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Regular Contributor
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Are charge cards considered credit cards?

I was looking at the FICO algorithm and comparing it to my current credit profile.  I see that FICO is more forgiving on thin credit files with 6+ credit cards versus 3-5.  I, however, only have 5 credit cards and 4 charge cards.  Are charge cards considered credit cards according to FICO or are they not taken into consideration?

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Re: Are charge cards considered credit cards?

 

Yes, both credit cards and charge cards are considered to be revolving credit.    However FICO scoring doesn't include the balance on charge cards in your revolving utilization calculations.

March2010 FICO® ~ 695 TU, 653 EQ, 697 EX
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Re: Are charge cards considered credit cards?


pizzadude wrote:

 

Yes, both credit cards and charge cards are considered to be revolving credit.    However FICO scoring doesn't include the balance on charge cards in your revolving utilization calculations.


Would a Visa Signature (or Flexible Spending Credit Card) be considered a charge card then?

 

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Re: Are charge cards considered credit cards?


Drew wrote:

Would a Visa Signature (or Flexible Spending Credit Card) be considered a charge card then?

 


Yes, assuming that the card doesn't display a credit limit on your reports.   I believe that most Signature cards are like this.

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Regular Contributor
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Re: Are charge cards considered credit cards?


pizzadude wrote:

Drew wrote:

Would a Visa Signature (or Flexible Spending Credit Card) be considered a charge card then?

 


Yes, assuming that the card doesn't display a credit limit on your reports.   I believe that most Signature cards are like this.


Well, these specific cards actually do show a credit limit.

 

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Super Contributor
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Re: Are charge cards considered credit cards?


Drew wrote:

Well, these specific cards actually do show a credit limit.

 


If that's the case then any balances reported will be included in FICO revolving utliization.

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Re: Are charge cards considered credit cards?


pizzadude wrote:

 

Yes, both credit cards and charge cards are considered to be revolving credit.    However FICO scoring doesn't include the balance on charge cards in your revolving utilization calculations.


Hi,

 

Clarifiying question: I was told charge cards are considered "open" accounts and that the balance is not considered in utilization like you mention on certain FICO scoring models like FICO 08. Previous scoring models use the balances on a charge card in their utilization ratio.

 

 

Super Contributor
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Re: Are charge cards considered credit cards?

That's correct ~ the earlier TU98 version includes the charge card balances in utilization, whereas the 04 and 08 FICO models do not.
March2010 FICO® ~ 695 TU, 653 EQ, 697 EX
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Re: Are charge cards considered credit cards?

Still trying to figure out why anyone would want a "Charge card"....  Unless you have a TON of income, and just need it for convienence.  Or just having an AMEX name on a card......


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Re: Are charge cards considered credit cards?


mtrsprt wrote:

Still trying to figure out why anyone would want a "Charge card"....  Unless you have a TON of income, and just need it for convienence.  Or just having an AMEX name on a card......


Because most people don't carry balances on their credit cards anyway and just use them for the benefits of using a credit card + the great rewards for spending. 

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