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I see that some tournaments with prizes are limited to low rated players. Given that travel requires planning, I expect entry to the tournament is processed some time before the 1st day of the tournament.

So what happens if a person does very well in another tournament shortly before and hence get an increased rating?

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The rules are specific to each tournament. For example 2021 U.S. Class Chess Championships specified "July 2021 Rating Supplement used for pairings and Prizes".

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According to the USCF,

Official ratings lists are generated on the 3rd Wednesday of each month and become official on the 1st day of the next month. For events that begin prior to September 1st, the August supplement should be used.

Tournament directors should use the appropriate published rating unless otherwise announced in all pre-tournament publicity.

So this gives at least a week (and possibly over a month) as a buffer; a tournament starting anytime in March wouldn't consider any rating changes after the official March list is generated, which would be sometime between February 15 and 21 depending on what day Wednesday fell. I can confirm that at least once in my youth I was able to win a small class prize based on my officially published rating, despite my not-yet-published rating from a recent tournament putting me above the limit for that prize.

But maybe you registered well in advance, and your new rating is published in time to be used. Most tournaments would allow you to join another section if you registered well in advance and were no longer eligible for the section you initially selected, although it's possible that space would no longer be available. In that case they'd probably just give you a refund. They aren't going to let you play in a section if your officially published rating is too high for it.

If you're concerned about this possibility, it's possible in many tournaments to register for the section above your current rating, instead of the one which matches your rating. This has the obvious drawback that if your rating doesn't increase, you're still stuck playing the tougher opponents (although some people like the better competition anyway.)

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