Citibank gives customers a chance to pay down an over-limit balance before charging a fee. Credit card issuers have two basic choices when a customer makes a purchase that exceeds a credit limit. They can decline the transaction or approve the transaction and charge a fee. A third option, approve the transaction and automatically lift the credit line, is reserved for the very best credit card customers. The difference is there's more information for banks to look at so they can decide which way to respond.
Issuers decide what customers can go over credit limits and by how much.
The last thing an issuer wants to do is decline a card purchase. What a difference 20 years makes. There's little chance of penalty fees coming down anytime soon. So it looks like issuers will continue to charge bigger and bigger fees to customers that outgrow their credit limits. Don't let it happen to you.