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New Member
Posts: 8
Registered: ‎08-18-2010
0

Charge card versus credit card

My wife and I recently boosted our FICO scores above 700. In an attempt  to raise our scores to the mid 700s, it occurred to us, because we use Amex extensively to gain points for trips, that as a charge card with no limit, the FICO model sees our spending pattern as maximizing the utilization (78%)of that account. Although we pay it in full monthly (range of 4-5K) without a credit limit the FICO model uses the highest previous balance as a limit. Would we better off to reduce our monthly charges to less then 50% ( perhaps 2K) or ask Amex to convert it into a credit card with a credit line of perhaps 10K? Which would be best for our FICO scores?

Starting score TU 612 Current 691 Goal 750
Starting score EQ 617 Current 730 Goal 750
Starting score EX 629 Current 744 Goal 750
Moderator Emeritus
Posts: 16,381
Registered: ‎03-12-2007
0

Re: Charge card versus credit card

Welcome to the forums!

 

Do you folks have any CCs (Visa, MC, store or gas)?

Credit Profile - FICO 08 Scores (03-26-2015): EQ 814, EX 817, TU 822
All three scores were 850. Lost points for not having an open installment TL. So, BE WARNED!!!!!
Credit History: 27 years ~ AAoA: 13 years ~ Util: 1% ~ Inqs: TU 1


Credit Cards: Amex BCP ~ Amex Clear ~ Amex Platinum ~ Barclay Ring World Mastercard ~ Chase Freedom Signature Visa ~ CITI Dividend World Mastercard ~ FIA Fidelity Investment Platinum Visa ~ First Hawaiian Bank Gold Visa
New Member
Posts: 8
Registered: ‎08-18-2010
0

Re: Charge card versus credit card

Yes we have all of those CCs.

Starting score TU 612 Current 691 Goal 750
Starting score EQ 617 Current 730 Goal 750
Starting score EX 629 Current 744 Goal 750
Epic Contributor
Posts: 28,806
Registered: ‎10-23-2007
0

Re: Charge card versus credit card

If I'm not mistaken only some versions of TU fico scoring actually calculate the amex charge card incorrectly making you look maxed out but EQ and EX do not calculate your balance into util so you are completely fine charging on it.

Moderator Emeritus
Posts: 16,381
Registered: ‎03-12-2007
0

Re: Charge card versus credit card

True! Amex has changed how they're reporting the highest balance. They're reporting your "average" highest balance. Its my understanding that they are taking the average of your last 12-18 months of charges (not necessarily your statement balances). So, if you spend more, your "average" highest balance will increase. If you spend less like I have, your "average" highest balance will decrease. My highest balance in the past was over 12K, now its closer to 3K. 

 

As for your questions on Amex charge cards and how their util can affect scores, it pretty straightforward. EQ and EX do not factor Amex charge cards in FICO util scoring calculations. TU might or might not, it  depends on which TU FICO scoring model is being used. The TU FICO that can be purchased in these forums is TU 98 and this model does factor in Amex charge cards in its util scoring calculations. TU 04 does not factor in Amex charge cards in util scoring calculations.

 

If this is doable, here is my advice to you. I would stop charging about 5-6 days before your statement cuts, and PIF your bill a few days before your statement cuts. Keep doing this for as long as you have the card. For FICO scoring purposes, you can always leave a balance of a few dollars on one of your revolving cards, and have all of your other cards reporting a $0 balance along with your Amex charge card reporting a $0 balance. I believe this will net you the max util scoring points. It certainly worked for me. All of my scores are over 800. 

Credit Profile - FICO 08 Scores (03-26-2015): EQ 814, EX 817, TU 822
All three scores were 850. Lost points for not having an open installment TL. So, BE WARNED!!!!!
Credit History: 27 years ~ AAoA: 13 years ~ Util: 1% ~ Inqs: TU 1


Credit Cards: Amex BCP ~ Amex Clear ~ Amex Platinum ~ Barclay Ring World Mastercard ~ Chase Freedom Signature Visa ~ CITI Dividend World Mastercard ~ FIA Fidelity Investment Platinum Visa ~ First Hawaiian Bank Gold Visa
New Member
Posts: 8
Registered: ‎08-18-2010
0

Re: Charge card versus credit card

Thank you for the advice. Joining this forum has been a real eye opener and and a real source of  expertise re: FICO scores even (or especially) after talking to CS reps from Privavcy Matters 123, Credit Keeper, Trans Union and the Consumer Credit Counseling Service.

Starting score TU 612 Current 691 Goal 750
Starting score EQ 617 Current 730 Goal 750
Starting score EX 629 Current 744 Goal 750

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