Question from a reader:
Is the fact that a limit has been set on my available amount with AMEX (American Express) because I have no credit? So far, my bank balance is fine, but could it be that I’m on the brink of a problem?

The Relationship Between AMEX’s Available Amount and Credit

Hello everyone. Today, I’d like to address a question
that has been on my mind. The question from a reader is about the limit on the available amount with AMEX (American Express). They ask, “Does this mean I have no credit? Even though my bank balance is fine, am I on the brink of a problem?” In fact, I believe many people have similar doubts, so I will explain this thoroughly.

What is AMEX’s Available Amount?

First, the available amount on a credit card like AMEX refers to the limit set by the financial institution that issued the card. For example, if your available amount is 100,000 yen, you can make purchases within that range. This available amount is generally determined based on your credit information, income, expenses, and even your card usage history. Credit card issuers check your credit information to determine whether you will be able to repay properly in the future. This includes your past credit card usage history and loan repayment status. Therefore, having a set available amount does not necessarily mean “you have no credit.” Rather, it can be seen as the card company analyzing risks and encouraging usage within a safe range.

The Relationship Between Credit Information and Available Amount

Now, what’s important here is your credit information. Credit information serves as the basis for credit card companies to evaluate your creditworthiness. Particularly noteworthy is the number known as the “credit score.” This score is calculated based on your past repayment history, borrowing situation, and even the number of new credit cards you have applied for. In fact, I also experienced having a low credit score when I first got a credit card as a student, resulting in a very low available amount. I sometimes felt anxious, wondering, “Why is it so low?” but this is a path many people go through. In short, credit information changes over time, and there is a possibility that it can eventually improve.

The Correlation Between Bank Balance and Credit

If your bank balance is fine, that’s great. However, the available amount on a credit card is not determined solely by your bank balance. Credit card companies look at the overall balance of your income and expenses, as well as your past usage, so even if you have a balance, your credit may not be sufficient, resulting in a low available amount. I have experienced this myself. When I was a university student, I worked hard to save money, but when I applied for a credit card, I was completely rejected. The reason was “insufficient credit information.” Therefore, it’s important to know that just because your bank balance is fine, it doesn’t necessarily mean your available amount will increase.

Reasons for Setting an Available Amount

Now, I understand why you might wonder, “Is the fact that an available amount has been set because I have no credit?” In reality, it’s normal to feel that having a low available amount means “I don’t have enough credit.” However, this does not necessarily mean “you have no credit.” For example, card companies like AMEX often set certain limits to prevent users from exceeding their payment capabilities. This is part of the card company’s risk management. In short, just because your available amount is low, it does not completely negate your credit.

Am I on the Brink of a Problem?

I understand the anxiety of thinking, “Am I on the brink of a problem?” However, what you should consider here is your future actions and the accumulation of credit. If you continue to make payments on time and build your usage history, the card company is likely to evaluate your credit positively and increase your available amount. In fact, I have had this experience as well. Initially, my available amount was low, but by using the card regularly and making all payments on time, my limit gradually increased. Many people go through this process and ultimately have an available amount that suits them.

Conclusion: Credit is Something That Changes

So, we have delved into the question about AMEX’s available amount, but what I ultimately want to convey is that “credit is something that changes, and it’s best not to judge based on a temporary situation.” The available amount changes based on your actions and the accumulation of credit, and it does not represent everything about you. If you feel anxious about your current situation, it’s important to first review your credit information and consider your future usage policy. And to build credit, make sure to pay on time. By doing so, your credit will gradually improve. Finally, it’s important to think carefully about your relationship with credit cards as part of your life and to build a relationship of trust. I hope you take your time, don’t rush, and nurture your credit at your own pace.