Flexible spending credit card utilization calculation?

[GomerPyle]

Exactly how is a flexible spending credit card such as Charles Schwab Signature figured into utilization calculations. I have read so many different opinions of this and I am completely confused. Please help.

[Anonymous]

It sounds like it does vary based on how it is coded between the issuer and the credit bureau and particularly which FICO formula is used when the score is pulled. My card just got transformed (not by my choice) into a signature card so I am waiting for the next statement to report so I can pull and see just how exactly it is being coded.

Ideally it is reporting as flexible spending account and the utility is not factored into the FICO equation. That would essentially make it like a charge card that you are allowed to carry a balance on.

[Anonymous]

A Bank of America credit card that I have recently got changed (without my reqest) to a BankAmericard Visa Signature card. Now TransUnion and Equifax are reporting it as a flexible spending credit card and are not showing the large available credit. I recently requested a credit line increase for another bank's credit card and was denied due to "not enough available credit in revolving accounts." The thing is that the Chase card had a balance of 7% to its limit and the BofA card had a $0 balance.

Does anyone have any ideas?

[haulingthescoreup]

If a World (MC) or Signature (Visa) reports the CL, the util is generally figured on the CL. (Which is good.)

If it doesn't report the CL, but it does report the previous highest balance, the util is figured on the highest balance. (Which varies from not-so-good to deeply awful.)

If it reports neither, it is ignored from util calcs. (Impact will vary depending on how many other "normal" CC's you have, and whether you needed the World's/ Sig's CL for your total revolving util.)

I really do think that there needs to be a consumer reaction, demanding that they either report our CL's so that our util is calculated correctly, or that they switch the cards back to the Plat status or whatever they were before. The banks make more money from Worlds and Sigs, and that's why they're pushing them. Someone speculated (and that's all we can do) that banks can reduce their levels of extended credit on their books by using highest balance instead of CL, so that might be an additional motivation.

I have one card (USAA World MC) that does report the CL and uses it for util, so it is most certainly possibly for banks to do so.

Unless they start hearing from a lot of consumers that we want our old cards back, they won't change. (Of course, they won't change even if we do protest, but I'm big on giving it a try.)