How Does AmEx Credit Limits Work?

aa on 09/06/2023 - 11:21

So I have an AMEX with a low limit $2000

when I get close to that, I transfer money in and this allows me to keep spending, as do my other credit cards.

occasionally I want to make larger payments and have always overpayed the credit card so its massively in credit, but AMEX doesn't like this and then places the card on hold.

speaking to a representative today, they mentioned that the $2000 limit is a maximum monthly limit, regardless if i pay it back earlier, the limit doesn't reset until the end of the statement cycle. I've received conflicting info from various reps and can't find anything specific to AMEX but my general understanding is that the credit limit should reset once I've paid it off, and this works for my other credit cards even with large purchases.

Can someone enlighten me? Is this an AMEX thing?

Financial American Express

Comments

  • coffeeinmyveins on 09/06/2023 - 11:23
    +1

    why would you want to have a credit in your credit card? you're effectively giving them free money and you're not doing anything with it, even in a bank account you'd get 5%….

    • lgacb08 on 09/06/2023 - 14:28
      +2

      Because you can't buy anything more than $2k online with that card in one hit

      • aa on 09/06/2023 - 21:15
        +2

        yes exactly, need to pay off some furniture and would rather have the points too.

  • soan papdi on 09/06/2023 - 11:35

    That's not how a CC is meant to be used! With many VISA and MC cards, excess money on the card won't earn points. You have enough funds to top up your card on demand, so you're likely better off with something like HSBC's debit card which gives a 2% discount for taps (under $100). Alternatively ask Amex to raise your limit.

  • prisonerzero on 09/06/2023 - 11:42
    +5

    They are not giving you the right info. Paying the balance early should allow you to keep spending. Overpaying should be fine too for big purchases (e.g. to get benefit of insurance protections).

    But doing this often and in large amounts might raise red flags. You will see in Amex forums people complaining about their accounts being closed for doing this. But we're talking about putting $200k a month through on a business card with a $100k limit. I doubt they care about someone with a $2k limit putting $3k a month through the card.

  • cheapjunkie on 09/06/2023 - 11:54
    +1

    I have dealt with this from personal experience. AMEX works differently from banks so their limits are fixed per statement cycle even if you pay out the balance early. A bank issued credit card allows you to do this due to it being a financial institution. Due to AMEX not being a bank per se and handling funds directly like a bank, they do this for anti money laundering requirements.

    • aa on 09/06/2023 - 21:20

      thank you, i think this is likely the reason, still its really inconvenient.

    • Tommyaka on 10/06/2023 - 09:02

      I've had no problem with spending above my "monthly" credit limit as long as there is a sufficient amount of money/credit in my account at the time of purchase.

      I did this the other month, my remaining credit limit was around $500 and my flights were around $2,000. I simply transferred $2,000 onto my Amex card and then went on and made my purchase.

      I've been with Amex for years and have never once heard of a monthly limitation.

  • HardQuiz on 09/06/2023 - 12:03
    +2

    Why not increase your limit ?

    • aa on 09/06/2023 - 21:16

      dont want to affect my loan serviceability, need to refinance soon, but will be looking for a new card afterwards.

  • jhaley3180 on 09/06/2023 - 12:15

    I regularly pay off during my monthly period to keep under my monthly Amex limit. I've also regularly put additional on my card to make a payment larger than my credit limit.

    Never had any problems with any of this. This is with Amex issued Amex cards.

  • MrHyde on 09/06/2023 - 12:22

    I've had the issue of my Amex being put on hold when I over pay into it.

    However, never had any issue with spending more than the limit in a month. I've got $70K over my limit; but never an issue - just keep paying it down in chunks to keep it within the limit - but not over paying.

  • JIMB0 on 09/06/2023 - 12:43

    I always thought Amex cards didn't have a hard limi, as in you can owe more than the credit limit.

    • John Kimble on 09/06/2023 - 13:11
      +1

      You may be thinking of a charge card vs credit card?

      https://www.americanexpress.com/au/credit-cards/about-credit…

      • askbargain on 09/06/2023 - 13:20

        You can easily go over Amex limit.

      • Bargainitis on 09/06/2023 - 15:10

        yeah they thinking charge card.

        Even charge card has a limit. It varies depending on use and other factors. It could be $20K limit to almost millions depending on customer credit history / behaviour and hard assets.

        I had to provide my income / assets to them a long time ago as part of the process.

  • kekw on 09/06/2023 - 15:35

    might be a good idea to shop around see who can offer you higher limit.

  • Waltervp on 10/06/2023 - 10:19
    +1

    Over the years I've learned that credit limits really mean "monthly spending limit". Worse still if you top up your card before the automatic payment goes through the automatic payment still deducts the full statement balance, not just the remainder to get your card to 0 again. If my bank account didn't have enough to cover that full amount i would incur bank fees. In the end i cancelled the auto payments and got higher credit limits.

    If a higher credit limit interferes with a mortgage application you probably shouldn't get the mortgage, or perhaps lower the limit for a few months just to comply.

    Nothing is straight forward in a commercial world, they're out to get you! Can't drink on holidays without choosing travel insurance we just learned!

  • cashbackman on 23/06/2023 - 13:21

    You should ask for a higher limit so this problem goes away. How long have you had this card?

Login or Join to leave a comment
Login Join