ddallas

I'd take your time then with meeting spend. Use the card for everything. If you add up your utilities, insurance, groceries, anything you can pay with a credit card, and then add the money you will spend in Europe over a couple months you should be able to meet spend easily.

hayzel7773

I recently got my Amex Plat and tried charging it 50k for a Four Seasons stay. It was declined and I called them and they said they need to research it. On my annual application, I understated my annual income by almost 300k, will that be a problem?

flyershmlyer

Lol, no.

GUWonder

On the Amex site/app, you can click on "check spending power" and see what it says to avoid surprises like that. That a charge is declined can be indicative of a problem with your Amex account, but it also could be a function of what Amex thinks it should allow you to spend despite no pre-set spending limit. The factors Amex uses to determine spending power varies by factors including reported income.

Understated income can result in Amex deciding to decline some purchases when its algorithms indicate that your ability to pay the charges don't align with your stated income/assets.

mikesyr18

I have an AMEX charge card and I have no idea why they have "no preset spending limit." Surely they could just tell me and then increase it over time instead of hiding their "internal limit" with me, no?

mia

The limit isn't "a" number. Your limit depends, in part, on what you are buying and on recent information that American Express has from your credit reports and other sources. Keeping the limit unspecified allows them to shut you down any time, and requiring payment of the entire balance in one cycle allows them to initiate collection action much sooner than with a credit card.

mikesyr18

They could theoretically do that with any card, whether that's a revolver or a charge card. I've had cards declined despite being under the limit before, although that was for fraud blocking purposes.

There isn't really a reason to shut a card down immediately unless someone is attempting to charge an $18,000 TV to their card when their average transaction is $12. The limit is predetermined and flexible, but that surely could be updated in real time on the website and app based on the information they pull. If AMEX only wants you to charge $2,800 in one month, they could just tell us that, agreed? It would definitely save embarrassing card declines at the register after someone has already exhausted their two "spending power" checks that day.

joe_miami

The average Amex customer probably doesn't check spending ability once per year. This is a non-issue.

Also, shutting down a credit card typically doesn't accelerate the balance due.

mikesyr18

It's a non-issue because most of their cards are now revolvers. Yes there's a spending power button for revolvers, but it's only used if one wants to go over their credit limit.
Besides PRG, Green, Plat, and Centurion, the rest have a pre-determined limit.

For the average consumer? They most likely prefer cards with a preset spending limit. Us credit card folks prefer to maximize benefits so we're more willing to accept the downfall of NSPL. I have three revolvers an a charge card, and I can say I prefer using the revolvers.

In my opinion AMEX revolvers are charge cards posing as credit cards. The limit is soft, even if there's a "set" limit and if you carry a high balance for a few months, prepare for a FR.

Kacee

They're better. The balance doesn't count against your aggregate credit limit for purpose of calculating utilization. Yet, with pay over time feature, they can be used to carry a balance, just like a credit card.

That's a pretty significant overstatement. AMEX wants to loan many of its customers money. They're offering personal loans, and just introduced a new product on the charge cards (at least on Surpass) which allows you to make installment purchases. In normal circumstances, it would take much more than simply carrying a high balance for a few months to draw a financial review.

mikesyr18

Disagree. I can't tell you how many threads I've read about people getting an FR for using their entire credit limit and then carrying that balance for a few months. AMEX hates small payments in combination with large balances.
Personal loans, within itself, are a different type of product... They aren't secured by a revolving line of credit, you pay them down over time, and then when it's paid off, more money isn't taken out. The balance doesn't go up and down.

AMEX expects a personal loan to carry a high balance for the number of months stated in the agreement unless you're using one of their balance carrying features. AMEX does not like large balances carried on their revolving cards. If you carry a balance for a month or two, AMEX will want you to make large payments to reduce the balance quickly.

Kacee

That's the worst kind of unreliable hearsay. By definition, you are hearing only from people who (i) had problems, and (ii) are on FT. Totally meaningless in terms of discerning AMEX's broader business practices.

joe_miami

And it just seems so inefficient. Why wouldn't Amex simply be tougher at the underwriting stage? Why let the money go out the door and then check the person's finances?

txflyer77

It may well be *more* efficient. If their approval process spits out the correct answer 98% of the time, manually reconciling the incorrect 2% may well be cheaper than making the process longer or more intrusive for the other 98%.

(Numbers pulled from thin air, of course)

If Amex assumes that:

a) virtually all customers are close enough to truthful on their applications
b) they can adequately model the risk of an individual customer based on credit reports, answers on the application and whatever other data sources they have
c) the potential losses of lending to unworthy customers is less than the lost revenue from denying a worthy customer
d) there aren't that many FlyerTalkers

Then it might make perfect sense to limit the hardcore background checks to just that tiny pool of customers that later trip your alarms and avoid ticking off everyone else.

joe_miami

How would it be "ticking off everyone else" to simply be more conservative with credit limits if that's what the underwriting tells them? It simply makes no sense to let people spend big money and then try to make sure they have the money. If Amex didn't want people to carry a balance for more than a couple months, it wouldn't be in the CC business — it would just issue the original charge cards.