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Amex 2nd Charge Card?

Billharrell
Regular Contributor

Amex 2nd Charge Card?

Hey all,

I currently have a personal PRG. If I add a Amex business charge card, will it increase my overall spending power, or do they just spread your existing spending power over the two charge cards?

Thanks in advance!

2/18 FICO 8's:
EX(692): 3.1yrs, 8 inq.
TU(654): 0.3yrs, 3 inq.
EQ(683): 3.1yrs, 3 inq.
Utilization: 50%

Wall of Shame (recent denials/wish list):

Message 1 of 10
9 REPLIES 9
credit_is_crack
Valued Contributor

Re: Amex 2nd Charge Card?

Amex cards come in two flavors, 'revolvers' and 'charge cards'. Charge cards are defined specifically as the platinum, gold, plum or green cards (both personal and business). I'm not 100% sure you meant adding a charge card or meant adding another credit card like the PRG. 

 

If you've reached your max credit on revolvers then Yes, Amex would pull credit from an existing revolver to approve additional revolvers. I think this is what you're referring to. 

 

Regarding charge cards though, each card will have it's own independent spending power, or soft limit. It is unrelated to any revolver limits. 

 

If you have the PRG now and add a charge card you'll be fine, but if you add a revolver (biz or personal), and you're at your amex max, then they could pull from your PRG to 'fund' the new card. 

Message 2 of 10
Billharrell
Regular Contributor

Re: Amex 2nd Charge Card?

Thanks for the reply. PRG is a charge card. I currently have (per CSR conversation) spending power of $8000 on the PRG. What I'm wondering is if I add another charge card, will it increase my overall internal limit on the now two charge cards, or will they "borrow" spending power from my PRG to feed the new card.

2/18 FICO 8's:
EX(692): 3.1yrs, 8 inq.
TU(654): 0.3yrs, 3 inq.
EQ(683): 3.1yrs, 3 inq.
Utilization: 50%

Wall of Shame (recent denials/wish list):

Message 3 of 10
credit_is_crack
Valued Contributor

Re: Amex 2nd Charge Card?


@Billharrell wrote:
Thanks for the reply. PRG is a charge card. I currently have (per CSR conversation) spending power of $8000 on the PRG. What I'm wondering is if I add another charge card, will it increase my overall internal limit on the now two charge cards, or will they "borrow" spending power from my PRG to feed the new card.

Smiley LOL my mistake. I knew PRG was a charge card but for some reason my brian processed SPG, which really threw me off so apologies for the useless explanation lol Robbing Peter to pay Paul only happens with revolvers. I'm hesitant to say "it would increase your overall internal limit" because those are modified once a month, and based on the prior 6 months payment history. 

 

From what I've learned from Amex and my personal experience, their algorithm goes something like this. It looks at the most recent 6 months individual payments on that charge card (largest single payment in a month, not grand total of all payments within a month). Let's say it is JULY currently and below are the list of largest payments for each of the prior 6 months.

 

  • JAN $500
  • FEB $3,500
  • MAR $1,500
  • APR $200
  • MAY $3,200
  • JUN $2,450

It finds the highest payment amount and multiplies it by 3. In this sample FEB was the highest so if I were to check my spending power anytime from FEB thru AUG the spending power would very likely be $10,500.

 

It is a rolling 6 month look-back. In the sample above when it became AUG, JAN would be removed from the algorithm and replaced with activity from the JUL month. The AUG 6 month look-back would be FEB thru JUL. The $10.5k 'limit' would 'stick' until one of two things happened

  • (1) a payment larger than $3,500 posted (resetting the 6 month clock), or
  • (2) no payments larger than $3,500 posted and it is now SEPT (meaning FEB is no longer part of the 6 month look-back). In case #2 it would simply re-run the algorithm again from MAR-AUG to calculate the new spending power. 

Based on this setup for each charge card, it doesn't lend itself to 'borrowing' from one charge card to another. Hope that makes sense. Took me a bit to figure it out between what I saw my cards doing and their explanations, but it did ring true for me -- YMMV. 

 

 

Message 4 of 10
Billharrell
Regular Contributor

Re: Amex 2nd Charge Card?

Great explanation, thanks for taking the time.

2/18 FICO 8's:
EX(692): 3.1yrs, 8 inq.
TU(654): 0.3yrs, 3 inq.
EQ(683): 3.1yrs, 3 inq.
Utilization: 50%

Wall of Shame (recent denials/wish list):

Message 5 of 10
BlueMystic
New Contributor

Re: Amex 2nd Charge Card?


@credit_is_crack wrote:

From what I've learned from Amex and my personal experience, their algorithm goes something like this.

 

[SNIP]


This is all very well thought out, but my question is how did you determine this part:

 


 (largest single payment in a month, not grand total of all payments within a month)

Many individuals and businesses make several smaller payments per month and don't see their spending power suffer as a result. Personally I just make one large payment every month, but this is an open question for a lot of people here so I'm just curious to hear how you came to that conclusion. Smiley Happy

Message 6 of 10
credit_is_crack
Valued Contributor

Re: Amex 2nd Charge Card?


@BlueMystic wrote:

@credit_is_crack wrote:

From what I've learned from Amex and my personal experience, their algorithm goes something like this.

 

[SNIP]


This is all very well thought out, but my question is how did you determine this part:

 


 (largest single payment in a month, not grand total of all payments within a month)

Many individuals and businesses make several smaller payments per month and don't see their spending power suffer as a result. Personally I just make one large payment every month, but this is an open question for a lot of people here so I'm just curious to hear how you came to that conclusion. Smiley Happy


Simple put, I just asked Smiley Tongue  When I first got charge cards from Amex it was one of my first questions (at that time I had a plum and gold card). Then I took note of what they said and just tested it based on my personal account activity. Once at the point of the conversation when the accounts were about 8 months old. I did 'tested' it a few months later (when my last largest payment 'rolled' off) and the spending power dropped. It matched the newest 'high balance x3'. It matched on both of my cards, well one of them rounded up to the next hundred, but that's all I did. 

 

Message 7 of 10
BlueMystic
New Contributor

Re: Amex 2nd Charge Card?


@credit_is_crack wrote:

@BlueMystic wrote:

Many individuals and businesses make several smaller payments per month and don't see their spending power suffer as a result. Personally I just make one large payment every month, but this is an open question for a lot of people here so I'm just curious to hear how you came to that conclusion. Smiley Happy


Simple put, I just asked Smiley Tongue  When I first got charge cards from Amex it was one of my first questions (at that time I had a plum and gold card). Then I took note of what they said and just tested it based on my personal account activity. Once at the point of the conversation when the accounts were about 8 months old. I did 'tested' it a few months later (when my last largest payment 'rolled' off) and the spending power dropped. It matched the newest 'high balance x3'. It matched on both of my cards, well one of them rounded up to the next hundred, but that's all I did. 

 


But you didn't say "high balance x3", you said "highest single payment x3", making sure to emphasize it was not an aggregate:

 

"largest single payment in a month, not grand total of all payments within a month"

 

So, by your logic (to give an extreme example) someone who is charging and paying $24,000 a month and making three $2,000 payments per week would only have $6,000 in spending power. And that not only doesn't match the experience of many on this forum, it also defies common sense. There's certainly much more to the algorithm than that.

Message 8 of 10
credit_is_crack
Valued Contributor

Re: Amex 2nd Charge Card?


@BlueMystic wrote:

@credit_is_crack wrote:

@BlueMystic wrote:

Many individuals and businesses make several smaller payments per month and don't see their spending power suffer as a result. Personally I just make one large payment every month, but this is an open question for a lot of people here so I'm just curious to hear how you came to that conclusion. Smiley Happy


Simple put, I just asked Smiley Tongue  When I first got charge cards from Amex it was one of my first questions (at that time I had a plum and gold card). Then I took note of what they said and just tested it based on my personal account activity. Once at the point of the conversation when the accounts were about 8 months old. I did 'tested' it a few months later (when my last largest payment 'rolled' off) and the spending power dropped. It matched the newest 'high balance x3'. It matched on both of my cards, well one of them rounded up to the next hundred, but that's all I did. 

 


But you didn't say "high balance x3", you said "highest single payment x3", making sure to emphasize it was not an aggregate:

 

"largest single payment in a month, not grand total of all payments within a month"

 

So, by your logic (to give an extreme example) someone who is charging and paying $24,000 a month and making three $2,000 payments per week would only have $6,000 in spending power. And that not only doesn't match the experience of many on this forum, it also defies common sense. There's certainly much more to the algorithm than that.


Yikes you're correct. "Highest Balance" should have been "highest payment" -- sorry for the confusion. I did make an effort to specify in my original reply that it was based on what Amex shared with me and my personal experience, and I agree, I'm sure there's much more to their algorithms than that. Luckily nobody has said "here is exactly how it works and nobody can disprove it" Smiley LOL

 

I think anyone charging $24k in a month on a card would find a different experience. The other alternative is simply call them up and ask -- that's what I did. At the end of the day I'm just sharing what I experienced, but nothing is keeping anyone from giving them a buzz and asking. 

Message 9 of 10
BlueMystic
New Contributor

Re: Amex 2nd Charge Card?


@credit_is_crack wrote:


Yikes you're correct. "Highest Balance" should have been "highest payment" -- sorry for the confusion. I did make an effort to specify in my original reply that it was based on what Amex shared with me and my personal experience, and I agree, I'm sure there's much more to their algorithms than that. Luckily nobody has said "here is exactly how it works and nobody can disprove it" Smiley LOL

The "3x largest payment of last 6 months" guideline is fairly well circulated. How true it is, I'm not sure. It's likely part of a much more complex calculation that includes income, assets, FICO, internal score, etc. etc.

 


@credit_is_crack wrote:

I think anyone charging $24k in a month on a card would find a different experience. 


Yes, given that AmEx also takes income and assets into account in the algorithm, and likely weighs them fairly heavily, that might account for those who haven't had a large bill/payment in several months but still have a very large amount of spending power.

 


@credit_is_crack wrote:

The other alternative is simply call them up and ask -- that's what I did. At the end of the day I'm just sharing what I experienced, but nothing is keeping anyone from giving them a buzz and asking. 

It seems to depend on who you get on the phone. Some will ask you for an amount to 'try' and tell you if that amount would be approved, and some will (apparently) tell you your approximate internal limit. Supposedly the "check my spending power" button will occasionally do both, e.g. "Congratulations, you are approved to spend $30,000. In fact we can approve up to $75,000 at this time." But I have never used the button.

 

Message 10 of 10
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