The vast majority of credit unions no longer permit credit-card holders to exceed their credit limits, according to The Members Group.
The group, a unit of the Iowa Credit Union League that offers card programs, said last week that 95% of its clients no longer authorize overlimit transactions, and the rest have eliminated fees for cardholders that do go over their limits.
Eliminating such fees was one of the provisions of the Credit Card Accountability Responsibility and Disclosure Act.
"There's no doubt some cardholders will miss the ability to spend over their credit limits," said Sara Petty, the unit's vice president of strategic initiatives. "However, removing the temptation to overspend really makes sense for credit unions as they lead the country's efforts to return to thrift and financial responsibility."
Implementing the CARD Act presents challenges to issuers, which must serve the customers who opt-in for overlimit fees, and those who do not. "To complicate matters, the two groups would be in constant flux, as cardholders maintain the ability to change their minds," Petty said.
