Distinct from regular credit cards where you know your credit limit, the no preset spending limit credit cards from American Express do not have a spending threshold. Meaning, you aren’t restricted by a maximum dollar value you can charge to your card, and in theory, you can spend however much you want — within reason. At the heart of things, that’s what no preset spending limit represents.
How Does Amex’s No Preset Spending Limit Work?
The concise explanation of how Amex’s no present spending limit functions is that behind the scenes, Amex keeps calculating how much you can spend based on your purchases, payment history, as well as credit history.
Nevertheless, if you aren’t sure whether a specific amount will be approved, you can leverage the spending power tool from Amex first, for peace of mind.
Advantages of a No Preset Spending Limit Credit Card
The idea with such a unique credit card is that you can be adaptable with how much you can charge your credit card. That’s pretty much the essence of what a preset spending limit means. Specifically, it gives you an edge in the following two scenarios:
- When you want to levy a large amount to your credit card. For comparison, say, on a regular CC, your credit limit is $5k. That means that if all your bills are paid in full, and there are no pending transactions, the maximum amount you can purchase with that credit card is $5k. With a no preset spending card, you could buy something with a much steeper price, for instance, $8k.
- If you are a high earner and, by virtue, a high spender, and have a solid background of having fantastic credit scores and payment histories. In that situation, owning a no preset spending limit credit card can allow you to fully explore all possibilities of experiences that a credit card can buy, or precisely the Gold or Platinum card that American Express is known for.
Suggestions for Further Increasing Spending Power on an Amex No Preset Spending Limit Credit Card
In Amex’s terms, there is a chance to additionally expand your spending magnitude while keeping in mind that this calculation is ongoing. The methods through which this is achievable are:
- Use your card frequently, repeatedly, and routinely.
- Steadily increase your payments to this type of card over time. In fact, this is an emphasized aspect.
- As alluded to before, paying everything in time and in full — even external to the American Express realm.
- Last but not least, ensure you keep having a “good” credit profile.
Can American Express Take Away the No Present Spending Limit Feature?
The short answer is yes. At least, that is my interpretation. Amex says that may put a cap on the spending limit in “a small number of cases.”
Taking a guess and purely going off of speculation based on my knowledge, this could either be done initially when a no preset spending limit card is approved or could be done after the organization thinks the factors to having such a feature are deteriorating.
This isn’t to say that this can’t be reversed either; again, just a hypothesis from my end.
Which Cards From American Express Come With No Preset Spending Limit
As far as personal credit cards go, at the moment, there are three commonly recognized credit cards from Amex with no preset spending limit. These cards are (in order of annual fee, lower to higher):
- The Green Card
- The Gold Card
- The Platinum Card
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Would You Use a No Preset Spending Limit Card From American Express?
At some point, it comes down to whether a person wants to do a specific thing, even if all circumstances are feasible.
On the one hand, not being astute may lead down to a path of over expensing oneself with a no preset spending limit card, while on the other, a credit card with a limit may feel restricted in making single large purchases.
Overall, it’s great that American Express offers something like this in the first place, so if someone wants to partake in the benefits this type of card brings, it’s available for a spin.
Sidenote: this post is written from the perspective of personal credit cards only. Corporate or any business cards are not considered.
Expert Source: American Express