Over-limit fee

The Pismo platform allows you to define over-limit fees and apply them to your operations on the organization or program level. The platform charges the over-limit fee on the account when the account limit goes over the allowed threshold. This feature is currently supported for credit accounts only.

During credit operations, the platform confirms and validates the purchases. If a purchase goes over the credit limit, the platform generates a negative account record and marks the account for the over-limit fee. On the statement closing day, the platform checks if the account uses the over-limit fee and if the account limit exceeds the maximum credit limit. If both are true, the platform charges the one-time over-limit fee.

To enable an over-limit fee on a credit product, perform the following steps.

  1. Update account limits to define the percentage_over_limit parameter on the account level.
  2. Contact the Pismo representative to configure the following settings.
    1. Set the program-level parameter Overlimit fee amount.
    2. Optionally, identify and mark the accounts for the over-limit fee usage.

Example

In this example, suppose the account with a credit limit of $100 is marked to use the over-limit fee if its balance goes above this limit by 10%. The over-limit fee is $20, as defined in the Overlimit fee amount program parameter.

During cycle 1, the account holder makes a purchase for $110, which is 10% over the credit limit and triggers the over-limit fee of $20. At the end of cycle 1, the statement balance amount is $130, which includes the purchase amount $110 and the over-limit fee $20. If the account holder doesn’t pay this amount, the balance of $130 carries over to cycle 2.

At the end of cycle 2, the statement balance amount is $136.5, which includes the carried over balance $130, the fine $1.00, and interest $5.50. The platform continues to apply fines and interest charges until the account holder pays the full owed amount.