When people hear of a no preset spending limit card, or NPSL card, they may think that means the card offers unlimited spending potential. However, that’s not the case.
NPSL cards are a type of American Express card that have higher spending ceilings than most other credit cards -- but they’re not unlimited. It’s just not explicitly spelled out how much you’re able to spend. Instead, how much you can spend each month is determined by factors including your income, credit score, what purchases you’re making and how often you’re making them.
What is a ‘no-limit’ card?
It’s true that an NPSL card doesn’t have a fixed limit like a traditional credit card, but these cards do have monthly limits.
“No preset spending limit” really means that your spending limit is flexible. Unlike a traditional card with a set limit, the amount you can spend adapts based on factors such as your credit score, payment history and the types of purchases you make.
There’s a good reason American Express gives its NPSL cardholders so much room to run: Qualifying for an account typically requires good to excellent credit and an above-average income.
According to Tommy Lee, a FICO principal scientist, there are two types of NPSL accounts: open and revolving. An open card, sometimes referred to by the credit bureaus as a charge card, “typically has no preset spending limit and requires you to pay the balance in full each month,” Lee said. A revolving account acts more like a traditional card, allowing you to carry a balance from month to month and pay over time.
So there’s actually a limit?
Officially, yes, NPSL cards have limits. But they aren’t typically disclosed. In theory, your card may get declined if you spend thousands on a single purchase -- but maybe not. While a typical credit card limit maxes out around $25,000, NPSL card limits are much higher. But there are no fees for exceeding a credit limit, since you likely won’t even know what it is.
Who is a no preset limit card good for?
Anyone who has regular high expenses, like from traveling frequently or business, may benefit from a no preset spending limit card. Typically, the more you spend with an NPSL card and regularly pay off, the more the card issuer will let you charge. Depending on which card you have, it could offer rewards for pricey purchases you’re frequently making, which could help lower your monthly expenses.
Who should avoid cards with no preset limits?
If you don’t have to make large purchases regularly, you probably don’t need an NPSL card. And if you can’t pay your balance in full each month, you should steer away from these cards. Since the card limit is often much higher than traditional cards, that could mean hundreds to thousands in interest for carrying a balance -- not to mention late fees and penalty APRs. Missing a payment could also affect your credit score and affect how much you’re able to spend with the card.
If you’re easily enticed into spending on purchases you might not need, a card with no preset spending limit could be a risky move.
NPSL cards and credit scoring
Your NPSL card likely won’t contribute to your credit score the same way a standard credit card will. One of the many factors that makes up your credit score is credit utilization, or how much of your total available credit you’re using. Since an NPSL card doesn’t have a set credit limit, it won’t be included in your total available credit. What will affect your credit score, however, is your payment history and the amount of debt you carry on the card.
How to protect your credit score when using an NPSL card
Even though the balance on your NPSL card isn’t included in your credit score’s utilization ratio, it can still make an impact. “The amount of debt owed is considered by the FICO Score and charge card balances can factor into these calculations,” Lee said. “Furthermore, the payment history and length of time you’ve had the account are also considered, so paying your charge card balances as agreed is extremely important.”
Although your balance isn’t technically factored into the math of utilization, FICO could lower your score if you make an expensive purchase.
How to use an NPSL card
If you’re making large purchases because you own a business or travel frequently, having an NPSL card could be useful. However, it’s still important to use it responsibly and to not get enticed into spending outside of your budget.
Pay off your balance each month
Although there are general guidelines, the specific details about how each credit bureau calculates our scores aren’t disclosed. That noted, an NPSL card should not be used as a bottomless bank account. Spend only what you can afford and pay off the balance at the end of every month. This will help you stay within your budget and avoid racking up debt with accruing interest.
Check your spending power
Before making a large purchase, check to see if your card issuer offers an online tool to check your spending limit, or call customer service and ask them to approve a large purchase verbally. Reaching out ahead of time could safeguard your score from an unnecessary ding.
NPSL cards to consider
Currently, American Express is the primary issuer for cards with no set spending limit. If you’re eligible, consider choosing one of the cards listed below:
- The Platinum Card® from American Express: A high-end travel card with plenty of card perks.
- The Business Platinum Card® from American Express: For business owners who travel all the time.
- American Express® Gold Card: Great for travelers who love to eat out or cook while on the road.
- American Express® Business Gold Card: For business owners who travel and cook or eat out.
- American Express® Green Card: For travelers looking for a few extra traveling perks.
- Business Green Rewards Card from American Express*: For the traveling business owner who doesn’t want to spend too much on an annual fee.
- The Plum Card® from American Express: An interesting -- yet not overly valuable -- option for business owners.
- Centurion® Card from American Express*: Also known as the Black Card, you generally need to be invited to apply for this high-end card, which offers concierge service and other perks, though existing Amex members may be able to request to apply.
The bottom line
NPSL cards can be great for people who regularly have high expenses, as long as you can pay the balance off in full each month. No preset spending limit cards also have higher qualification requirements, which typically means unless you have good to excellent credit with an above-average income, you may not qualify. But if you can, they could be a good way to earn rewards for high expenses. Use the card responsibly -- meaning don’t overspend and pay off your balance in full -- and you shouldn’t have any issues.
More credit card advice
- Best Cash-Back Credit Cards
- Best Business Credit Cards
- Best Student Credit Cards
- Best No-Balance-Transfer-Fee Credit Card
- Best Airline Credit Cards
*All information about the Business Green Rewards Card from American Express and the Centurion Card from American Express has been collected independently by CNET and has not been reviewed by the issuer.
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