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Super Contributor
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Re: Are charge cards considered credit cards?

Many people prefer charge cards for this exact reason, that balances aren't included in FICO revolving utilization.
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Regular Contributor
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Re: Are charge cards considered credit cards?

My Visa signature DOES NOT show a credit limit on any of the three reports. I actually called the bank yesterday because I was wondering why, they said that becuase I have the ability to go over the limit, the limit doenst post to the CAs.

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Re: Are charge cards considered credit cards?


pizzadude wrote:
Many people prefer charge cards for this exact reason, that balances aren't included in FICO revolving utilization.

Yep and as a result I, like many that pif, use charge cards in preference to CCs.


I have reestablished credit over the last couple years
so my moniker is, well, rather out of date.

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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.


I'm still trying to wrap my head around this terminology. Is "revolving credit" the same as "revolver"? I thought revolver=credit card, and <> charge card....

Established Contributor
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Re: Are charge cards considered credit cards?

Revolving line and revolver are the same.
New Contributor
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Re: Are charge cards considered credit cards?

Revolving credit and revolver are both terms for credit cards.

 

You can think of it either like the gun or there's a dictionary definition. With the gun analogy, to empty the gun you use six or so bullets, each making the chamber lighter. With a credit card (from this definition), you load the card and make payments until it's payed off. Contrast that with a charge card, which is more like a laser gun that you charge up and then 'blast' at the end of the month.

 

Alternately, the dictionary definition:

 

3. To recur in cycles or at periodic intervals.

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TU-654 [03/18/2014]
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Re: Are charge cards considered credit cards?

I like that analogy!

 

So we seem to agree that

 

Credit cards = revolving accounts = revolvers

Charge cards <> revolvers

 

Is there a common term for credit cards and charge cards?

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Re: Are charge cards considered credit cards?


Drew wrote:

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?


What do you mean by more forgiving on thin credit files if you have 6+ cards?

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Re: Are charge cards considered credit cards?

Overall scores appear to be higher according to FICO with 6+ credit cards.

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Regular Contributor
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Re: Are charge cards considered credit cards?


bigblue7722 wrote:

Drew wrote:

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?


What do you mean by more forgiving on thin credit files if you have 6+ cards?


There is a FICO score spreadsheet that simulates how FICO is affected by aging of accounts, opening of new accounts, etc.  This speadsheet indicates that 3-5 credit cards has a lower starting score than 6+ credit cards on the FICO algorithm.  I'm not sure if that is 100% accurate though.

 

That brings me back to my original question:  are store cards considered credit cards according to this model?  Currently, I only have 5 actual credit cards (two of which are Visa Signature that report credit limits) and 4-5 store cards.  Should I be applying for another credit card?

 

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