Is it considered AA to have a NPSL AMEX given a set limit?

[Anonymous]

Is it really bad to get a set limit on a AMEX charge card? Is it like a version of AA?

This morning my PRG was given a set limit of 7400$. Not sure where that number factors in at. I have had higher utilization then normal lately overall @ 40% for the last month so I would understand.

I only ask because the limit is really nice in comparison to my other lines of credit and I didnt even know I could charge that much on it at one time in the first place. Currently my highest limit is my Capital One QS with 2,750$. I just started building my credit in January of this year.

I was just wondering if it was AA, is there anything I should do? I plan on getting my utilization back under 9% in the next couple of months after the holidays but I really like my AMEX cards and if I spooked them is there a set of rules I should follow to unspook them or should I just go on with business as usually and they'll figure it out eventually.

Also does anyone know if it will it report as having a credit limit and factor into utilization?

Here are my other accounts...

AMEX BCE 2000 | AMEX ED 1000 | Chase Amazon 2000 | Capitalone QS 2750 | 1FBUSA 500 | Merrick Bank 600 | Wellsfargo Cashwise 1000 | Victoria Secret (Comenity) 1850 | Wayfair (Comenity) 1900 | Walmart (Synchrony) 6000 | Amazon (Synchrony) 5000

Thank you for any responses it is truly appreciated

[Anonymous]

It is an internal limit between you and Amex so it won't affect your FICO as a regular credit card would. 

How were you made aware of the limit btw? 

[Anonymous]

This morning they emailed me a notice of account change and said that the limit was 7400$.

I wasn't sure if it was AA or not because the email didnt really come across that way and the limit was well above anything currently in my credit profile in general.

[Anonymous]

Don't believe it's AA. Search here for "Amex hard limit" for other threads on it like this one: http://ficoforums.myfico.com/t5/Credit-Cards/American-Express-PRG-Hard-Limit-Still-There-but-Increas...

[Anonymous]

I would say that yes, it is a form of AA since most people with Amex charge cards do not have hard limits. But they left you with a healthy $7,400 so that doesn't sound too terrible unless you were used to spending $10K+ each month. 

Technically, since the PRG is an Open (not revolving) account, there was no preset limit before and it will not report a limit to the credit bureaus. The $7400 is just an internal ceiling for your account.

Had you ever used that tool online that would show you how much you'd be able to charge on the account? Its called Check Spending Power. If you never did, then you really don't know what your max spending limit was prior to this change. For all you know, it could have always been round $7,400 and now they are just letting you know that this is your new ceiling. 

In the past I had only ever heard of people with scandalous credit that somehow got approved for the ZYNC card getting $500 hard limits from the very beginning. The major drawback to that (besides the toy limit) was that the card could not be upgraded while the hard limit was in place. This would only effect you if you wanted to upgrade your PRG to Platinum. 

[UncleB]

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@Anonymous wrote:
Is it really bad to get a set limit on a AMEX charge card? Is it like a version of AA?

@Anonymous morning my PRG was given a set limit of 7400$. Not sure where that number factors in at. I have had higher utilization then normal lately overall @ 40% for the last month so I would understand.

I only ask because the limit is really nice in comparison to my other lines of credit and I didnt even know I could charge that much on it at one time in the first place. Currently my highest limit is my Capital One QS with 2,750$. I just started building my credit in January of this year.

I was just wondering if it was AA, is there anything I should do? I plan on getting my utilization back under 9% in the next couple of months after the holidays but I really like my AMEX cards and if I spooked them is there a set of rules I should follow to unspook them or should I just go on with business as usually and they'll figure it out eventually.

Also does anyone know if it will it report as having a credit limit and factor into utilization?

Here are my other accounts...

AMEX BCE 2000 | AMEX ED 1000 | Chase Amazon 2000 | Capitalone QS 2750 | 1FBUSA 500 | Merrick Bank 600 | Wellsfargo Cashwise 1000 | Victoria Secret (Comenity) 1850 | Wayfair (Comenity) 1900 | Walmart (Synchrony) 6000 | Amazon (Synchrony) 5000

Thank you for any responses it is truly appreciated

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They have left you with a generous spending cap relative to your other cards but having a 'hard limit' placed on a NPSL card with Amex does meet the definition of AA - specifically they are taking action that adds a restriction to your account.

In the past when we've seen this it was because something had 'spooked' Amex; it could be a returned payment, a slow payment, or a change in someone's credit score or utilization.  You specifically mention that your utilization has taken a recent increase, so that could be what's driving their behavior.

Another thought is that a contributing factor might be your age of credit; you mention you started building your credit back in January of this year which is still less than a year.  It's possible that this combined with your utilization got their attention.  You don't mention your EX score, but that would also likely come into play here; with a weak score they will have more reason to take note of things that might otherwise go unnoticed.

All of this is speculation, though... if you really want to know, give them a call.  They should be able to tell you what the concern is, and how you can have the spending cap removed.

Good luck, and let us know how it turns out! 

[Anonymous]

Thanks Everyone!!!

ABCD2199 - Thanks for the link It was nice to see another situation similiar to mine. I tried to search it but didnt really come up with much.

CO_NATIVE - Okay cool! It would have been nice if it did report just for utilization purposes but that would make sense because it is listed differently on the reports.

I did use the check your spending power but it was always for WAY smaller amounts. I'd check it anytime I was going to spend more than 300$ on it at one time. I never thought about upgrade potential being hindered thats good to keep in mind. I wasn't planning on getting a Platinum anytime soon so at least that wont affect me.

UncleB - Yep, my AAOA is only 10 months currently. That with the utilization has to be what triggered it. My updated score is 684 this month and when I app'd it was 703 so that also might have been a contributing factor. I just figured that it didnt matter much because the drop was solely from utilization and the score goes back up after utilization is dropped back down.

I don't think I'll call them though. The limit isnt bad at all. I've never charged for than 2k in a month before and thats only when I was studying abroad. If they ever take it off at least I know about where's the limit is. If I charged more it might have been a issue but for now its nice to know how much I can actually spend w/o checking.

Thanks again for everyone who responded! I really do appreciate it!!!

[Anonymous]

Increased utilization is a red flag for many lenders. Remember that delinquencies are rising for all lenders so they're more likely to watch and restrict.

FICO dings folks for anywhere from 5 points up to 100 points based on utilization because it's an indicator of having trouble paying.

[601flyguy]

I dont think the hard limit on amex npsl cards should be considered AA since everyone has a hard limit that coincides with their relationship with Amex. I talked to a rep when i reached my limit and he said that my account looked great but thats just what the system feels comfortable with as far as a total balance. He went on to say how much my limit has grown in 8 months. From 3k to 6, 9, 12, and currently 15k. Thats alot of spend in 5 months lol. Even still i do not believe its a true hard limit since once reached, i was still able to use the card for gas and other small purchases.

[Anonymous]

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@601flyguy wrote:
I dont think the hard limit on amex npsl cards should be considered AA since everyone has a hard limit that coincides with their relationship with Amex. I talked to a rep when i reached my limit and he said that my account looked great but thats just what the system feels comfortable with as far as a total balance. He went on to say how much my limit has grown in 8 months. From 3k to 6, 9, 12, and currently 15k. Thats alot of spend in 5 months lol. Even still i do not believe its a true hard limit since once reached, i was still able to use the card for gas and other small purchases.

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Well, there isn't a real thing called AA, just a term used to mean some reduction of "goodness" of some type, ranging from say a small CLD to outright closure (and prosecution for fraud I guess!).   It could cover stuff which I don't know happens, like an issuer down-grading a VS to a Platinum without a CLD..

But in any case, giving a precise hard limit on a charge card will fit most people's definition of AA, just because it usually happens when Amex thinks there is an issue.   Yes, all cards have a (dynamic) hard limit at any time, but when Amex goes the extra step to tell you that the card no longer has a NPSL, it's not good or neutral.

Again though, the terminology doesn't seem that critical:  OP should be more concerned about whether this has any important impact.   With the high hard limit, it appears not, and as it is not public, other issuers won't be aware of this.   My only concern would be to understand why Amex did this, in case there is stuff on the credit report (correct or incorrect) that might worry other lenders.