Originally Posted by
dcpatti
The no preset spending limit can actually work against your credit score, depending on how they report to the credit bureaus. Often, your limit as reported equals your balance at the close of the reporting period, so you're always at 100% utilization on that card.
That's not how this works. A credit card would still have a credit limit, but they will let you go over it temporarily, so that might mess with your credit score the month you're over 100%, but it would be fine the next month. They won't allow you to carry a balance above your limit, so you have to pay it down. I've never made use of such a feature, but a couple cards I have offer it and I've read the T&C and also seen that I definitely have a credit limit (and it gets reported correctly).
Charge cards like the Amex ones don't have a limit, so it's typical that your highest-ever balance is treated as your credit limit. Some credit cards offer it, apparently to compete for customers who would otherwise want an Amex charge card.