Are unlimited credit cards unlimited?

Unlimited credit is the dream of many consumers. Currently, the closest option is the credit card with no pre-established limit. With it, the approval of your purchases will depend on the information that the bank has about your income. To get this type of card, it is important to have a good relationship with the bank. Who hasn’t dreamed of being able to shop without worrying about their account balance or card limit? Passing on credit for that more expensive product, but knowing you will have money to pay for the next month is a problem for those who do not have a high limit on the card.

At these times, it is normal to think about asking for a higher credit margin or dreaming of an unlimited credit card.  Although not really unlimited, these cards usually provide some advantages, such as VIP tickets to events and discounts at concerts, cinemas and theaters.

In addition, unlimited cards have the possibility to exchange miles for various products, such as travel insurance and airline tickets. Of course, none of this comes for free, and typically the annual fee for this type of card is pretty high.  The difference between a card with no limit and a card with a high limit lies in the prior definition of the credit available to the customer. Therefore, on cards with no predetermined limit, customers can use credit at will.

Cards with high limits, despite allowing large expenses, still have a predetermined value. Both types of cards are only offered to a few customers, who fit the income and background desired by financial institutions. Finally, there is also the possibility for the customer to request the card with no or high limits. In this way, the financial institution checks the history of the customer’s income and may or may not grant the card.

There are several advantages and disadvantages to having a premium credit card with no preset spending limit, which are summarized for you below:

Pros

Convenience of having no preset limit on your spending

Extensive rewards program, with points redeemable for many items and services

Potential to save some money through use of complimentary card services such as a concierge service and insurance benefits

 

Cons

No preset spending limit can encourage some people to spend beyond their means and incur hefty interest payments

Higher interest rates and annual fees than most credit cards

Customers may not use all the included services and rewards