topic Re: AMEX no credit limit in Credit Cards

AMEX no credit limit

Aznmomma2 — Sun, 13 May 2012 19:12:56 GMT

From US News

"Cards With No Limit. Some credit cards come with absolutely no listed limit, which at first may seem like a good thing. In reality, those credit card companies aren't reporting a credit limit to the credit bureaus and so the bureaus assumed it was $0 for their calculations. This would make your credit utilization artificially higher, which hurts your score. If the only credit card you had was one of these limitless credit cards, your credit utilization would be infinite."

Well this is the case with my Green AMEX card - is there anything I can do about this?

Re: AMEX no credit limit

Anonymous — Sun, 13 May 2012 19:56:32 GMT

Charge cards, like Amex, that don't report limits are not factored into your utilization, save for the old TU98 FICO that is still being sold here. That model factors it for utilization using the high balance in place of a credit limit. There's really no need to worry. It can actually be beneficial, you can let huge balances post and not worry about your utilization going sky high.

Re: AMEX no credit limit

cashnocredit — Mon, 14 May 2012 03:25:52 GMT

@Anonymous wrote:
Charge cards, like Amex, that don't report limits are not factored into your utilization, save for the old TU98 FICO that is still being sold here. That model factors it for utilization using the high balance in place of a credit limit. There's really no need to worry. It can actually be beneficial, you can let huge balances post and not worry about your utilization going sky high.

I can state with certainty that posting a very large balance does not affect EQ FICO scores. Been there done that.

Re: AMEX no credit limit

Revelate — Mon, 14 May 2012 03:39:26 GMT

It's more problematic with Visa Signature and World MC cards, not all of which actually report a limit. FICO does include those in your utilization, and does so by measuring your current balance vs. your high balance to generate a utilization number.

The solution to this is to just run your cards up to the max and then pay them off... which is pretty easy to do on a 1-2K card, but gets progressively harder on a high limit card unless your monthly spend is pretty high to begin with in order to limit the time you're getting hit with the interest rate after the grace period expires for your charges. Note this also assumes that you're living within your income means, and that you're simply delaying paying and saving the unspent money up in the bank to write a check for the balance once it's been maxxed. This strategy would fail horribly if you can't pay it off readily.

Not really anything else you can do it except wait for the industry to come to you: more and more lenders seem to be unilaterally reporting limits, which is in all ways a good thing. From a pure FICO perspective, I never want any card which doesn't report it's full CL; however, even for me if the reward percentages made sense with my expense pattern, FICO would absolutely be secondary.