Happy New Year everyone! I have had my gold card for about a month now and was curious on when to pay my balance off. I have been reading up on how a charge card works with the so called no preset limit and how Amex determines how much you are allowed to spend. My question is, should I spend normal and wait for the statement to close or should I pay off the balance before the statement closes? I racked up about $10k in charges this month but freaked out because I hate seeing that type of balance and paid it off before my statement closed. By doing that will that effect my spending power with them?
@Zimmy71 wrote:Happy New Year everyone! I have had my gold card for about a month now and was curious on when to pay my balance off. I have been reading up on how a charge card works with the so called no preset limit and how Amex determines how much you are allowed to spend. My question is, should I spend normal and wait for the statement to close or should I pay off the balance before the statement closes? I racked up about $10k in charges this month but freaked out because I hate seeing that type of balance and paid it off before my statement closed. By doing that will that effect my spending power with them?
pay it off in full by the due date
if you want to pay it off early, by all means, do whatever makes you comfortable
if amex needs you to pay it off early to prevent disruption to your ability to use the card, they will let you know
@Zimmy71 wrote:I have been reading up on how a charge card works with the so called no preset limit and how Amex determines how much you are allowed to spend.
Take most of what you read with a grain of salt. Amex's algorithm for NPSL isn't public, and anything you read that states something like "average monthly spend for the past X months" is patently false. The actual number is what Amex's underwriting realistically thinks you can pay back based on "your use of the Card, your payment history, credit record and financial resources known to us, and other factors."
Paying the balance early will not affect your spending ability. There are some outliers where the ability to receive a CLI may be impacted by early payments because their automated systems only consider statement balances), but Amex is not one of those issuers.
@Zimmy71 wrote:Happy New Year everyone! I have had my gold card for about a month now and was curious on when to pay my balance off. I have been reading up on how a charge card works with the so called no preset limit and how Amex determines how much you are allowed to spend. My question is, should I spend normal and wait for the statement to close or should I pay off the balance before the statement closes? I racked up about $10k in charges this month but freaked out because I hate seeing that type of balance and paid it off before my statement closed. By doing that will that effect my spending power with them?
No it won't affect your spending power. If anything, it will increase your spending power.
@K-in-Boston wrote:
@Zimmy71 wrote:I have been reading up on how a charge card works with the so called no preset limit and how Amex determines how much you are allowed to spend.
Take most of what you read with a grain of salt. Amex's algorithm for NPSL isn't public, and anything you read that states something like "average monthly spend for the past X months" is patently false. The actual number is what Amex's underwriting realistically thinks you can pay back based on "your use of the Card, your payment history, credit record and financial resources known to us, and other factors."
Paying the balance early will not affect your spending ability. There are some outliers where the ability to receive a CLI may be impacted by early payments because their automated systems only consider statement balances), but Amex is not one of those issuers.
I'll bite. Can you name some issuers those outliers you mentioned please? I learn something new on this board every day.
@GZG wrote:
@Zimmy71 wrote:Happy New Year everyone! I have had my gold card for about a month now and was curious on when to pay my balance off. I have been reading up on how a charge card works with the so called no preset limit and how Amex determines how much you are allowed to spend. My question is, should I spend normal and wait for the statement to close or should I pay off the balance before the statement closes? I racked up about $10k in charges this month but freaked out because I hate seeing that type of balance and paid it off before my statement closed. By doing that will that effect my spending power with them?
pay it off in full by the due date
if you want to pay it off early, by all means, do whatever makes you comfortable
if amex needs you to pay it off early to prevent disruption to your ability to use the card, they will let you know
And believe me, they WILL let you know. lol
@BuckyB wrote:
@K-in-Boston wrote:
There are some outliers where the ability to receive a CLI may be impacted by early payments because their automated systems only consider statement balances), but Amex is not one of those issuers.Not to hijack the thread, but who are those issuers?
@coldworld wrote:I'll bite. Can you name some issuers those outliers you mentioned please? I learn something new on this board every day.
Off the top of my head, TD Bank and Synchrony's computers seem to treat $0 statement balances the same as non-use, even if there was activity. Capital One and Comenity have been mentioned in the past but I am not sure if that is still the case. I do know from experience that Comenity would not generate $0 statements, although credit reporting was still done.
@K-in-Boston wrote:
@BuckyB wrote:
@K-in-Boston wrote:
There are some outliers where the ability to receive a CLI may be impacted by early payments because their automated systems only consider statement balances), but Amex is not one of those issuers.Not to hijack the thread, but who are those issuers?
@coldworld wrote:I'll bite. Can you name some issuers those outliers you mentioned please? I learn something new on this board every day.
Off the top of my head, TD Bank and Synchrony's computers seem to treat $0 statement balances the same as non-use, even if there was activity. Capital One and Comenity have been mentioned in the past but I am not sure if that is still the case. I do know from experience that Comenity would not generate $0 statements, although credit reporting was still done.
That's good to know, I appreciate the follow up.