Understand your credit card’s daily transaction limits and how they help to protect you.
Daily transaction limits are not the same as your credit limit. Where your credit limit refers to the maximum amount of credit available to you on a credit card, your daily transaction limits refer to the smaller spending and withdrawal limits set on the card for your protection. For example, your credit limit may be $5,000, while your daily transaction limit may be $500, which means you can spend only up to $500 today and will need to wait until tomorrow to use the card again. Read this guide to understand how daily credit card limits work and how you can use them to manage your spending.
Why do cards have daily transaction limits?
This is an anti-fraud measure which you’d deeply appreciate if your card was stolen, because this would mean the thief could not wreak utter havoc on your account by maxing it out at once. Instead, your card may only be used for fraudulent transactions up to a certain amount, giving you time to report your lost or stolen card to the bank before too much damage occurs. See our guide on how to minimise the risk of fraudulent transactions for more tips.
What are the daily transaction limits on credit cards?
These vary between cards, and card providers usually impose different daily limits on different transaction types. The daily limits for debit cards are often lower than for credit cards, and some providers offer higher limits for premium and business products as well.
Daily transaction limits could apply to any or all of the following transactions:
- International ATM withdrawals. Some banks have different limits for international ATM withdrawals, and usually set lower limits for international transactions than domestic ones. You’ll be able to find the specific international ATM withdrawal limit in your card’s Product Disclosure Statement.
- Cash advances. Cash advances include ATM withdrawals made on your credit card, as well as cash-equivalent transactions including gambling, purchasing traveller’s cheques or money orders and prepaid phone credit.
- EFTPOS transactions. EFTPOS transactions include electronic payments made at the point of sale using your credit card.
- Contactless transactions. Contactless transactions like PayWave and PayPass are generically limited to $100 per transaction, with amounts beyond that requiring a PIN like a regular EFTPOS transaction.
- Domestic ATM withdrawals. There is usually a limit set on your total ATM withdrawal in a day, as well as possible limits per transaction. For example, you may be limited to $800 per ATM withdrawal up to a $3,000 daily limit, which means you’ll have to make four ATM withdrawals to reach your daily limit.
- Electronic fund transfers. There are sometimes also limits placed on the amount of money you can transfer electronically in a day, which you can also find in your Product Disclosure Statement.
Daily transaction limits for domestic and overseas spending
Your daily transaction limits are further distinguished between domestic and overseas spending. This is because of the varying degree of fraud risk you are exposed to while overseas, with international daily spending limits typically set lower than domestic ones. Before you go overseas, make sure you notify your credit card issuer of your holiday so they don’t lock your card as a security measure when they see your card being used overseas.
Can I change transaction limits on a credit card?
In some cases, depending on your card provider and card, you may be able to modify the default limits for certain types of transactions. For example, CommBank allows you to set customised transaction limits via Internet and mobile banking, also allowing you to disable your card for overseas use, block ATM cash advances or lock the card completely. Westpac on the other hand only allows you to adjust your online daily payment limit, while its EFTPOS and ATM limits stay fixed and mandatory for the purposes of fraud protection.
The process of requesting a change in daily or transaction limits varies, but usually involves one or all of the following:
- Contacting your credit card company. This is usually the most effective way to discover what your limits are, whether you can change them, and if so, by how much.
- Managing your preferences through Internet banking. These days with online and mobile banking apps, you can easily manage these settings by logging in and looking under your preference settings.
- Requesting a credit limit increase. In the event your daily limits are fixed in relation to your credit card type or credit limit, requesting a credit limit increase could provide greater daily access to funds. However, you should discuss and confirm this with your card provider before applying.
It is always good to be aware of your daily transaction limits, especially when you’re trying to make big-ticket purchases on your card, like buying a car for instance. Also be aware that your limits can vary by transaction, and are sometimes technically doubled if you have a supplementary cardholder, which could serve as a workaround if you need a higher temporary limit and are unable to arrange one. In any case, make sure you contact your card provider directly for more information relevant to your specific card and any questions you might have.
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