Amex imposed spending limit

[Anonymous]

So I just got an email from Amex that they have imposed a spending limit on my platinum account, which previously had no limit. I don't particularly mind, it's not a big deal-- I have other cards with high limits that I can use if I need, but I'm just not familiar with this-- will they start to report a limit on my credit report, or is this like an internal limit? And, did they choose to do this for some particular reason, and will they lift it, etc? Thanks!

[Open123]

No won't report, but based on their "internal" risk models.  Basically, decided by their computer algorithms.

[Anonymous]

It's an internal limit, and you actually already had one. No preset limit does not mean unlimited. All charge card holders have some kind of limit, which varies by profile and spending pattern.

[Anonymous]

Ok. Well. Actually, I would prefer to always know what my limit is anyway. So this is good. But my email told me what my limit is, but my account doesn't seem to show it online. Not a big deal. It is interesting though because my spending limit is not as high as I've spent before-- was I just spending too much perhaps and they got nervous? Like I said, I actually do prefer to know instead of always wondering, but I simply have no idea how they calculated it.

[Skye12329]

You can check hour limit by clicking 'check spending ability' a hard limit will not show online. The thing about the spending limit is that it can change whenever it wants. So one day you could be approved for 30k and the next day only 20k.

[Anonymous]

Thats crazy! Is the amount close to your other cards limits?

Wonder how bad it would look with amex if I went on there and checked my spending ability on my 2 credit cards and then my charge card.

[Anonymous]

Recent large changes in your card usage (Amex and non-Amex; Amex regularly softpulls) could be the cause. Not a biggie, if you maintain low utilization. Amex will eventually relax the limit as it adjusts to your spending patterns.

Another possibility is some baddies (and/or old ones updating) and/or overly stressing your credit profile, such as frequent high utilization / maxing out cards (~75%+).

If this is an Amex charge card (or you have another one which is), and are often using the pay over time option for purchases instead of paying in full, that can lead to account review / stricter limits.

On the bright side, use this as an opportunity to diversify your cards well across different issuers, if you haven't already, and scrutinize your credit reports and spending patterns.

[Open123]

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@Anonymous wrote:
Ok. Well. Actually, I would prefer to always know what my limit is anyway. So this is good. But my email told me what my limit is, but my account doesn't seem to show it online. Not a big deal. It is interesting though because my spending limit is not as high as I've spent before-- was I just spending too much perhaps and they got nervous? Like I said, I actually do prefer to know instead of always wondering, but I simply have no idea how they calculated it.

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According to their internal risk metrics, it's prudent to place a hard limit on your Platinum.  Not sure if it makes them "nervous," but it does appear, rightly or wrongly, they want to reduce risk on your account.  It is unusual for a Charge card to have a hard limit.

[Anonymous]

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@Open123 wrote:

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@Anonymous wrote:
Ok. Well. Actually, I would prefer to always know what my limit is anyway. So this is good. But my email told me what my limit is, but my account doesn't seem to show it online. Not a big deal. It is interesting though because my spending limit is not as high as I've spent before-- was I just spending too much perhaps and they got nervous? Like I said, I actually do prefer to know instead of always wondering, but I simply have no idea how they calculated it.

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According to their internal risk metrics, it's prudent to place a hard limit on your Platinum.  Not sure if it makes them "nervous," but it does appear, rightly or wrongly, they want to reduce risk on your account.  It is unusual for a Charge card to have a hard limit.

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I just want more info for data points. LIke amount of utilization, credit scores, and how much spending we are talking about. It sounds like there may be some really high purchases along with other high amounts on other credit cards. Whatever the case, I don't know if I want to get the same email.

[Open123]

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@Anonymous wrote:

I just want more info for data points. LIke amount of utilization, credit scores, and how much spending we are talking about. It sounds like there may be some really high purchases along with other high amounts on other credit cards. Whatever the case, I don't know if I want to get the same email.

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When it comes to NPSL, Amex does this better than anyone else.  Their internal risk models (not infallible) are incredibly accurate when it comes to the NPSL set for each cardmember.

While no one except for Amex knows how the NPSL decided, I'd surmise it's based on a combination of the following:  (1) income; (2) assets known to them; (3) spend and payment patterns; and, (4) amount charged and PAID with other creditors.  With the data, from their end, they'll take a rolling 6 month average of charges, and multiply that by 2X, 3X, or whatever multiple they find appropriate to comprise the NPSL.  It's never a hard limit; not even their Revolvers are "hard" limits.  If you charge way above it, they may speak with you before deciding to approve the charge.

Unless there's some significant deviation from your historical charging patters, I doubt you'd receive this email or have a hard limit imposed.