Payment Card Limits
Payment cards come with several limits that govern how you can use them. Some limits are set by the card issuer and others by the user. Here are the key restrictions.
Card Issuer Limits
The card issuer sets usage limits that usually change only upon request. In the request you can state your preferred limits, but the issuer makes the final decision.
Charge Card Monthly Spending Limit
With a charge card, purchases are typically billed once a month on a statement. This usually doesn't add fees for the cardholder; instead, you get some interest-free time for purchases. The card typically has a monthly spending limit; you can't use the card beyond that. The limit usually resets only after you pay the statement in full.
You can temporarily increase a charge card's limit by making a prepayment toward the bill. In that case, the monthly spending limit increases by the amount prepaid.
Debit cards also have a monthly spending limit. You rarely hit it because the linked account balance is the real constraint. You can often raise a debit card's monthly limits yourself via self-service without a fresh issuer review.
It's wise to set the spending limit as low as possible. It still needs to be high enough to cover, for example, hotel and rental car deposits, with room left for other spending afterwards.
Credit Card Credit Limit
Many charge cards also offer credit. The credit limit determines how much you can leave on credit after the due date and pay in instalments. Using credit accrues interest.
Card-based credit is expensive, so the best credit limit is usually 0 euros. It pays to settle the bill in full by the due date so you don't need credit at all.
It's hard to justify a credit limit over 2000 euros, because heavy borrowing significantly increases the risk of financial problems, and card credit doesn't help in the long run. Please don't confuse the credit limit with the card's spending limit; keep it high enough.
ATM Withdrawal And Currency Conversion Limits
Almost all issuers set a cap on fee-free ATM withdrawals. The number of free withdrawals is usually only about 4 per month, but the exact number varies by card. After that, withdrawals incur a fixed or percentage fee. On the credit side, withdrawals are often fee-bearing from the very first time, so it's best to make ATM withdrawals directly from your own account.
Bank Norwegian Credit Card ATM withdrawals are fee-free.
The best credit cards also offer fee-free currency conversions. Traditionally, converting a card purchase made in a foreign currency costs 1.5-2% of the purchase total, but these days there are many cards on the market with a lower markup. Fee-free conversions have a monthly cap, so you can't exchange unlimited amounts for free.
If you often need currency conversions, check out Curve-, N26- and TransferWise Cards.
User-Set Limits
You should also set your own restrictions for the card. Do this via online banking, the issuer's app, or customer service. Self-imposed extra limits can improve card security a great deal.
Block Online Use
If you never use the card for online purchases, or your online shopping is occasional, it's best to block online use entirely. If needed, you can remove the block temporarily if you want to use the card online. Blocking internet transactions significantly reduces the risk of misuse.
Geographic Usage Restriction
Many issuers let you restrict card use to a specific geographic area. If you live in Finland, it's smart to allow only transactions within Finland. Before a trip, you can temporarily expand the area to cover your destination. It's risky to keep the whole world as the allowed area all the time.
Temporary Card Lock
With newer payment cards, you can temporarily block usage entirely via the issuer's app. This is sensible when you suspect the card is lost but aren't sure. While you look for the card, keep it blocked.
Bottom Line
Don't see the many limits on cards as a drawback, but as protective features. They guard against misuse and help you avoid losing control of your finances. When applying for a new card, think about the usage limits you want and avoid oversizing them.