American Express and Discover customers will soon be free of fees for charging over their credit limits.
The two companies said separately Tuesday they will soon end the charges that have generated widespread criticism from consumers.
The moves come before credit card regulations set to take effect in February limit the way credit card issuers may charge such fees. Under the legislation signed by President Obama in May, consumers must agree to pay a fee before they can charge more than their credit limit, and card issuers must tell their customers how much those fees would be.
American Express currently assesses a $35 fee to most customers whose balances exceeded their credit card limits.
Amex spokeswoman Desiree Fish said the company began mailing letters to U.S. consumer credit card users last week informing them that as of the October billing cycle, they will no longer be assessed overlimit fees. The change does not apply to business cards or cards outside the U.S., she said.
The company also offers charge cards with no set spending limits that are not subject to such fees, but does not reveal what percentage of its cards fall in which category. Charge card customers will not be affected by the policy shift.
In its financial report for the quarter ended June 30, American Express said it had 49.8 million cards outstanding in the U.S. It did not break down the mix of consumer and business cards in that figure.
Discover Financial Services will begin notifying customers shortly, spokeswoman Laura Gingess said in an e-mail. She could not provide an effective date for the policy change.
Discover customers are charged overlimit fees of $15 on balances up to $500 and $39 on balances over that amount. The company does not detail how many cards it has outstanding in its financial reports.
Both companies said consumers may be able to continue to use their cards beyond their limits after the policy changes. Individual transactions that send balances over limits will be assessed at the time of the charge, they said.
"There are times on a case by case basis where we will allow a purchase to go through," Amex's Fish said.