Beware Credit Cards That Do Not Report Your Credit Limit to Credit Bureaus
Most credit cards report several pieces of information to the three credit bureaus: Your payment history, your current balance, and your card’s credit limit. That last one is important because a big part of your credit score is based upon how much of your total available credit you use. Unfortunately, some credit cards do not report your credit limit. Carrying a balance on these cards could lower your credit score.
Why a Reported Credit Limit Is Important
In yesterday’s post about why closing old credit card accounts can hurt your credit score, I talked about the importance of your debt utilization ratio to your credit score. Achieving a low utilization score contributes to a better credit score, but getting that ratio depends upon your credit cards reporting your credit limits to the three credit bureaus (Expieran, Equifax, and TransUnion).
When your credit card company does not report your credit limit, even a small balance on that card can raise your utilization ratio and lower your credit score.
What Credit Card Companies Do Instead
When a credit card company does not report your credit limit, they may instead report your high balance. That is the highest balance you have had on that card in a certain time period. That high balance becomes your credit limit for the purposes of credit scoring.
So if you made a big purchase on your credit card (say $2,000) one month, paid it off, and then regularly only charge a few hundred dollars to that credit card, your utilization ratio will be okay. But if you routinely make a few hundred dollars in monthly purchases and never exceed that amount—that credit card account could appear maxed out on your credit report (even if you pay it in full each month!) That’s not good.
Which Credit Cards Do This?
I can’t provide a comprehensive list of all credit cards that don’t report your credit limits, but I do know of a few. American Express charge cards, for example, don’t have credit limits. They report your high balance instead. This also holds true for many “no pre-set spending limit” credit cards. I have the Citi PremierPass card which also does this, to my dismay.
I have also heard rumors that Capital One cards do not report credit limits, although I have seen the limit report correctly on my credit report for a Capital One account.
Has This Happened to You?
Do you know of other credit cards that do not report your credit limit to the credit bureaus? Let us know what they are! Want to ditch a credit card that’s doing this to you and find a new one? Compare hundreds of cards at CreditCards.com now »
Related Posts
- More About Closing Credit Card Accounts and Your FICO Score
- How Credit Card Usage Impacts Your Credit Score
- Q&A: How Can I Close Credit Card Accounts Without Hurting My Credit Score?
- Q&A: Will My Credit Score Go Down if a Credit Card Company Closes My Account for Non-use?
- Does Your Debit Card Have a Daily Spending Limit?
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What's your take on this story? Have a related question or comment? Share it now in a comment:
Hi David,
Thank you for providing some insight on how credit card limits interact with credit scores. I just went through a similar situation with my credit card [linked above]. It seems like credit cards companies are mischievous and the perks of using them, don’t out way the cost. When I get out of debt, I might stop using them all together.
-Dan Malone-
Dont get a bank of america credit card. Egregiously, they do not report your credit limit if your credit limit is over a certain amount: this makes no sense to me at all.
I had a credit card for years with a 4,250 credit limit on it, paid it down to 0 in May 2008. Aspire closed the account in November 2008, then tried to charge me $85 annual fee. I contacted them and told them you cannot charge an annual fee on a card you have closed. After many calls, they reversed those charges.
On my credit report it shows that my credit limit was $185, not the $4250 it was when the account was closed, also stating that the account was closed by me (which it wasn’t), along with taking 5 years of excellent payment history. So, on my credit report it says that my credit limit was $185 with a highest balance of $3456.
I have contacted them and they refuse to correct the inaccurate information. They said the information would not impact my credit score. I tried to explain to them that in fact it would…because as it stands now, creditors will look at that account, see a credit limit of $185 and a highest balance of over $3000 which means that I am not responsible in not going over my “limit.”
Please tell me how to fix this. I have ALL of the documentation from them when the account was closed, my last billing stating $0 balance with $4250 credit limit, the backing out of the annual fee, and their letter stating THEY were closing the account.
Please help.
I just ran a credit report and found that Chase Visa Signature and Citibank (American Airlines Mastercard) do not report the credit limit. Chase reports my high balance and Citi none at all.
My Chase Visa Signature United card only reports the high balance, as you mentioned my AMEX Platinum does the same thing. My Diners Club MasterCard does not even report any information at all to the 3 credit bureaus. My Bank Of America NFL card does report the credit limit, as does my USAA Credit Card, as does my Discover Open Roads credit card.
Citi Aadvantage Platinum is the same story. Citit Aadvantage Bronze is the on you have to downgrade to in order for you to have a ’set limit’ instead of ‘revolving’ card – which would be reported. This downgrade would make me lose certain benefits – like going to the lounge…
UGH!
My Chase Visa Signature reports highest balance only.
In a day and age where credit scores have become so important, it seems incredible to me that the companies are allowed to adversely affect people’s scores in this way.
This may be the more conservative approach to this system but a good rule of thumb is to simply only get credit cards from companies backed by a bank you’ve heard of. Chase, Citi, BofA, etc…
These banks have too much to lose to try and employ these kinds of deceptive practices on a regular basis. If you can’t get approved for a card at one of these places then it is likely that you should not have a credit card right now.
It is true that the cards that have no preset limit do not report your limit to the Credit Bureaus. But we all need to understand what the idea behind not reporting to Credit Bureaus is? With cards that have a limit, if you ever go over your limit, it would be reported to the Credit Bureaus as a negative reporting since you are over your limit. No preset cards allow you to charge without placing a limit on the account. So that whether you charge 5k, 10k or more, it still shows that you are within “the limits” that you have been authorized by bank. In addition to that the no preset cards do not have a over limit fees which is usually around $39.00. That is why it is important to educate ourselves. It is always easy to blame the system or someone else. Instead of blaming, if we learn the system, we can use it to our benefit. I think that Mr. David Weliver is doing a great favor by creating this page but I think an educational page should have both, the cons and pros and allow the reader to make that educational decision.