Visa signature: cross the "limit"? Bad effect on Experian report?

[Anonymous]

Hello everyone! I recently upgrade my visa platium to visa signature, but I noticed some changes in the credit report of EX and EQ.

In EQ, the credit limit is not reported, which is as expected; However, the report of EX does give a credit limit, although it says "flexible spending credit card".

So, would it be harmful to use this card across the credit limit line?

Thanks!

[FinStar]

Not sure about "harmful" effects since everyone's CR profiles are different when it comes to multiple factors, including utilization.  If you go over your assigned CL or "hard limit", even for FSLs, the CRAs will report what is referenced as High Credit/High Balance.  So, lenders will see this as far as what is reported as your highest balance on a particular TL.

[Dustink]

As long as you pay in full each month and aren't looking for a mortgage/auto loan I wouldn't worry about it.

It will raise your utilization, but other than that nothing is inherently bad. AS LONG AS YOU PAY IN FULL MONTHLY.

[Anonymous]

Thanks for your reply. Actually I am about to look for mortgage.

As you said, "it will raise my utilization". But my conern is whether there are more serious consequences, because it looks like it's "over the limit" (while actually there isn't).

[bobebob]

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@Anonymous wrote:

Thanks for your reply. Actually I am about to look for mortgage.

As you said, "it will raise my utilization". But my conern is whether there are more serious consequences, because it looks like it's "over the limit" (while actually there isn't).

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For the Visa Signature product (at least the way my BoA VS works) the highest reported balance on the account is treated as your limit.

for example:

For Util calculations, my BoA VS's "limit" is about $5100 since that was my highest balance.  The actual credit limit when I get into my account online is $17,100

If you go over your previous limit, what should happen is that your new balance will be your new credit limit for purposes of util calculation.

This may also be the case if you go  over the actual posted limit as the card is a no preset spending limit card.  If they approve the purchase over the set limit (on a case-by-case basis so they say) then that would be your new limit.  There shouldn't theoretically be a way to get a NPSL card to report "over limit".  Either they approve the higher limit purchase on your "signature" in which case they raised your limit, or they disapproved the purchase and your balnce won't reflect it. [note: at a $17,100 limit, I'm not going to test that hypothesis]

Allowing a new balance to post that is higher than your previous highest will cause your Util for that card to be %100 for that reporting cycle. 

However, once you pay the balance back down, your overall credit limit will be higher thus causing your util to be lower in the future (with the higher credit limit and assuming the same balances in the future).

That's my understanding on how my card works.  YMMV. 

[zerobacan]

But whatever you let your card report will raise your utilization negatively no matter what as the cl will not be reported and it will not be counted positively.

[Anonymous]

Thanks for your information!

Yes, my VS is also a BoA card. After my investigation, I saw that what you said is true for EQ (and I've heard that TU does things in the same way). But after I checked my EX report, things are different from them. That's what I am actually concerned.