- 1 wiseGEEK: What is a No-Limit Credit Card?
- 2 Why to Ask For a Credit Card Limit Increase, Even If You May Not Need It
- 3 Best Business Credit Cards With No Preset Spending Limit
- 4 INFINIA Credit Card with NO SPENDING LIMITS
- 5 Tim Westwood accidentally gives out credit card with ‘no limit’ details on Snapchat
wiseGEEK: What is a No-Limit Credit Card?
A no-limit credit card is one with no spending cap on it, provided you pay your bills in a timely fashion. American Express or Amex is probably the best known of the credit cards to offer no spending limitations. When they first did so, borrowers were expected to pay their full balances at the end of each month. Now Amex frequently allows for flexible payments, and they may limit spending if payments are not adequate.
A number of credit card companies now offer a no-limit credit card to people with near perfect credit and with significant amounts of income. This can be a blessing or a curse depending on interest rate, and on how wisely you use credit. On the one hand, a huge unexpected expense can be easily met with a no-limit credit card. Conversely, you can rack up huge bills with profligate and reckless spending, in a very short period of time.
Another disadvantage to this type of credit card may not be apparent to most people, but it is something noted by organizations like The Motley Fool. which is expert in many issues of finance and investment. Part of your credit score, about 30%, considers the amount of money you have borrowed, and the limit on your present credit cards. A no-limit credit card company may report your limit as $0 if you have not used the card, or they may report a maximum limit available to you. They may not, nor are they obligated, to report times when you put tons of expenses on a credit card and then paid them off.
While some companies will report your timely payments and paid off amounts, others simply report an extremely low limit. For instance if you spent $100 US Dollars (USD), your limit might be considered $100 USD, or it may merely be reported as zero. You’ll need to check with a credit card company on how they report payments and limits on a credit card with no limit before you obtain one. Some people who are scrupulous are paying off their cards at the end of each month suffer major losses to their credit score, without even realizing it, if their spending ability is rated at zero, or their payments don’t count toward showing credit worthiness .
There are some other reasons why a no-limit credit card might not be your best bet, though there are some good reasons to have one too. You might not want a no-limit card if you do have trouble paying your bills or if you pay a higher interest rate for unlimited purchasing power. Of course, it may make sense to have one, especially for a business, if you conduct the majority of your business on credit, paying the balance at the end of each month. It makes for fairly easy accounting, and can help you spend more as needed, if your business grows.
Why to Ask For a Credit Card Limit Increase, Even If You May Not Need It
If you’re using more than half of your limit on your credit card every month—and paying it off with no problems—it may be worth asking your issuer for an increase. Why? Because a bigger limit could boost your credit score as long as you maintain the same level of spending.
Your original limit is based on your credit score when you opened the account and on the limits you have on other credit cards. “It tends to be a hard formula,” says Bill McCracken, president of Phoenix Synergistics, a marketing research firm for the financial services industry. “(Issuers) plug in some numbers on credit history, available credit, what you have been approved for beforehand and a number spits out.”
At that point, issuers are less receptive to any requests for an increase, McCracken says. So, if you’re unhappy with the limit, sit tight. If you make timely payments, your issuer will automatically increase your limit between 15% and 20%, 12 to 18 months after you opened the account, says McCracken, along with possible annual automatic increases after that.
Your best bet for getting an increase approved
If your credit card limit is still not as high as you’d like—even after automatic increases from your issuer—then you can request a larger one. Your request has a better chance of being approved if you have a mature account and you’ve made on-time payments, whether they’re minimum payments or the entire balance. It’s even better if these payments make it to the issuer a few days before the due date, says McCracken. That will show the issuer that you’re a consistent early payer and it may be more open to a limit increase.
Have a specific amount in mind and a reason for your request—such as a future big purchase—when you ask your issuer for an increase. You can change your mind and forgo the large purchase, but the new, larger limit will be set. Otherwise, the issuer may fall back on its 15% to 20% increase if you don’t request a specific amount. “The issuer won’t triple your limit but they can do a 50% bump,” McCracken says.
How an increase affects your credit
Issuers often can grant smaller increases without any additional steps. But larger ones that exceed the automatic increases may require a credit check, says John Ulzheimer, credit expert who formerly worked at FICO and Equifax. “They are basically underwriting the card again,” he says. “Because you are asking for terms that are completely different than what you originally had.” This is considered a hard credit inquiry since you initiated the request for more credit. That means your credit score will likely take a slight hit following your request. But in the long run, your credit score could benefit from the limit increase, provided that your spending doesn’t increase as well.
That’s because a larger limit will lower your utilization rate, the percentage of your available credit that you use. The lower that rate is, the better. For instance, if you regularly charge $500 on a card with a $1,000 limit, then your utilization rate is 50%. But if your limit increases to $2,000, then your utilization rate immediately drops to 25%. It’s recommended to keep your utilization rate below 30% to help your credit score.
“This is actually a longer-term strategy that people employ to help their credit score,” says Ulzheimer. “They ask for increases in credit limits and keep their spending levels the same.”
Of course, if you start charging more with your new limit, your score won’t move or go down if you spend too much. You also have a larger outstanding balance to pay off.
You might be able to avoid a hard credit inquiry if you ask your issuer for a slightly bigger increase soon after you were granted an automatic one. In that case, your issuer may have conducted a soft credit inquiry—one that doesn’t affect your credit score—as part of its regular account review and won’t need another check to approve the increase.
Otherwise, avoid asking for a hike if you plan to apply for a mortgage or auto loan in the near future. A ding to your credit score, even a small one, could be enough to warrant a higher interest rate on those loans. Also avoid requesting credit limit increases from all your issuers at once because each will pull your credit, hurting your credit score even more.
You can also request a decrease in your credit limit. Your issuer won’t pull your credit report for the reduction, but the decrease could raise your utilization rate and hurt your credit score, if you don’t also reduce how much you charge on the card. On the plus side, you will still be able to build a credit history with the card, but with less risk of piling on too much debt.
A decrease may be best for someone with limited income who is just starting out with a credit card and doesn’t want the temptation posed by a relatively high limit. “Maybe when someone is younger with a part-time job or going to school, a (smaller limit) provides a bit of an emergency brake on spending,” says McCracken.
Best Business Credit Cards With No Preset Spending Limit
Because business expenses can vary widely from day to day, business owners often require a card that can adjust seamlessly with their needs. Charge cards can do that. Unlike regular business credit cards, they have no preset spending limit, but their balances almost always have to be paid in full every month. Plenty of cards cater to businesses, but the Nerds have found a few that stand out:
For power over payment: The Plum Card® from American Express OPEN
The Plum Card® from American Express OPEN turns the traditional premise of charge cards on its head by giving you the option to either pay your bill in full or defer a portion of it for up to 60 days. Each month, cardholders can:
Pay later with no penalty: Cardholders can defer a portion of their bill for up to 60 days by making at least the minimum monthly payment by the due date. With no interest or fees (if the balance is eventually paid in full), this essentially gives businesses owners a free 60-day credit line.
Pay early and get a discount: If you choose to make at least the minimum payment on your bill within 10 days of your statement’s closing date, you’ll receive 1.5% of that payment as a credit on the next month’s statement. For example: If your total bill is $1,000 and you pay $100 within the 10-day window, your next bill will be reduced by $1.50.
Paying your bill on time but outside the 10-day window results in no added drawback or benefit.
These options let business owners decide what to do with their money each month. If business is good, and you can afford to pay your card balance within the discount period, you’ll pay less on the next bill. If business is a little sluggish, and cash is better spent on operating costs, you can pay a small portion of what’s owed and cover the rest the next month.
With a $0 for the first year, then $250, new cardholders can decide whether this card is the best option for their needs before committing to an annual fee.
For flexible rewards: The Business Gold Rewards Card from American Express OPEN
Businesses spend heavily in different areas, and that’s why the The Business Gold Rewards Card from American Express OPEN lets users decide which category will earn the most rewards.
Choose your 3X rewards category
Cardholders can choose to earn a hefty 3 Membership Rewards points per dollar spent on one of these categories:
- Airfare (directly from airlines)
- U.S. purchases on select advertising
- U.S. purchases on gas
- U.S. purchases on shipping
- U.S. purchases on computers (hardware, software, and cloud-computing services)
Spending on the remaining four categories will earn 2 points per dollar, with all other purchases earning 1 point per dollar. (The 3X and 2X earnings categories are good for up to $100,000 a year in spending per category, netting an unlimited 1 point per dollar thereafter.) This level of flexibility makes the The Business Gold Rewards Card from American Express OPEN a premier option for businesses looking to earn the maximum number of points on the areas where they spend the most.
Nerd Note: Cardholders must choose their 3X category during the first two months of card ownership. After that, you can change your category only once during the annual selection period (Dec. 1–Jan. 31 each year).
Membership Rewards points can be redeemed for a variety of travel options, gift cards, or simply a statement credit, so you’ll have little trouble finding a use for your points. If you’re new to the card, there’s a bonus: Welcome Offer: Earn 50,000 Membership Rewards® points after you spend $5,000 in purchases on the Card within your first 3 months of Card Membership. Terms Apply.
This card’s $0 for the first year, then $175. Considering its customizable 3X points category, that should be a fairly low fee threshold to overcome after the first year.
For frequent travelers: The Business Platinum® Card from American Express OPEN
If your work calls for frequent flying and lengthy layovers, The Business Platinum® Card from American Express OPEN can make travel slightly less taxing with some of the best airport amenities around, such as:
Airport lounge access: This card offers free access to the AmEx Global Lounge Collection that includes 1,000 lounges worldwide and could help make the time in an airport terminal more bearable.
Speed through security: Getting through security can be a breeze, as cardholders receive a $100 credit for Global Entry enrollment or $85 toward TSA PreCheck every five years. You’ll have to apply and pay the fee, but as long as you do it with your card, it will be covered.
Airline fee credit: An additional $200 annual credit for airline fees (checked bags, change fees, in-flight refreshments) makes The Business Platinum® Card from American Express OPEN an ideal choice for those looking to travel as comfortably as possible. Just be sure to select which airline you’d like the credit to apply toward before charging.
No foreign transaction fee: Forget paying foreign transaction fees — this card comes without added charges when swiping abroad.
As for earning rewards, this card offers 1 Membership Rewards point per dollar spent on most purchases and 5 points per dollar spent on flights and prepaid hotels booked through the American Express Travel website. Individual purchases of $5,000 or more earn 1.5 points per dollar. Points can be redeemed directly for travel through AmEx’s travel platform, or even transferred to the participating frequent-flier programs of your choice.
You’ll even start off with a generous sign-up bonus: Earn 50,000 Membership Rewards® points after you spend $10,000 and an extra 25,000 points after you spend an additional $10,000 all on qualifying purchases within your first 3 months of Card Membership. Terms Apply.. Keep in mind that the annual fee is $450. But if you’re the type of frequent traveler who will benefit most from this card, that fee can be easily offset by the many statement credits available for purchases you’re bound to make anyway.
If your business needs to spend without a preset ceiling, getting a charge card is the way to go. Just be sure to find one that molds to your custom spending habits and business style.
Kevin Cash is a staff writer covering credit cards and consumer credit for NerdWallet. Follow him on Google+.
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Tim Westwood accidentally gives out credit card with ‘no limit’ details on Snapchat
Capital Xtra DJ Tim Westwood sent his limitless bank details out to all of his followers on Snapchat by mistake.
The rap DJ was meant to send his money details over to his love interest ahead of a date coming up the following week, but has been left red-faced after sending them across to his fans instead.
On the offending upload there was a picture of his card, with text next to it which read: ‘Baby looking forward taking you to dinner on Thursday.
‘I appreciate you may wanna get nails, hair and a wax. Even some new shoes or a clutch bag.
‘Use my card it’s black with private banking so there’s no limit ( but don’t be buying a new car lol).’
He could also be heard talking in the video clip that went with it, saying: ‘Hey baby, this is for you. Looking forward to Thursday girl.’
A post shared by Tim Westwood (@timwestwoodtv) on May 18, 2017 at 8:19am PDT
Once the star had realised his faux pas he was quick to take to social media to announce his woes.
He wrote: ‘So f***** up! Accidentally Snapchat my credit cards, Had 186 screen grabs! Now I’m in Bermuda with no credit cards. Guess I got a lot of 419 Boys on my snap. #scammers#Imsneakingoutofthehotelonmonday.’
A post shared by Tim Westwood (@timwestwoodtv) on Jun 23, 2017 at 1:34pm PDT
Liam Payne is 'open' to having another baby with girlfriend Cheryl
Not only did he face losing money, but he is also paying the price online too, as his followers are making time to mock his mistake.
While some are completely bemused by the situation, others are highly amused and thus ripping him to shreds.
One fan asked: ‘How do u accidentally do that?’, while another mocked, ‘Dumbest thing I’ve heard all day @timwestwoodtv #finnessing101’
Another said: ‘Man’s still making mistakes 60 year olds shouldn’t be allowed online.’
This was shortly followed by: ‘Westwood was supposed to send this to his ting [sic] but accidentally uploaded it to his story for the nation to see I am f******dead.’
A post shared by Tim Westwood (@timwestwoodtv) on May 16, 2017 at 2:10pm PDT
However, one fan was much more sympathetic towards Westwood than most and wrote: ‘There are opportunists everywhere.’