topic Re: AMEX Question... in Credit Cards

AMEX Question...

tbone74 — Mon, 04 May 2009 14:03:00 GMT

Okay, so I've been busting my tail getting my scores heading in the upward direction. I've paid off my CC ... nothing in collection, letters out, etc...and all looks well However, I've just been added to a AMEX account that has an excellent history as an AU. But, from what I've seen...if it's a card that does not have a credit limit, I should expect my score to go down? Can anyone provide any clarity ..or verify this, please?

Thank you in advance!

Re: AMEX Question...

Anonymous — Mon, 04 May 2009 14:15:45 GMT

If it is an AMEX charge/no preset card, then they do not report a CL, just a highest balance. Reported balances may affect your percentage of utilization because there is no offsetting CL reported. This tends to be one of the potential FICO risks of signature or no preset cards.

Message Edited by txjohn on 05-04-2009 07:15 AM

Re: AMEX Question...

tbone74 — Mon, 04 May 2009 14:18:09 GMT

Thank you....will having myself removed as a AU on this particular card have any negative impact on my CS's?

Re: AMEX Question...

CHARGE_IT — Mon, 04 May 2009 19:35:45 GMT

Really no need to be removed. You have been misinformed. If an AMEX CHARGE card is being reported as OTHER on your reports there is no score impact. The poster has confused how signature cards are reported with a true charge card.

In fact the advantage of a charge card is that your usage won't hurt you like a credit card and the absence of a limit is not factored. (however, you do understand you can't lower your UTL without a reported limit)

I have twenty-seven years of experience with this and have tested it well. If I use a credit card after dormancy, there is a ding. If I do the same with a charge card there is no response.

You may also notice in your reports there is a section that reports "other" balances separately.

(also, some CRBs report charge cards as revolving with ONE MONTH TERMS)

The reason they report these differently is that they are indeed handled differently. The one month term makes it clear this is not a carried balance , but a monthly due amount that is paid each month and the following amount is an entirely new balance which will also be replaced the next reporting.

I know that there is a lot of misunderstanding about this issue, so I have made it my business through testing and talking to various sources. In fact I raised my scores significantly through the years because I was not reporting significant spending on any of the twelve credit cards I have. I always used the charge cards during the time I was working to raise my scores. ( although I was spending a significant amount, the small amount I was using through credit cards made the appearance of a very low UTL )

Btw, my SO and I are AU on each other's cards for convenience. (five chargers between us) Never an issue with the AU status.

This is an issue that you are just going to have to make a decision for yourself, after considering what people tell you. I am simply writing of my experience and knowledge, as are others here. However, I believe decisions are best made from real life experience, than solely by warnings and speculation. I also know that it is a hot issue. No one's mind is ever changed , but I can fortunately stand with what I know has always worked for me , which is what these forums are supposed to provide. (not just one opinion)

Good luck,

@tbone74 wrote:
Thank you....will having myself removed as a AU on this particular card have any negative impact on my CS's?

Re: AMEX Question...

Anonymous — Mon, 04 May 2009 19:42:41 GMT

Or to summarize: Charge cards are not counted in your utilization, neither their balance, nor their exposure limit.

Re: AMEX Question...

athensguy — Mon, 04 May 2009 23:13:09 GMT

@Anonymous wrote:
Or to summarize: Charge cards are not counted in your utilization, neither their balance, nor their exposure limit.

Unless it's an older version of the score, or it's reported wrong.

Also, the previous poster is incorrect about signature cards, because if they are reported correctly they have exactly the same credit reporting behavior as a charge card.

Re: AMEX Question...

haulingthescoreup — Mon, 04 May 2009 23:30:10 GMT

I appreciate athensguy taking the first bullet on this one, because I always get yelled at when I post this: with the scores that are currently available on myFICO, EQ and EX ignore AmEx charge cards, but the TU version still used here (as provided by TransUnion), AmEx charge cards are factored into util on the TU score. This info is from a very good authority. *heads under dining room table again to wait for the posts to the contrary*

And there are some Signature (Visa) and World (MC) cards that do report like normal cards. My USAA World MC reports properly, which is good, as I would hate to lose that $27K from my total CL.

Re: AMEX Question...

athensguy — Mon, 04 May 2009 23:41:15 GMT

@haulingthescoreup wrote:
I appreciate athensguy taking the first bullet on this one, because I always get yelled at when I post this: with the scores that are currently available on myFICO, EQ and EX ignore AmEx charge cards, but the TU version still used here (as provided by TransUnion), AmEx charge cards are factored into util on the TU score. This info is from a very good authority. *heads under dining room table again to wait for the posts to the contrary*

And there are some Signature (Visa) and World (MC) cards that do report like normal cards. My USAA World MC reports properly, which is good, as I would hate to lose that $27K from my total CL.

Also, I don't have one, but I've heard that Citi World MCs report in the worst way: not as open/flex, but also no CL, so they usually look maxed.

Of the ones I do have, FIA cards report as flex, so they don't get util, and Chase reports as Open, which is the same way a charge card usually reports.

I don't know how the old version of TU factors in the Flexible Spending Credit Card notation.

Re: AMEX Question...

Anonymous — Tue, 05 May 2009 01:05:12 GMT

I agree with hauling - the older version of TU does factor the amex charge card into util. I have had this problem for many years. not sure when the new TU will be available for fico members..
@haulingthescoreup wrote:
I appreciate athensguy taking the first bullet on this one, because I always get yelled at when I post this: with the scores that are currently available on myFICO, EQ and EX ignore AmEx charge cards, but the TU version still used here (as provided by TransUnion), AmEx charge cards are factored into util on the TU score. This info is from a very good authority. *heads under dining room table again to wait for the posts to the contrary*

And there are some Signature (Visa) and World (MC) cards that do report like normal cards. My USAA World MC reports properly, which is good, as I would hate to lose that $27K from my total CL.

Re: AMEX Question...

CHARGE_IT — Tue, 05 May 2009 01:09:15 GMT

When you write this, I always get pleasure to point out that TU is much higher than my other scores and all things being equal, those extra points must be coming from the reportage of a very large sum of money spent each month. Maybe if I spend more, it will go even higher.

(don't try this at home)

@haulingthescoreup wrote:
I appreciate athensguy taking the first bullet on this one, because I always get yelled at when I post this: with the scores that are currently available on myFICO, EQ and EX ignore AmEx charge cards, but the TU version still used here (as provided by TransUnion), AmEx charge cards are factored into util on the TU score. This info is from a very good authority. *heads under dining room table again to wait for the posts to the contrary*

And there are some Signature (Visa) and World (MC) cards that do report like normal cards. My USAA World MC reports properly, which is good, as I would hate to lose that $27K from my total CL.

Re: AMEX Question...

athensguy — Tue, 05 May 2009 01:20:50 GMT

If you bought your score here, it will probably mention your util under this heading:

It should look something like:

How does the util compare between your FICO scores from this site and your actual calculated util?

Re: AMEX Question...

haulingthescoreup — Tue, 05 May 2009 01:39:15 GMT

CHARGE_IT wrote:

When you write this, I always get pleasure to point out that TU is much higher than my other scores and all things being equal, those extra points must be coming from the reportage of a very large sum of money spent each month. Maybe if I spend more, it will go even higher.

(don't try this at home)

CI
@haulingthescoreup wrote:
I appreciate athensguy taking the first bullet on this one, because I always get yelled at when I post this: with the scores that are currently available on myFICO, EQ and EX ignore AmEx charge cards, but the TU version still used here (as provided by TransUnion), AmEx charge cards are factored into util on the TU score. This info is from a very good authority. *heads under dining room table again to wait for the posts to the contrary*

And there are some Signature (Visa) and World (MC) cards that do report like normal cards. My USAA World MC reports properly, which is good, as I would hate to lose that $27K from my total CL.

C_I, I'm not challenging you, because I've seen so many contradictory reports from members who obviously know what they're talking about.

What's the highest balance on your AmEx card? If it's high enough, that's what's being calculated as your CL, and that would help.

For those a lot braver than I, this is the work-around on cards that normally don't report CL's: grit your teeth, charge near the limit, pay it off immediately, and let that high balance become your reported CL. With cards other than AmEx, you don't have to let the balance post: the CCC will report the intra-cycle balance. AmEx unfortunately only reports the highest balance ever shown on a statement as the balance due. This made me crazy, considering the number of times I ran my Gold up into the thousands, and yet to this day, the highest balance shows as $64.

Message Edited by haulingthescoreup on 05-04-2009 06:39 PM