No Limit Credit Cards
Advertising Disclosure
Credit-Land.com is an independent, advertising-supported web site. Credit-Land.com receives compensation from many credit card issuers whose offers appear on our site. Compensation from our advertising partners impacts how and where their products appear on our site, including, for example, the order in which they may appear within review lists. Credit-Land.com has not reviewed all available credit card offers in the marketplace.

No Limit Credit Cards

By
Add to Favorites:
No Limit Credit Cards
May
13

There is nothing new in that lots of credit card applications for good credit customers come with no pre-set limits. Almost everyone agrees that it is cool to be unrestricted in card spending and admits being happy about having a no pre-set limit plastic in his/her wallet.

One of our readers, Mr. Collins, wrote us about his experience of owning such a card and his story is sure to set credit consumers with no pre-set limit ideas on the right path.

If you have got a notice from your bank offering an upgrade from your current card to a no limit plastic, think twice before you respond to give permission.

Likely, the no pre-set limit benefit is designed to give even more of credit card convenience, one of the major factors that attract card users. Mr. Collins' story proves once again that such convenience may t cost you not only money but also your credit reputation.

Mr. Collins, a small business owner, agreed onto the upgrade to his credit card (we do not mention the issuer out of his request) and enjoyed his extended (a no pre-set limit does not mean unlimited) spending capacity for quite a while. Until he noticed a considerable drop in his credit scores.

What happened? Could it really have been possible considering the man's faultless credit card bill payments and reasonable spending?

Upon inquiry at the credit bureaus, Mr. Collins revealed that his bank did not report his monthly balances, and this, as it appears, has a ruining effect on one's credit scores.

The whole thing is about the credit card debt ratio, or credit utilization, which indicates your actual debt (balance) as apposed to the credit limit. Say, if you have a credit card with $10,000 limit and you charge $5,000 on it, your credit utilization will be 50%.

Ideally, credit card debt ratio should account for 30% of the limit available, so that your credit score stays undamaged.

With no pre-set limit credit cards, things work like this. Most of such cards do not report your balances and so credit bureaus can't calculate the credit utilization ratio, which impacts your score. All the time it appears as if you were using all of your credit available, which in fact is wrong as you are potentially unlimited in your spending.

Mr. Collins has his credit rating hurt because of such credit card practice and insists that a no pre-set limit is more a headache than anything else actually. However, our team advises the following. Do, get yourself a no pre-set limit plastic but not until you make sure it reports your highest monthly balance to the credit scoring agencies.

In this case, the highest balance will be your limit and the credit bureau will be able to calculate the credit utilization ratio on your credit card. Say if you charge $2,000 one month, it will be your limit.

Whether a no pre-set limit is actually a perk is up to you to decide. In all other respects, it is a regular credit card that requires timely and at least, minimum credit card payments and, as surprising it might sound, reasonable spending as it is not unlimited in its sense. It only gives you freedom to set your own limit, nothing more.

Add to Favorites:
Get the latest news, articles and expert advice delivered to your inbox. It's FREE.

Other Cardholder Benefits Research:

Related Research:

How to Get Free Wi-Fi in the Air

By Herbert Moore, Posted: September 28, 2016

Sometimes in-flight Wi-Fi is the bare necessity when you travel abroad or within the country. However not all airlines offer free in-flight Wi-Fi. There is only a couple of airlines that will allow you to use Wi-Fi ... Continue reading

Amazon Credit Cards Review

By Allison Martin, Posted: May 30, 2016

When Amazon.com was launched 20 years ago, few could have envisioned how far the company would come. What was once an online specialty bookstore is now an Internet juggernaut that sells nearly anything and has made major inroads into ... Continue reading

How Much Do Shell Cards Really Save on Gas?

By Allison Martin, Posted: April 20, 2016

There is an endless amount of gas cards on the market, and practically every major gas station, including Shell, has options to choose from. In fact, Shell offers two options for gas cards for consumers. Continue reading