topic Re: Question on Charge /Visa Signature Cards in Credit Cards

Question on Charge /Visa Signature Cards

ACsteel — Fri, 24 Aug 2012 11:56:57 GMT

If you have lets says 2 Visa Signature Cards, and 1 Amex Charge card (all are not reporting credit limits).Additionally you have an AMEX BCE reporting a limit of lets just say 500 dollars.

if you keep your debt to utilization rate low 0-5%, does it matter that on your credit report that your sum of credit line being reported is only up to 500 dollars, or does your FICO only consider 4 lines of cards, the AAoA, the low ratio of utilization and available credit, and doesn't care about how much credit is being reported?

I see many concerned users not sure on accepting upgrades to visa signature cards or only having amex charge cards b/c of fear of no reporting of credit limits.

Re: Question on Charge /Visa Signature Cards

Revelate — Fri, 24 Aug 2012 12:46:19 GMT

FICO cares about all those things, but the revolving utilization metric only looks at your aggregate credit limit.

Couple of points though:

- Most Visa Sig products these days report a limit.

- Those that don't, will report a "high balance" and FICO will use these as your limit

- Amex charge card utilization isn't calculated in either FICO '04 or FICO '08 versions of the model

If I were in that hypothetical situation, take a few month approach on it. Namely, I'd run my life through a single Visa Sig card to start, pool up cash in my bank account, to goose up the high balance, and then write a check for it when it got up to a reasonable level. Yeah, I'd eat a few points in fractional interest, but spending a bit on interest to resolve the situation would be worth it to me personally. This also assumes I'm not applying for anything in the next few months as I would be hurting my interstitial FICO score, but FICO has no memory of prior utilization rates, so I don't worry about that.

If your aggregate spend is high enough (mine isn't currently), you might be able to do it in one month, not pay any interest at all, and then repeat the cycle with sig cards 2,3,4 or whatever.

It's likely moot though. If you have specific Visa Sig cards in mind, share them and it's pretty much guarunteed a bunch of folks here will know whether you have to worry about this or not as more and more are reporting limits.

Edit: alternative strategy for completeness: Since Amex charge cards don't get counted in the more recent versions of the FICO models (term 1 month); leave whatever balance you need for short-term float on that tradeline, and then let one of the siggy cards report the usual 1-9% balance that seems to work for most folks.

Re: Question on Charge /Visa Signature Cards

jamesdwi — Fri, 24 Aug 2012 12:53:43 GMT

With that group of cards, fico would most likely hate you, but manual reviewers would love you, so I would expect to see a lot of 7-10 day review notice messages. Probably be best to apply for a non-signature version of a card from each of your lenders just for UTL reasons.

Re: Question on Charge /Visa Signature Cards

Anonymous — Fri, 24 Aug 2012 12:55:14 GMT

+1 relevate. Funny thing I did as relevate suggested for my Amex charge card on the off chance a lender might be using a really old fico scoring method. Just to add a few points. You could have 800+ fico with a couple of old 500 dollar limit cards. Util calculations dont care about the amounts, but just the ratios. Does that mean someone is going to trust you with 10k limit? Nope. I compare my example to someone getting an A in kindergarten. They got an A but doesn't mean they are ready for astrophysics. Same with credit. Sure you really know how to handle 500 dollar credit cards, but no one going to trust you with 5k. Also, op, you look at Amex charge card witH no limit reporting as negative. I look at it as positive. Since most ficos ignore the amounts there, you don't need to manage it as closely.

Re: Question on Charge /Visa Signature Cards

ACsteel — Fri, 24 Aug 2012 13:38:43 GMT

@Revelate or @Crashem So the high balance put on the AMEX let it post AFTER the statement cut? Let's suppose I have a 0 Balance, create a high balance one time by letting it stay until after statement cut and I have a balance that actually has a due date then PIF?

Re: Question on Charge /Visa Signature Cards

xiownthisplacex — Fri, 24 Aug 2012 13:44:40 GMT

That's for a Visa Sig, so it would report as your "limit" in case it doesn't report a limit.

What they are saying is:

-Put 1%-9% on a your Visa

-Put the rest on AMEX

This is because to achieve optimal FICO score, util seems to be at 9% and AMEX util isn't counted towards it.

Re: Question on Charge /Visa Signature Cards

ACsteel — Fri, 24 Aug 2012 13:48:09 GMT

But is the way I said to do it with AMEX the correct way?

Re: Question on Charge /Visa Signature Cards

xiownthisplacex — Fri, 24 Aug 2012 13:55:00 GMT

Not sure what you mean about the right way though.

AMEX charge cards util are not counted, only revolvers. Since you have a Visa Sig that doesn't report limit, do you revelate said, have a high balance for a month or two, because FICO will use that balance as the limit. You can have $1 or $1,000,000 on AMEX charge card, won't make a difference for FICO score or util.

Re: Question on Charge /Visa Signature Cards

ACsteel — Fri, 24 Aug 2012 13:58:58 GMT

But isn't he saying with AMEX you can do the same with a noncredit reporting VISA Sig, which is to create a high balance once or twice so that it would be considered as a limit?

Re: Question on Charge /Visa Signature Cards

Anonymous — Fri, 24 Aug 2012 14:03:41 GMT

@angelclaudio wrote:
But isn't he saying with AMEX you can do the same with a noncredit reporting VISA Sig, which is to create a high balance once or twice so that it would be considered as a limit?

Amex charge cards aren't considered in utilization, period (except for TU98). There's no need to create a high balance, because it will almost never be looked at like a limit. The only exception is the TU98 scoring model, but that is now very outdated and rarely used, pretty much to the point where there is no need to consider it. But, if you really want to prepare for the possibility that a lender might use TU98, then go ahead and get a high balance on your Amex, because TU98 does use high balance for limit.

Re: Question on Charge /Visa Signature Cards

Anonymous — Fri, 24 Aug 2012 14:04:27 GMT

@angelclaudio wrote:
But isn't he saying with AMEX you can do the same with a noncredit reporting VISA Sig, which is to create a high balance once or twice so that it would be considered as a limit?

basically for almost all fico scoring Amex charge card balance is ignored for util calculations. However, with old fico scoring fico98 which hardly anyone uses, they treat the amex charge card in same was visa sig without limit is treated. So ifyou are paranoid, you can do the same thing and let high balance report just in case. As FYI, I believe Amex reported my high balance at any point as my high balance. So even thou statement balance was only 6k, I think it reported 30ishk as my high balance as I had 30ishk on my Amex at some point.

Re: Question on Charge /Visa Signature Cards

ACsteel — Fri, 24 Aug 2012 14:15:14 GMT

@Crashem thanks for that info much appreciated, I'm not paranoid so I don't think I will be doing that, I'm actually paranoid/uncomfortable about not PIF before statment cuts and I rather have a 0 balance every cycle.

I do not have any siggys nor did I want one, I was just wondering for my AMEX charge card. I think for the future though I should get two more revolvers to increase my aggregate credit limit, as I only have atm that factors in, one Major credit card revolver. I also have one department store revolver, which doesn't get added to the aggregate credit limit even though it's credit limit shows on my credit report.

Re: Question on Charge /Visa Signature Cards

iMacDrew — Fri, 24 Aug 2012 14:37:50 GMT

my NFCU flagship visa reports my credit limit of 10k and whatever the minimum payment is thats what it reports as my balance... This has only happened once since i PCd from the green CAsh back card. It could only be reporting because i PCed though so idk.

Re: Question on Charge /Visa Signature Cards

xiownthisplacex — Fri, 24 Aug 2012 14:39:08 GMT

@angelclaudio wrote:
@Anonymous thanks for that info much appreciated, I'm not paranoid so I don't think I will be doing that, I'm actually paranoid/uncomfortable about not PIF before statment cuts and I rather have a 0 balance every cycle.

I do not have any siggys nor did I want one, I was just wondering for my AMEX charge card. I think for the future though I should get two more revolvers to increase my aggregate credit limit, as I only have atm that factors in, one Major credit card revolver. I also have one department store revolver, which doesn't get added to the aggregate credit limit even though it's credit limit shows on my credit report.

I don't see why you should be, it won't affect you in any way. My AMEX charge card is the only one (besides JPM Select) that I won't care what it reports, because nothing counts!

Re: Question on Charge /Visa Signature Cards

Anonymous — Fri, 24 Aug 2012 14:46:04 GMT

Department store revolver should figure in. Although some lenders tend to ignore store cards (chase) in their internal formulas. If i was you, I would get one Amex revolver given backdating, their great cli policy, great existing Amex customer app policy, and your current relationship with them. After 61 day 3x cli from Amex, I would recommend one other card once the new Amex cl reports. Maybe a nice cash back card. Priceline at 2% cash back. Us bank cash+ card with 5/5/2/1% cash back. Maybe both

Re: Question on Charge /Visa Signature Cards

Anonymous — Fri, 24 Aug 2012 14:47:04 GMT

Btw don't worry about visa sig cards. Almost all of them reporting limit now. Bofa being biggest exception.

Re: Question on Charge /Visa Signature Cards

ACsteel — Fri, 24 Aug 2012 14:50:46 GMT

@Crashem thank for the great advice and I will def. try to get the BCP next summer, last month I tried but I was told I was an AMEX customer for too short a time (just got my AMEX charge card July 1, so I will be gardening until June 2013 where I will reattempt for it.

Re: Question on Charge /Visa Signature Cards

Anonymous — Fri, 24 Aug 2012 14:55:55 GMT

@angelclaudio wrote:
@Anonymous thank for the great advice and I will def. try to get the BCP next summer, last month I tried but I was told I was an AMEX customer for too short a time (just got my AMEX charge card July 1, so I will be gardening until June 2013 where I will reattempt for it.

oh didn't know you just got Amex. In that case, app in jan 2013 for max backdating. Remember rejection from Amex only results in soft pull and no negative on credit. Don't recommend applying every month but might as well try jan.