topic Re: Charge card question in Credit Cards

Charge card question

Anonymous — Mon, 11 Jan 2016 04:31:26 GMT

For someone starting to build credit, is charge card a great option?

Any cards that you can get with little or no credit history will either be secured or have a low CL.

Now, keeping in mind your credit utilization should be 0-10%, it would be really hard to rely on those credit cards unless you keep paying them off multiple times a month.

So, are amex charge cards a great option? They have an internal preset spending limit which will most likely be higher than the CL you get on your credit cards at this point. Also, you do not have to worry about credit utilization. Can you pay a charge card before you use it or it not advised to do so?

Thanks.

Re: Charge card question

creditguy — Mon, 11 Jan 2016 04:45:46 GMT

Honestly I doubt Amex would approve someone for a charge card who is starting to build credit. You can always check out their website for prequalified offers and see if its an option. Have you tried any other cards prequalified offers, like Capital One? If not start there and see what your options are, I know I personally wouldn't start with a charge card, there are better options and cards out there.

Re: Charge card question

NRB525 — Mon, 11 Jan 2016 04:50:21 GMT

OP which cards do you have now? Building credit often starts with the lower limit cards, but with good payment history, access to credit grows over time.

Re: Charge card question

Anonymous — Mon, 11 Jan 2016 05:02:59 GMT

I have a charge card from amex with no credit history. I also have 2 other credit cards but their CL is way too low even for weekly expenditure. Hence, I wanted some advice.

Re: Charge card question

creditguy — Mon, 11 Jan 2016 05:07:35 GMT

If you have an Amex charge, then by all means use it to build your credit history along with building your rep with Amex.As far as your other cards, you can use them and pay them off several times a month and then hit up the issuers for a CLI with a demonstrated need for one.

Re: Charge card question

Anonymous — Mon, 11 Jan 2016 05:10:11 GMT

Thanks but how will credit build with a charge card since it has no preset CL?

Re: Charge card question

creditguy — Mon, 11 Jan 2016 05:17:53 GMT

I do believe balances on charge cards are reported but are not factored into your utilization. So it should show if you have had a balance and if it has been paid. Charge cards are not the best card for building, but like I said it will help your standing with Amex. Use it and apply for a revolver with Amex so they can see you have history of using and paying and give you more responsibility.

Re: Charge card question

Anonymous — Mon, 11 Jan 2016 05:22:25 GMT

Thanks for the advice, really like this forum!

Re: Charge card question

OmarGB9 — Mon, 11 Jan 2016 06:04:09 GMT

As stated, charge cards help build solid payment history and build up a nice relationship with the Amex as well. Plus their balances aren't factored into your utilization so even better!

Re: Charge card question

Anonymous — Mon, 11 Jan 2016 10:55:33 GMT

It's good for building your rep with Amex as previously stated and all around credit history with timely payments. I started out with an Amex Green card and just went from there. Also on the Amex site you can type in how much you are looking to charge and it will tell you if you are approved for that amount.

Re: Charge card question

Discover2016 — Mon, 11 Jan 2016 13:14:12 GMT

When I started establishing credit last year one of my early choices was an Amex charge card which I love. It prevents you from spending too much since you have to pay it in full and it also helps me build history with Amex, it was win win.

PS, I am pretty sure that if I didn't have my Amex charge card I wouldn't have been approved for my BCE, so the payment history with Amex is a bonus.

Re: Charge card question

takeshi74 — Mon, 11 Jan 2016 16:09:07 GMT

@Anonymous wrote:
For someone starting to build credit, is charge card a great option?

Any cards that you can get with little or no credit history will either be secured or have a low CL.

Now, keeping in mind your credit utilization should be 0-10%, it would be really hard to rely on those credit cards unless you keep paying them off multiple times a month.

They can be. "Great" is always highly subjective and it's no different with charge cards. They are not one-size-fits-all. As with any card, one needs to use one's specific needs/wants to find cards that suit the individual. If one doesn't have the responsbility to manage a charge card that has to be paid in full then one can easily get in trouble. That said, one can also get in trouble with credit cards as well. The latter just offer a little more leeway in that one can carry balances. Granted, Pay Over Time is an option for some with AmEx charge cards, but not all.

@Anonymous wrote:
They have an internal preset spending limit which will most likely be higher than the CL you get on your credit cards at this point.

Not necessarily. Don't just assume. It all depends on one's credit profile, income and whatever other factors AmEx considers.

@Anonymous wrote:
Thanks but how will credit build with a charge card since it has no preset CL?

Limits are not the only factor that matters with one's credit profile.

http://www.myfico.com/crediteducation/whatsinyourscore.aspx

@creditguy wrote:
Honestly I doubt Amex would approve someone for a charge card who is starting to build credit.

My first card was an AmEx Gold but that was a long time ago. My MSD is 1998. Our understanding is that AmEx's charge cards (aside from the Centurion) have easier underwriting requirements than many of the credit cards. Many find that they are able to qualify for an AmEx charge card and not a credit card.

Re: Charge card question

SouthJamaica — Mon, 11 Jan 2016 17:11:23 GMT

@Anonymous wrote:
For someone starting to build credit, is charge card a great option?

Any cards that you can get with little or no credit history will either be secured or have a low CL.

Now, keeping in mind your credit utilization should be 0-10%, it would be really hard to rely on those credit cards unless you keep paying them off multiple times a month.

So, are amex charge cards a great option? They have an internal preset spending limit which will most likely be higher than the CL you get on your credit cards at this point. Also, you do not have to worry about credit utilization. Can you pay a charge card before you use it or it not advised to do so?

Thanks.

They are terrible for that purpose, because they don't report a credit limit so it can't help your utilization.

I personally find them pretty much useless, unless you're able to make great use of their perks and rewards, which I'm not.