Amex, Discover Eliminate Over Limit Fees

The Credit Card Accountability, Responsibility and Disclosure Act, signed earlier this year, is already paying dividends for consumers. As the WSJ reports, Amex and Discover cardholders should soon be receiving notices that they will no longer be charged fees if they exceed their credit limit. This move was spurred by the credit card act that expressly prohibits issuers from levying fees unless the consumers have explicitly requested to surpass their limit and have indicated they are willing to pay to do so.

Instead, both Amex and Discover will program their systems to analyze cardholder spending patterns and credit ratings to determine on an individual basis whether consumers will be allowed to exceed their credit limit. As the WSJ notes, the decision to remove the fee was not the result of benevolence–rather, it was probably just cheaper alternative to programming their systems to allow consumers the ability to opt into paying the fee.

It’s a good bet that with this precedent set that other banks will eventually follow suit.