What is a Flexible Spending Credit Card?

By Bruce Boswell •  Updated: 12/14/21 •  6 min read
Filed under: Credit Cards

It would be nice to be able to travel anywhere in the world, to eat anywhere that you can think of without wondering about the bill. I mean I’m getting excited just thinking about it, I think I’d go to Italy for some fresh pasta first or maybe a coffee in the south of France.

Unfortunately that simply is not the case for all of us. The real world has lots of limits and very little room for maneuvering those limits to fit what you want. 

What is a Flexible Spending Credit Card

Although one way you can feel as though you really are limitless to what you can and can’t do is with a flexible spending credit card. Don’t worry for those who don’t understand exactly what that is yet it’s pretty simple to understand.

With a flexible spending credit card it allows the user to spend as freely as they want.

But that of course comes with a bill at the end of the month. This article should help you fully understand what all that means and also give you some suggestions on what is the right type of credit card that suits your individual needs.

Remember, it’s good to feel limited in some cases, for example if you ate take out every night, you’d struggle to really enjoy it after a while. 

Flexible Spending

What a flexible credit card is, is a bank card that allows you to spend as freely as you want provided that at the end of the month when it’s time to pay your bill, you can afford to pay it off.

Basically without a direct spending limit you can literally book any holiday, any restaurant or anything else that springs to your mind. These cards are offered to people who are considered to be of low risk to credit card companies.

They will have a long credit history and a reliable source of income. This is something that you will need to be able to prove to even be considered for a flexible spending credit card.

They are known as NPSL credit cards which simply means no pre-set limit. However some of these cards will have a limit but it is determined by the issuer based upon how likely you are to be able to pay your bill, you may have a limit of $15,000 but if you’re deemed reliable enough you may find that you could spend $16,000. Now of course all of that sounds lovely; they do have (like anything else) their downsides.

That could be asking you to pay any charges that have resulted because of the excess spending.

However if you have to have a high amount your credit score won’t in total take a big hit because of this which you could look at as a positive in the long run, having a bad credit score can affect much of life’s necessities, for example when you’re applying for a mortgage or any type of loan or it can even affect getting a good credit card as you’ll be charged higher interest rates. 

The Best Flexible Credit Cards

Although Flexible credit cards sound like an incredible idea it is very difficult to find yourself in a position where they are made available to you. That’s not necessarily saying that you have to be a billionaire to be offered these lucrative cards, it’s imperative that you have an excellent credit score.

The cards you should be researching are the Chase Sapphire Preferred card, The capital one quicksilver cash rewards credit card and the Bank of America customized cash rewards credit card.

These are seen as the more lucrative whilst still having your best interest at heart. Although all offer their own unique benefits and negatives. These cards offer flexible spending limits often, it’s good to be aware that the card limit will vary based on the card and the user of the card. 

Try Not to Go Over Your Credit Limit

Just like regular credit cards with fixed limits, flexible credit cards also have interest rates and without the guaranteed maximum credit card companies tend to offer the flexible cards with much higher interest rates than the more standard limited credit cards.

Although flexible credit cards don’t report the same as regular credit cards your debt will be made aware to the credit bureaus, this can impact credit scores hugely and and can hinder your ability to be entitled to any sort of credit agreement, to maintain a healthy credit score it is recommended that regardless of the amount you pay your bills on the allocated date or try to make your creditors aware of any unforeseen things that could impact your ability to pay the charges that you have acquired making purchases.

In Summary 

Flexible credit cards may seem like the answer to all of your problems but unfortunately this most likely isn’t the case, with the ability to have a zero limit on what you can spend is a double edged sword.

At the end of the month you will still  be expected to pay the charges that have incurred although this may be at a higher interest rate and can most likely be in the thousands.

These cards are normally only offered to people with a long and positive credit history and with a reliable source of income. The downside of the cards is that the interest rates can be abnormally larger than on a standard credit card, the reasoning for that being that it’s more of a risk for the bank to issue these cards.

This means that the application for these cards can be very stringent with little room to maneuver. To improve your credit score you should make your payments on time with zero delays or atleast make your creditors known to the fact that you may be falling behind on your charges.

The longer you leave it the more likely you are to experience credit cards with inflated interest offered. 

Bruce BoswellBruce Boswell

Bruce Boswell

Bruce Boswell enjoys researching and writing about all things related to investing and saving money. Whenever he has a chance, Bruce loves travelling all around the world with his wife and trying new foods.