Credit Card Restrictions

Credit card restrictions can determine how you use your card. For example, some cards may limit you to shopping at certain stores, and others may penalize you for late payments by charging a fee each time you're tardy. Restrictions vary, and the Federal Trade Commission says you should read your credit card application carefully before applying for a card.

Your credit card company will establish a credit limit on your account when it is initially approved. The limit could be raised or lowered at any time. Some department store credit cards feature small credit limits of a few hundred dollars. Other full-featured bank credit cards such as a MasterCard or Visa may offer credit limits of more than $10,000, depending on your credit. You will not be allowed to charge more than your credit limit unless you have given your card company permission to process transactions that would exceed the limit. That opt-in requirement is part of the Credit Card Accountability, Responsibility and Disclosure Act of 2009 signed by President Barack Obama.

The credit card company may not allow you to withdraw all of your credit limit as a cash advance. Cash advances are available from ATMs and inside banks. Full-featured bank cards generally will allow you to take all of your credit limit as a cash advance, but department store and gas station cards may allow only a small amount to be taken as a cash advance.

Not all merchants accept every credit card -- another possible restriction. For example, a department store credit card can be used only at that department store or an affiliated company.

Most credit cards are unsecured, meaning no collateral is required other than your promise to pay. However, secured credit cards require that you deposit money into a savings account that is held as collateral. The amount on deposit becomes your credit limit, and the bank issues you a MasterCard or Visa that works like any other full-featured bank card. You may be required to deposit more money into the savings account before receiving a credit limit increase.