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CL vs pre-set spending limit

Frequent Contributor

CL vs pre-set spending limit

Is your card a "World" MasterCard?  A Chase World MasterCard has a no pre-set spending limit, but does have a "credit access line." 

 

ETA:  Chase World MasterCards and Signature Visa cards generally do not report credit limits.  Instead, the "Highest past balance" is usually reported. 

Message Edited by psychic on 02-22-2009 03:58 PM
 If you get one of these cards with a pre-set limit ~ it doesn't report a credit limit on your CR's.  So does this mean if you only have two cards 1) with a credit limit of lets say 1000.00 and 2) a credit access line of 2000.00 and your maxed out on both .... It will show on your overall a credit limit of 1000.00 and your balance as 3000.00?  That's not good ~ so what is the benefit of having a access line of credit? 
Thanks, Veee
 
Myfico scores as of 11/12/08 TU 750 EX 722

MyFico scores as of 9/20/08 TU 638 EX 663 EQ 691
Message 1 of 7
6 REPLIES
Moderator Emeritus

Re: CL vs pre-set spending limit


Veee wrote: 

If you get one of these cards with a pre-set limit ~ it doesn't report a credit limit on your CR's.  So does this mean if you only have two cards 1) with a credit limit of lets say 1000.00 and 2) a credit access line of 2000.00 and your maxed out on both .... It will show on your overall a credit limit of 1000.00 and your balance as 3000.00?  That's not good ~ so what is the benefit of having a access line of credit? 


In your example, the individual would have one credit card showing a credit limit of $1000, and the credit access line card would show a Highest past balance (used instead of a credit limit) of $2000.  The total overall credit would be $3000. 

 

Generally, no pre-set spending limit cards do not have "Over-the-Credit-Limit fees."  That is one benefit of these types of accounts. 

EQ 814 / TU 815 / EX 842
Message 2 of 7
Valued Contributor

Re: CL vs pre-set spending limit

No pre-set spending limit cards like this have a revolving CL (just what it says...that "limit" balance can revolve over time).  You can charge over that CL, but the excess is due in full at the next payment due date, along with any fees, etc.

 

The highest ever balance is what's reported on your CR.  This can be misleading when it comes to figuring utilization of your credit accounts, as this card may look maxed out, even if it's not even close.

 

Some people have gamed that 'high balance reporting as credit limit' situation by purchasing something expensive (near to the credit limit), waiting a few days and then returning it for full credit.  I'm not sure if that is a successful strategy or not as a workaround for this anomaly in credit limit reporting.

 

And some of these cards are now rethinking the fees for the over-the-credit-limit scenario.  I believe Wells Fargo is removing that benefit when it converts Wachovia Signature card accounts. 

Message 3 of 7
Frequent Contributor

Re: CL vs pre-set spending limit

The highest ever balance is what's reported on your CR.  This can be misleading when it comes to figuring utilization of your credit accounts, as this card may look maxed out, even if it's not even close.

 

that's what I'm talking about ~ thanks for the responses I was just curious.

 

Veee

Myfico scores as of 11/12/08 TU 750 EX 722

MyFico scores as of 9/20/08 TU 638 EX 663 EQ 691
Message 4 of 7
Valued Contributor

Re: CL vs pre-set spending limit

You're welcome.

 

Having several of these types of cards can really skew a utilization % for the worse.  I've declined an offer or two just for this very reason.

 

Knowledge is power, and I learned about that reporting anomaly on these boards.  Thanks, all! 

Message 5 of 7
Frequent Contributor

Re: CL vs pre-set spending limit

That's why I asked here ~ it was actually a credit card my bf was looking into, I didn't like what I was reading so I came here ... it's wonderful to have this place!

 

Happy Friday all,

 

Veee

Myfico scores as of 11/12/08 TU 750 EX 722

MyFico scores as of 9/20/08 TU 638 EX 663 EQ 691
Message 6 of 7
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Regular Contributor

Re: CL vs pre-set spending limit


Veee wrote:

That's why I asked here ~ it was actually a credit card my bf was looking into, I didn't like what I was reading so I came here ... it's wonderful to have this place!

 

Happy Friday all,

 

Veee


 

usually, signature cards are considered for their prestige. i belive that except for the flex spending feature, a siggy card is  just another revolving card. they do not report a limit and they can really mess up your utilization.  I personally stayed away from these cards.

Message 7 of 7