You may have heard of no-limit credit cards and wondered how they work. What are referred to as no-limit cards typically mean that there is not a preset spending limit, as you find with most cards. Rather, your limits may fluctuate over time, and each purchase is evaluated on a case-by-case basis for approval. As long as you are using the card responsibly and regularly paying down your balance, you shouldn’t have any problems with purchases being declined.
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Key Points
• Technically, no-limit credit cards do not exist; some cards, however, have no preset spending limit.
• Transactions are evaluated based on financial information and history, and spending limits may change.
• High income and an excellent credit score can improve approval chances.
• Maintaining a relationship with the bank can increase approval likelihood.
• Luxury credit cards often have no preset spending limits.
Do No-Limit Credit Cards Exist?
While most credit cards do come with specific credit limits, there are cards that intentionally have no preset spending limit. Those card holders never have to worry about managing their available credit. Instead, the issuer will evaluate each purchase as it’s made to determine whether to approve it. The issuer may also provide a tool where you can check beforehand to see if a purchase will be approved.
Where Does the Idea of No Limit Cards Come From?
To “average” people who stick to a budget and pay their bills each month, there is something aspirational about a magical no-limit credit card. If you have an average credit limit, you might wonder what it is like to not be encumbered with one. Pop culture plays into this common desire to know what it would be like to be obscenely rich and not have to worry about money.
The Myth of the Black Credit Card With No Limit
In pop culture, the no-limit credit card always seems to be black, and there are indeed ultra-luxury black credit cards. For example, American Express has the Centurion Card, which is a black credit card that is only available by invitation. But while the Centurion card (and other similar cards) don’t come with a preset spending limit, that doesn’t mean there is no limit at all.
Rather, purchases may be approved in real time, based on factors such as current balance and spending limit, income indicators, and size of the purchase.
Recommended: What Is a Luxury Good?
Pros and Cons of Cards With High Spending Limits
Here’s a quick overview of some pros and cons of high limit credit cards:
| Pros | Cons |
|---|---|
| More convenient to pay for larger expenses | It may be tempting to spend beyond your means |
| Harder to go over your credit limit | If your card is stolen, you may be at a higher risk before you notice |
| A high credit limit can help your credit utilization ratio, when used responsibly | A higher credit limit could mean more debt to pay down |
| A higher spending limit may allow you to earn rewards like unlimited cash back |
What Does It Take to Have a High Limit Credit Card?
Most credit card issuers use a variety of factors when deciding both whether to approve you for a credit card and what credit limit to extend. Here are a few factors that may come into play:
A Good Credit Score
Most cards that come with no preset spending limit are considered premium or luxury credit cards. That means that you will likely need good or excellent credit to be approved.
Some of the factors that build or maintain a good credit score include always paying your bills on time, having a long history of responsible credit usage, using a mix of credit products, and not making too many applications for credit in a short period of time. In addition, keeping your credit utilization ratio low is wise as that also shows that you aren’t relying too heavily on credit.
A High Income
Another factor that can help you to get a high limit on a credit card is a relatively high income. Banks generally use an applicant’s income as one factor in determining a credit limit for a card. If you have a low annual income, a bank may be hesitant to issue you a credit card with a high spending limit.
An Existing Relationship With the Bank
Many banks are interested in building a relationship with their customers, especially ones they consider to be high-value. Showing that you are a loyal customer can encourage a bank to extend you additional credit. Ways to build your relationship with a bank might include opening checking or savings accounts, taking advantage of their credit card rewards program, or responsibly using existing accounts with them.
The Takeaway
While some credit cards come without a preset spending limit, all credit cards have some limitations in place. There is no publicly available credit card that will allow you to spend and spend with no checks and balances or consequences. If you have a card with no preset spending limit, the issuer will decide on a case-by-case basis whether to approve each purchase.
Whether you're looking to build credit, apply for a new credit card, or save money with the cards you have, it's important to understand the options that are best for you. Learn more about credit cards by exploring this credit card guide.
FAQ
Is there a credit card that has no limit?
There aren’t really credit cards with no limit at all, but there are credit cards that don’t have a preset spending limit. Instead, the credit card issuer will evaluate your overall financial information to determine whether to approve any purchases. This might include your income, net worth, relationship to the bank, and previous spending and payment history.
How do people get no-limit credit cards?
Most cards that come with no preset spending limit are luxury credit cards, which means that you’ll typically need to have good or excellent credit. Having a high income is another factor that can improve your odds of being approved. You might also consider strengthening your relationship with the issuing bank, like opening a checking account or other credit cards.
What does no-limit credit card mean?
A no-limit credit card generally does not mean a credit card with absolutely no limit at all. Instead, many times people are referring to a credit card with no preset spending limit. When you have a card with no preset spending limit, you won’t have a specific available credit or credit limit. Instead, the card issuer will determine whether to approve each transaction based on your overall financial information and/or past spending history.
Photo credit: iStock/Delmaine Donson
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