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Are charge cards considered credit cards?

Super Contributor

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.
March2010 FICO® ~ 695 TU, 653 EQ, 697 EX
Message 11 of 22
Regular Contributor

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.

Message 12 of 22
Valued Contributor

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so my moniker is, well, rather out of date.

WM Discover $1800, WF Plat 12k, Chase Freedom Siggy18k, Amex Plat (60k H/B), Citi AA EWMC 25k
Message 13 of 22
Blogger

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....

Message 14 of 22
Valued Contributor

Re: Are charge cards considered credit cards?

Revolving line and revolver are the same.
Message 15 of 22
New Contributor

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]
Message 16 of 22
Blogger

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?

Message 17 of 22
Valued Contributor

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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Card Ring $5000 Chase Marriott $5000,Chase Hyatt $5000, Sallie Mae Mastercard $4400, Paypal smart connect $4000,Chase Freedom $3200, Capital one Quicksliver visa $3000, Chase IHG Rewards $2300, Chase Southwest Premier $2000, Citi Double Cash $1500, AMEX BCE $1000

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Message 18 of 22
Regular Contributor

Re: Are charge cards considered credit cards?

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

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Message 19 of 22
Regular Contributor

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?

 

American Express Blue Cash Everyday $25000
Barclays Sallie Mae World MasterCard $25000
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Chase Freedom Visa Signature $25000
Discover IT $27000
US Bank Cash+ Visa Signature $25000
BofA Travel Rewards $18000

Message 20 of 22