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NPSL cards were introduced a few years ago to provide consumers with a single “hybrid” card that combines the features of a credit card (where you can charge up to an established credit limit and either pay off the balance or make minimum monthly payments) with a charge card that carries no established credit limit, but the balance must be paid in full each month.
Convenience, along with generous rewards points programs, concierge services, purchase protection, extended product warranty and other features have made NPSL cards some of the most popular credit cards available to high credit scoring — low risk — consumers. However, card issuers have been notoriously inconsistent in their reporting of NPSL accounts to the credit bureaus, and as such, with these cards comes the uncertainty of not knowing just how your credit scores will be impacted if you were to apply for a NPSL card, or are upgraded to one from an existing card.
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Other than the effects of late payments, which strongly impact any credit account under any scoring system, the biggest credit scoring concerns with NPSL cards tend to be related to credit utilization: the percentage of available credit that is being used. And depending on how the account is being reported, a NPSL card may or may not be included in utilization at all.
[Free Resource: Check your credit score and report card for free before applying for a credit card]
With this lack of credit reporting consistency, consumers simply do not have enough information to expect a NPSL to either help or hurt their credit scores; although, some general rules of thumb about the impacts of credit utilization on NPSL cards can be applied:
In short, if you are fortunate enough to have a high credit score with low or no credit card debt, an NPSL card can provide many benefits and might be the perfect card for you. Otherwise, it’s probably best just to steer clear entirely.
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