Credit limit is a sensitive topic and so i haven’t gone through in detail on this part in most of my article. However, here’s something extraordinary that i felt worth sharing. Most of you might know that American Express Gold card is a charge card with no preset spending limit.
However, as discussed earlier in 5 things you must know about Amex Gold Charge card, it does have an internal limit/credit support placed on the account which changes dynamically every single month based on your previous spend/repayment pattern.
Finding the Internal limit: I’ve been wondering how big the internal limit of a charge card can get and one day i was surprised to know the number. When i called up Amex customer care lastly to inquire about the credit support available on my card, i was said that i’m good to go with a charge of Rs.20 Lakhs. Incredible!
What’s the maximum Limit? I’ve heard limits like 50 Lakhs or so on Amex Platinum Charge card as quite normal, but for a normal person with Amex Gold charge card, its really high as the eligibility for Gold card is less than half of Amex Plat Charge Card.
If Amex Platinum Charge card was allowed to charge 3 Crores as mentioned by the Amex Centurion cardholder, i guess limits like even 1 Crore (let’s say) on Amex Gold Card maybe possible. But hey, its a charge card, hence you need to clear your bill at the end of the month.
Increasing Internal Limit on Amex Charge Cards:
While i don’t use Amex Gold card often due to the low default reward rate, i tend to use it when i need high credit line, which if i charged on my other cards would max out my limit and would end up in bad credit utilization ratio. And, going with multiple cards for a single purchase due to limit issues is another not so nice process.
I still remember using 3 Credit+debit cards to swipe for a single purchase at croma 5 yrs back in time. Charge cards are very helpful in such situations. Also, more transactions means higher possibility of getting a annual fee waiver, hence its no brainer to hold charge cards.
How’s the Internal Limit on Amex Charge Cards Calculated?
As my Gold charge card account has a pretty decent credit support, i tried to decode the formula as to how my limit was decided. I did the math and this is what i found (approx) :
- Internal Limit = 3 X (Spends in past 1 yr) + Other Factors (CIBIL score & its data, repayment gap, card age, etc)
Ideally, the internal limit is very much higher than what you’ve spent on the card, in the range of 2x-3x of spends, atleast in my case. Hence, Amex Gold card is one of the must have cards in your wallet if you’re looking for high credit line in short duration. You may Apply for Amex Gold Card here.
Update – Sep 2018: It now allows me to charge 30 Lakhs. Crazy! 🙂
Do you have such high imaginary credit limits on your credit/charge cards? If so, how much was that? Feel free to share in comments below.