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Question on Charge /Visa Signature Cards

Frequent Contributor

Question on Charge /Visa Signature Cards

If you have lets says 2 Visa Signature Cards, and 1 Amex Charge card (all are not reporting credit limits).Additionally you have an AMEX BCE reporting a limit of lets just say 500 dollars.

 

 if you keep your debt to utilization rate low 0-5%, does it matter that on your credit report that your sum of credit line being reported is only up to 500 dollars, or does your FICO only consider 4 lines of cards, the AAoA, the low ratio of utilization and available credit, and doesn't care about how much credit is being reported?

 

I see many concerned users not sure on accepting upgrades to visa signature cards or only having amex charge cards b/c of fear of no reporting of credit limits.

17 REPLIES
Moderator

Re: Question on Charge /Visa Signature Cards

FICO cares about all those things, but the revolving utilization metric only looks at your aggregate credit limit.

 

Couple of points though:

- Most Visa Sig  products these days report a limit.  

- Those that don't, will report a "high balance" and FICO will use these as your limit

- Amex charge card utilization isn't calculated in either FICO '04 or FICO '08 versions of the model

 

If I were in that hypothetical situation, take a few month approach on it.  Namely, I'd run my life through a single Visa Sig card to start, pool up cash in my bank account, to goose up the high balance, and then write a check for it when it got up to a reasonable level.   Yeah, I'd eat a few points in fractional interest, but spending a bit on interest to resolve the situation would be worth it to me personally.  This also assumes I'm not applying for anything in the next few months as I would be hurting my interstitial FICO score, but FICO has no memory of prior utilization rates, so I don't worry about that.

 

If your aggregate spend is high enough (mine isn't currently), you might be able to do it in one month, not pay any interest at all, and then repeat the cycle with sig cards 2,3,4 or whatever.

 

It's likely moot though.  If you have specific Visa Sig cards in mind, share them and it's pretty much guarunteed a bunch of folks here will know whether you have to worry about this or not as more and more are reporting limits.

 

Edit: alternative strategy for completeness: Since Amex charge cards don't get counted in the more recent versions of the FICO models (term 1 month); leave whatever balance you need for short-term float on that tradeline, and then let one of the siggy cards report the usual 1-9% balance that seems to work for most folks.

 

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Valued Contributor

Re: Question on Charge /Visa Signature Cards

With that group of cards, fico would most likely hate you, but manual reviewers would love you, so I would expect to see a lot of 7-10 day review notice messages. Probably be best to apply for a non-signature version of a card from each of your lenders just for UTL reasons. 

 

 

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Valued Contributor

Re: Question on Charge /Visa Signature Cards

+1 relevate.  Funny thing I did as relevate suggested for my Amex charge card on the off chance a lender might be using a really old fico scoring method.  Just to add a few points.  You could have 800+ fico with a couple of old 500 dollar limit cards.  Util calculations dont care about the amounts, but just the ratios.  Does that mean someone is going to trust you with 10k limit?  Nope.  I compare my example to someone getting an A in kindergarten.  They got an A but doesn't mean they are ready for astrophysics.  Same with credit.  Sure you really know how to handle 500 dollar credit cards, but no one going to trust you with 5k.  Also, op, you look at Amex charge card witH no limit reporting as negative.  I look at it as positive.  Since most ficos ignore the amounts there, you don't need to manage it as closely.

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Frequent Contributor

Re: Question on Charge /Visa Signature Cards

@Revelate or @Crashem So the high balance put on the AMEX let it post AFTER the statement cut? Let's suppose I have a 0 Balance, create a high balance one time by letting it stay until after statement cut and I have a balance that actually has a due date then PIF?

Frequent Contributor

Re: Question on Charge /Visa Signature Cards

That's for a Visa Sig, so it would report as your "limit" in case it doesn't report a limit.

What they are saying is:

-Put 1%-9% on a your Visa

-Put the rest on AMEX

 

This is because to achieve optimal FICO score, util seems to be at 9% and AMEX util isn't counted towards it.

Frequent Contributor

Re: Question on Charge /Visa Signature Cards

But is the way I said to do it with AMEX the correct way?

Frequent Contributor

Re: Question on Charge /Visa Signature Cards

Not sure what you mean about the right way though.

AMEX charge cards util are not counted, only revolvers. Since you have a Visa Sig that doesn't report limit, do you revelate said, have a high balance for a month or two, because FICO will use that balance as the limit. You can have $1 or $1,000,000 on AMEX charge card, won't make a difference for FICO score or util.

Frequent Contributor

Re: Question on Charge /Visa Signature Cards

But isn't he saying with AMEX you can do the same with a noncredit reporting VISA Sig, which is to create a high balance once or twice so that it would be considered as a limit?

Established Contributor

Re: Question on Charge /Visa Signature Cards


angelclaudio wrote:

But isn't he saying with AMEX you can do the same with a noncredit reporting VISA Sig, which is to create a high balance once or twice so that it would be considered as a limit?


Amex charge cards aren't considered in utilization, period (except for TU98).  There's no need to create a high balance, because it will almost never be looked at like a limit.  The only exception is the TU98 scoring model, but that is now very outdated and rarely used, pretty much to the point where there is no need to consider it.  But, if you really want to prepare for the possibility that a lender might use TU98, then go ahead and get a high balance on your Amex, because TU98 does use high balance for limit.

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