatar
    al | May 1, 2013

    need card for bus with daily spend limit.

    • Staff
      Jacob | May 1, 2013

      Hi Al. I’m not sure I understand your question. Can you please clarify what you mean and get back to me? Jacob.

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