topic Flexible spending credit card in Understanding FICO® Scoring

Flexible spending credit card

NhanNguyen — Sun, 18 Nov 2012 01:03:02 GMT

I got BOA flexible spending credit card.they never report CL. My question is:

If I carry balance so how much my score normally drop?

Re: Flexible spending credit card

jsucool76 — Sun, 18 Nov 2012 01:07:58 GMT

Basically...consider any balance you carry just like you would in any other card. The only difference is, you have no additional "Available Credit" from this card to count into your utilization.

One thing I have heard you can do is report a high balance on it one month to get a good "High Balance" on your reports, and under a manual review, some UWs may use this as your limit.

Re: Flexible spending credit card

llecs — Sun, 18 Nov 2012 01:12:13 GMT

I wouldn't be too concerned. It's my understanding that if there's no CL reported, then newer versions of your FICO won't even factor it into utilization. There might be an issue on the TU98 version on here, but the TU versions used most, along with EQ and EX, will ignore it. The only two considerations to think about are the number of TLs reporting a balance and overall balance totals.

Re: Flexible spending credit card

TrishN — Sun, 18 Nov 2012 01:17:48 GMT

Is it better t downgrade for them to report credit limit?

Re: Flexible spending credit card

jsucool76 — Sun, 18 Nov 2012 01:37:15 GMT

TrishN wrote:
Is it better t downgrade for them to report credit limit?

I would say no. The benefits of a visa sig/ world MC imho are worth it. Plus the NPSL feature of your card comes in handy sometimes.

Re: Flexible spending credit card

HiLine — Sun, 18 Nov 2012 02:09:31 GMT

Having a Visa signature will not help your utilization unless you intentionally stack a high balance for once. However, a Visa signature is a very reputable card. Under manual review, underwriters know that the limit on the card is at least 5,000, and that the credit quality of the borrower is at least very good.

Re: Flexible spending credit card

Revelate — Sun, 18 Nov 2012 05:08:26 GMT

llecs wrote:
I wouldn't be too concerned. It's my understanding that if there's no CL reported, then newer versions of your FICO won't even factor it into utilization. There might be an issue on the TU98 version on here, but the TU versions used most, along with EQ and EX, will ignore it. The only two considerations to think about are the number of TLs reporting a balance and overall balance totals.

Could you enlighten me what the source is on that? The common non-counting for utilization is on charge cards which are term one-month under FICO '04 / '08, not FSA's to my knowledge; the traditional method of scoring any sort of FSA was high balance vs. current balance is my understanding of it (and admittedly it might have changed) which lead to the old wisdom of simply running one's entire financial life through the card while keeping the money you would've paid in either cash or payments in a slush fund... and then writing the check (or electronic funds transfer these days) for the balance on the card when it's close to max.

Edit: I suppose that's easily testable by anyone with access to a newer FICO model by simply letting a large amount report for any given month and seeing whether it made a difference or not.

Re: Flexible spending credit card

llecs — Sun, 18 Nov 2012 06:00:17 GMT

I figured it would be like an Amex charge, where a balances shows but no CL. Only TU98 factored that in. Certainly could be wrong though.

OP, you can always cross-check with your FICO report if util is listed as a pos/neg reason.

Re: Flexible spending credit card

my-own-fico — Sat, 15 Dec 2012 19:19:41 GMT

llecs wrote:
It's my understanding that if there's no CL reported, then newer versions of your FICO won't even factor it into utilization.

I have a card, also Bank of America, whose Largest past balance is reported and whose Credit limit is not. The Account type is Revolving, and the Descriptions field says Flexible spending credit card. The Ratio of your revolving balances to your credit limits in a myFICO report shows that EQ uses that card for util.

A balance increase on that card for that report made the overall util go up from 2% to 14%, while the score decreased by only 3 points. But perhaps it's not the actual FICO formula commenting on the util, maybe it's simply a parallel layer of educational guesses which may include stuff such as the score simulator.

That jump in util by the way crosses the often suggested cutoffs of 9% and 10% (and much more, including the 0% baseline and other zero stuff), which given the few points supports that something else is going on. So it would appear that OP's question is far from easy to answer.

Re: Flexible spending credit card

youngman1234 — Mon, 19 Nov 2012 14:35:00 GMT

How does the NPSL feature work with BOA I got a cash rewards sig card 10k limit, will it allow me charge 20k if I pay in full the 10k I'm over limit ???

Re: Flexible spending credit card

jsucool76 — Tue, 20 Nov 2012 11:41:34 GMT

Any amount over the limit needs to be PIF on that due date. The amount they let you go over your limit is up to them. If you're going to make a large purchase over your limit I would call up and see if they'll approve it.

Re: Flexible spending credit card

kekrre — Tue, 27 Nov 2012 13:31:00 GMT

HiLine wrote:
Having a Visa signature will not help your utilization unless you intentionally stack a high balance for once. However, a Visa signature is a very reputable card. Under manual review, underwriters know that the limit on the card is at least 5,000, and that the credit quality of the borrower is at least very good.

Plus they can always (manual or otherwise) factor in any debt from your flexible spending credit card into your overall debt:income ratio (although this should hopefully not be significant).

Now what would be interesting is if somebody managed to get a large transaction to post (in some excess of the credit limit) on a Signature/World card that didn't report CL to the bureaus. My understanding is you are meeting your obligations if you PIF the amount in excess of your credit limit after it posts. OTOH, if they ever decide to start posting the limit, you'll have a high balance higher than your CL, but a) I think systems will recognize the flexible spending credit card and b) I had a high balance of 10% and 3% in excess of my CL on the two cards I had when I applied for a CSP (~10% util at the time, of course) and they didn't seem to mind.