This article was written by Odysseas Papadimitriou, CEO and founder of CardHub.com, a website that helps consumers compare credit cards.

Do credit cards with no limits sound too good to be true? Yes? Well, that’s because they are. When many people hear about No Preset Spending Limit (NPSL) credit cards, they think that these products provide unlimited spending capabilities. After all, the thinking goes, they’re for people with excellent credit and they must have some unique benefit. Besides, “No Preset Spending Limit” sounds an awful lot like there’s no spending limit. This is not the case, however, because a false sense of spending power, the potential for your card to be declined at any time and a possibly-falling credit score are the only unique things NPSL cards bring to the table. Oh, and you are most likely using an NPSL card without knowing it because Visa Signature credit cards, World MasterCard credit cards and American Express charge cards—three of the most popular choices for people with excellent credit—are all NPSL cards.

These cards are broken into two basic types: charge cards—like those from American Express—and credit/charge card hybrids—such as those offered by Visa and MasterCard. NPSL charge cards allow users to spend up to an undisclosed amount, provided they pay back any expenditure in full at the end of each month. NPSL hybrid cards have clear revolving credit limits which users are encouraged to surpass—by how much is again unknown—as long as they pay the overlimit amount in full at the end of the month. Thus, NPSL card users don’t know how much available credit they truly have at any one time and run the risk of having their cards declined unexpectedly.

NPSL cards also cause problems for your credit score as a result of the way they are reported to the major credit bureaus. According to the No Preset Spending Limit Credit Card Study conducted by CardHub.com, even though NPSL cards have actual limits on their spending, these true upper bounds of purchasing power are not reported to the credit bureaus. Instead, proxy limits are passed along because credit card companies want to maintain the myth that their NPSL cards provide unlimited spending. This might not be important if your credit cards’ limits were not relevant to your credit score. However, FICO—the largest credit scoring agency in the United States—uses credit limits to determine the balance-to-available credit ratio known as credit utilization that serves as an important aspect of their credit scoring calculations.

Each proxy limit affects credit utilization in a different way, and according to the study, there is no uniformity in how credit card companies report these faux limits. Similarly, three of the top ten card issuers in the United States—HSBC, U.S. Bank and Chase—refuse to be transparent about their specific reporting methods. As a result, an NPSL credit card can affect your credit score in unpredictable, difficult-to-manage ways, ranging from your card’s available credit being completely ignored by FICO to your FICO score taking a hit.

In light of this, consumers must exercise extreme care in NPSL card use. This starts with simply knowing which credit cards are NPSL cards—a self-awareness that many consumers lack. After this determination is made, you must determine whether your card can be used in a way that will allow you to maintain a low credit utilization ratio. If this cannot be achieved, use of an NPSL card is a risk. Ultimately, the best way to approach NPSL cards is just to avoid them. Think about it, the only supposed benefit of these cards is that they allow users to spend up to a secret limit, and their drawbacks are many. Does this sound like a product befitting your excellent credit status?