Claude Code 429 Error: Why You Hit Rate Limits With Credits Left

The TPM Problem

API rate limits have two dimensions: requests per minute (RPM) and tokens per minute (TPM). Even with a full credit balance, you can't send 200,000 tokens every 30 seconds. Claude Code's agentic behavior — scanning files, reading git logs, checking package.json — consumes 'hidden' tokens before you even ask it to write code.

Context Bloat

By default, Claude Code sends your entire conversation history with every request. After a long coding session, this can be 100,000+ tokens per message. The fix: run /compact inside Claude Code to compress your conversation history. Run it every 50 messages or whenever context exceeds 20,000 tokens.

The .claudeignore Fix

Create a .claudeignore file in your project root (like .gitignore) to exclude build artifacts, node_modules, dist folders, and large data files. This prevents Claude from scanning everything and burning tokens on irrelevant files.

Use the --include Flag

Scope Claude to only the directories that matter: claude --include src/. This prevents full-repo scans that exhaust your TPM before you even start coding.

Upgrade Your Tier

Anthropic's rate limits scale by usage tier. Tier 1 allows roughly 50 RPM; higher tiers scale to 4,000 RPM. If you're hitting limits regularly, upgrading your tier or switching to Claude Max ($100-200/month) gives you significantly higher limits at a fixed monthly cost.