Amex Green Card

[chucky1234]

Does the Amex Green Card report as OPEN ? Does it affect ultilization?

[chucky1234]

Anybody??

[Anonymous]

Since it sounds like you'd like an answer from someone, I'll tell you what little I know.

The Amex Green card is a charge card, rather than a credit card.  Charge cards have to be paid in full each month -- credit cards do not.

THe Points Guy is generally reliable and he has a fairly clear article about it here:

http://thepointsguy.com/2016/07/how-charge-cards-affect-score/

Because I have never had a charge card, however, I cannot vouch for this article with any degree of certainty.  I can tell you that when he says that FICO used to count charge cards, but that FICO's current practice is to leave them out altogether, I assume that means that old models (like the mortgage models) may still use them in the utilization calculation, but FICO 8 and 9 do not.

This piece from Doctor of Credit may help you as well:

http://www.doctorofcredit.com/how-does-a-charge-card-affect-your-credit/

In both cases, the articles are talking about CC utilization.  It's worth observing that a charge card and a credit card both count the same with respect to certain OTHER scoring factors, such as the number of cards showing a positive balance.

Finally, if a person is ever trying to optimize his score by making most of his cards report zero, he should make sure that he has a true credit card reporting a positive balance, since otherwise his utilization might be rendered as 0%.

[Anonymous]

PS.  As a final thought, a person can solve the problem of wondering how a charge card affects his utilization by making the decision to pay off all of his CC debt completely and then, moving forward, always paying his cards in full.

After that, any time he needs a high score he just leaves one true credit card reporting $20 and pays all other cards to $0.

[Thomas_Thumb]

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@chucky1234 wrote:

Does the Amex Green Card report as OPEN ? Does it affect ultilization?

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Yes, AMEX charge cards are termed "open" accounts as opposed to revolving accounts. Credit reports and 3rd party summaries may show charge cards in an other account category or lump them in with revolving accounts. It is a bit of a mystery on how decisions are made on where/how a CRA chooses to display charge card accounts. A general practice is to list terms for charge card accounts as one month.

I would hesitate to make a sweeping statement on all charge cards counting or not counting toward utilization. Best I can tell is "it depends".

[Anonymous]

Great response by TT.

It's exactly his closing thought which I was in my own way getting at in my postscript.  From what little I have heard, there's no single good answer that would cover all charge cards at all three bureaus for every FICO model.  It's kind of a crap shoot.

Because of that, it's safest to make the most conservative assumption at any point in time.  I.e...

     * If you are hoping that the charge card will be recognized toward your utilization, assume it won't be.

     * If you are hoping that the charge card won't be counted towards your util, assume it will be.

Good news is that this isn't really a problem if a person is paying all his cards in full each month.  People who PIF don't need to worry about CC utilization in practice, since they can always achieve a 1-3% util anytime they like.

If a person is not paying in full, then the charge card is the least of his concerns.  He should be taking steps towards adopting a PIF approach for other reasons: to save himself the huge interest charges, to establish a history for himself as a "transactor" (which as we move into the next few years will become more and more important), etc.