Credit News and Advice

No pre-set spending limits explained

Many credit cards advertise “no pre-set spending” limits. But if you think you can just sign up for the card and go out and charge a Ferrari, watch out. No pre-set spending limit does not meet no credit limit. It means there is no pre-set spending limit.

The Fine Print

In fact, most no pre-set spending limit credit cards come with a credit limit. The card then gives the card holder the ability to exceed that credit limit in some instances if the amount of the balance over the credit limit is paid in full before the due date.

That means that credit cards with no pre-set spending limits will authorize each purchase on a case by case basis. Whether or not they authorize a particular transaction will depend on multiple factors including your account history, your current balance, your credit history, you income, and your financial assets.

Avoiding Your Limit

If you plan to make a big purchase on your no pre-set spending limit credit card, you may be in for a surprise, as the transaction can be declined.

To avoid an embarrassing situation, it’s best to call your credit card company prior to making any unusually large purchases or any purchases that will put you over your credit limit.

You can also negotiate a higher spending limit after using the credit card for a year or more. Your chances of getting a credit limit increase will be best if you charge a significant amount on your card each month and pay the balance in full. You’ll also need a clean credit history.

Compare and apply for no pre-set spending limit credit cards now.