What Does No Preset Spending Limit Mean?

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Some credit cards have strict spending limits that are based on factors like your income or credit history. Some credit cards do not have a spending limit. This does not mean they do not have a spending limit.

If you have a credit card with no fixed spending limit, your credit ceiling will change as your spending habits or payment habits change.

Learn more about how cards without a spending limit function.

What is No Fixed Spending Limits?

No-preset-spending limit (NPSL) credit cards have no credit limit. There is no actual limit, but you will still have a credit limit.

Mike Sullivan is a personal financial consultant with Take Charge America in Phoenix, a nonprofit credit counseling agency. Every card has a limit and the consumer can be informed that their card with no limit will be declined when that limit is reached.

The monthly limit may change based on:

Spending patterns.
Financial assets.

If your financial situation is more or less unchanged, you might be able charge the same amount each month. A change in your income, or your credit score could affect the amount you can spend.

What cards have no pre-set spending limit?

Cards without a pre-set spending limit are much less common than cards with a credit limit. American Express is actually the only major card issuer that offers cards without a pre-set spending limit. Choose between personal and business cards.


Centurion Card by American Express


What are the pros and cons of using a card with no pre-set spending?


Someone who charges large amounts of money may be attracted to a credit card that has no limit.

"Someone who is a frequent traveler and needs to charge up to $10,000 in airline tickets and hotels, plus meals and other expenses, may find it difficult to use a card that has a $20,000 cap and require more flexibility," Sullivan explains.

If you own a small company and need to purchase expensive equipment or supplies on a regular basis, then a card without a limit may be the best option for you. Using the NPSL card to its full potential could be beneficial if you plan on making large purchases.

Monica Eaton is the chief executive of Fi911 & Chargebacks911, firms that manage risk and chargebacks. She says: "The more you pay back, the greater the amount the issuer will allow you to spend."

Card with no spending limit can be very valuable when you earn rewards. The American Express Platinum Card, for example, offers five points per dollar when booking flights, prepaid hotels, and direct flights with airlines through the American Express Travel Portal and the American Express Travel Portal. All other eligible purchases will earn you one point for every dollar. You can redeem Membership Rewards points for merchandise, gift cards, travel and statement credits.

These cards are a great option for large purchases, but there are some drawbacks. You don't always know what your credit limit is. It can be embarrassing if some purchases are declined.

You could be charged late fees if you don't pay your monthly balance in full. You can carry a balance on a revolving NPSL, but a high APR could make it more expensive to pay off a large purchase.

How does a card with no pre-set spending limit affect your credit score?

Credit scores are based on several factors. However, the amount you owe is one of the most significant. Credit utilization ratio is taken into consideration, which is the percentage of credit available that you are using. Credit utilization ratios of 30 percent or less are ideal.

You can track your credit utilization ratio with a traditional card with a fixed limit. Divide your total balance on your credit card by the total limit of your card, then multiply that result by 100. This will give you your credit utilization rate as a percentage.

A NPSL card does not have a limit stated on it, so your credit report will show that you have a flexible credit card. This is not included in the credit usage ratio.

What about Cards with Flexible Spending Limits?

Some cards have flexible spending limits that you can extend at any time. This benefit may be available with a personal card, but not a business one.

American Express has two cards that let you spend more than the limit.

American Express Blue Business Card Cash Card

With either card, you don't have to ask for permission to go over your limit. You can check your purchase power by logging into your account, or calling ahead.

Other card issuers such as Chase, Citibank Wells Fargo, and U.S. Bank may approve over-limit transactions based on an individual basis. It's not necessary to ask for authorization but it could be a smart idea. You could have your card issuer increase your credit limit.

Discover has different policies for transactions that could push you over your credit limit. Any purchases made with your card are blocked after you have exceeded your credit limit. Bank of America blocks any transactions that exceed your credit limit.

Should You Choose a Credit Card Without a Preset Limit?

It may seem attractive to have a credit card for personal use or a business with flexible limits or no fixed limit. It is important to know if it suits your needs better than a credit card with a fixed spending limit. Here are some of the most important things to consider when evaluating card options:

Your spending habits. Payment requirements. Fees.

Check your credit report to see if you qualify for a credit card without a spending limit. These cards are usually reserved for those with excellent credit.