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'No preset spending limit' cards: What they are, how they work and how to get one

For the credit score elite, these cards have fewer limits.

Spending time shopping online
Andrea Piacquadio/Pexels

As many hilarious things are, the "no-limit" card was conceived of -- allegedly -- by Jerry Seinfeld. In an episode of his 2018 Netflix show Comedians in Cars Getting Coffee, Seinfeld told guest John Mulaney how things unfolded. 

"I was waiting for [the crew] to move some cameras, and the crew guy comes up to me, he says, 'You got the Black Card?' And I go 'No, what's the Black Card?' He says, 'There's only three in the world. The Sultan of Brunei has one, the president of American Express has one, and I thought you would have the third one.' Next morning I call the president of American Express. I go, 'Is there a Black Card?' He says, 'It's just a rumor. It doesn't exist.' He said, 'But you know what? It's not a bad idea.' And so they developed it, and they gave me the first one."

Whether or not that story is apocryphal, the Centurion Card from American Express*, also known as the Black Card, now exists. But it's available by invitation only -- and comes with a $5,000 annual fee and a $10,000 initiation fee. Cardholder benefits include elite status upgrades on flights, hotels and events worldwide. And there's also the 50% back in Membership Rewards as a statement credit when you use points to book any portion of a flight, access to the Centurion Lounges (which includes chef-made food, cocktails, child play spaces, showers, and spa services). Reimbursement for gym memberships and streaming services. A dedicated guide through customs on international trips. Complimentary upgrades and insurance coverage on car rentals. A personal concierge to assist in just about everything, from shopping to sorting out travel snags. The list goes on. 

But you don't need to be a sultan, CEO or celebrity to get this type of card -- and it's possible to score one without paying $15,000 in fees upfront. I applied for a different card with similar perks, The Platinum Card® from American Express, five years ago after a harrowing flight from Seattle to Indianapolis with a squirmy seven-month-old. The card has a hefty $695 annual fee (see rates and fees), but I decided after some research that the significant travel benefits would eclipse the costs. I opened an account before my return flight, upgraded to first-class with my welcome bonus and never looked back.  

(Note: The current welcome bonus on The Platinum Card from American Express is 100,000 points after spending $6,000 on purchases in the first 6 months of card membership. Terms apply.)

Sound interesting? Here's everything you need to know. 

What is a 'no-limit' card? 

First off, the "no limit" part is misleading. It's true that a no-preset-spending-limit card doesn't have a fixed limit like a traditional credit card, but there is a monthly limit based on your specific credit score and how often you pay your monthly bill on time. While writing this piece, I tested my limits by using my online account's American Express Check Spending Power tool. Since the pandemic began, I've used my Platinum Card only for smaller expenses like groceries and Hulu, so I'd never checked my spending power. After entering a few figures, I found my "unofficial" limit: A whopping $85,000. 

American Express Platinum Card's Check My Spending Power Tool

The Platinum Card's Check My Spending Power tool approves my high spending request.

American Express/CNET.

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. 

NPSL cards and credit scoring 

When I opened my Platinum Card, I assumed the new account was the reason my TransUnion, Experian and Equifax credit scores each gained 10 to 20 points. But, according to Lee, that may just have been a coincidence. "Since a charge card has no credit limit, they are typically bypassed in revolving utilization rate calculations in FICO Scores," he said.  

Credit Karma list of open accounts

Credit Karma lists my revolving accounts.

Sarah Szczypinski/CNET.

It's true. I checked my credit reports on Annualcreditreport.com (where you can get free access to your reports once a year) and found no credit-limit associated Amex account. A credit score check confirmed that my current Amex balance wasn't factored into my credit score. 

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 (like a Tesla). But where's the line? Here are some ways to protect your credit score while using a NPSL card (or any card). 

Pay off your balance each month

Although we understand the general guidelines, we don't know all the specific details about how each credit bureau calculates our scores. That noted, a 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

Sticking with the example above, if you buy a Tesla with an NPSL card and have enough cash to pay off the balance, go for it: Rack up those airline miles! But before making a large purchase, check to see if your card issuer offers an online tool like the Platinum Card 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

More credit card advice

For rates and fees of The Platinum Card from American Express, click here

*All information about the Centurion Card from American Express has been collected independently by CNET and has not been reviewed by the issuer.