John S Kiernan, Managing Editor
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No Preset Spending Limit (NPSL) means that your card does not have a pre-determined credit line. This does not mean that consumers will be able to spend limitlessly with No Preset Spending Limit credit cards and charge cards though.
An issuer uses various factors including your income, credit score, payment history and spending patterns in order to determine how much money you can spend in a given month. This amount (known as your credit limit) may change from month-to-month and you may not be able to find out what it is.
The way an NPSL card affects your credit score will depend on what information its issuer reports to the credit bureaus. This is because your credit utilization is factored into your credit score. Since NPSL cards lack a specified limit, issuers can either report credit activity in a way that includes them in credit utilization ratios (either as a credit limit or a high balance), or simply exclude information that determines these ratios.
People also ask
Are there any no limit credit cards?
No, there aren’t any no limit credit cards. All credit cards have some sort of limit at the end of the day. No credit card gives cardholders unlimited purchasing power. The closest thing to no-limit credit cards are no preset spending limit cards, which are essentially cards with no specified spending capacity. With these cards, issuers will determine your purchasing power on a rolling basis, depending on a number of factors, including your balances and...
read full answerHow does a charge card work?
A charge card works a lot like a regular credit card, but without the option of making a partial payment. In other words, the main difference is that cardholders typically must pay their entire statement balance each billing period with a charge card. For that reason, the minimum payment on a charge card is usually the same as the statement balance. That said, some charge card issuers such as American Express have started to allow...
read full answerDoes American Express Platinum have a credit limit?
No, the American Express Platinum card doesn’t have any preset spending limit. That does not give cardholders unlimited purchasing power, though. It means American Express won’t give you a specific credit limit once you’re approved for the card. Rather, they calculate your purchasing power based on how much you spend on the card as well as your income, any debt you carry, and your overall creditworthiness.
Using a American Express Platinum card: Things to Consider
Credit utilization: While “no...
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