topic Re: SIGNATURE CREDIT CARDS in Credit Cards

SIGNATURE CREDIT CARDS

Anonymous — Sun, 22 Jun 2008 00:42:18 GMT

There seems to be a lot of confusion about the Signature Cards and I hope that the following will help you better understand the purpose of this card.

Signature Cards provides what is called preferred access to entertainment, sporting and dining events along with concierge service. They will also provide hotel upgrades and special offers from retailers.

With that said, there appears to be many different opinions as to how the Credit Issuer reports these cards to the credit bureau.

Your credit access line will show on your credit card statement as a revolving line. There is no pre-set spending limit and “each charge” is evaluated based on spending and payment patterns and your relationship with the issuer including any and all information from your credit report that may show your relationship with other creditors.

Any time that you exceed your credit access line the issuer reports (in house) the excess as non-revolving line. In other words, you must pay the entire amount of your non-revolving line along with any minimum payment due on your next billing statement. The credit issuer will no longer report to the credit bureau when an account balance becomes greater then the access line. (Formerly know as credit limit)

The credit issuer will report these types of accounts as Flexible Spending Revolving Accounts along with the high balance. They NO NOT report the credit access line or credit limit.

Thus, the problem of the consumer begins. The three Credit Bureaus do not have any type of consistent proprietary method as to how this will show on the consumer’s credit reports. Some will show the credit limit as N/A or leave blank, another will show -0- as the credit limit. This reporting method does have an adverse affect on the overall debt to credit ratio for reporting and credit scoring.

Unfortunately, the CEOs of Credit Card Issuers and Credit Reporting Agency’s have no idea what problems they have created with their current reporting procedures. There is a total lack of communications with customers. The old concept “You speak, we listen” is no longer accepted today, including management of FICO.

One method to possibly have them listen is for all those consumers that have a Signature Card to write the CEOs and voice their personal opinion of the problem. The other method would be to file a class action suit based on some harmful adverse action that was implemented against a consumer because of the incorrect reporting.

Your comments are welcome.

Re: SIGNATURE CREDIT CARDS

jaxstraw — Sun, 22 Jun 2008 00:59:57 GMT

Until this is resolved it's one reason I'll probably stay away from signature cards........... plus I have too many now.

Jax

Re: SIGNATURE CREDIT CARDS

Anonymous — Sun, 22 Jun 2008 01:43:42 GMT

My Chase Freedom Siggy card DOES NOT report as revolving - except on EX. With this in mind, it has not harmed my EX score.

And, BTW, I received another room upgrade today at the Grand Hyatt in Tampa.

Re: SIGNATURE CREDIT CARDS

Anonymous — Sun, 22 Jun 2008 03:10:53 GMT

FaircreditguyFL

That is very interesting. All three agency’s report mine as revolving.

Would you care to share exactly how the other agencies report your card??

Anyone else care to share how their card is reported by the three Credit Bureaus???

It is my understanding that they will use your “High Balance” for scoring purposes. However, your debt to ratio took a hit since they do not report the credit limit, thus providing you with a lower score than you should have received. Utilization is a factor in scoring. Many thanks for your comments.

By the way, congratulations on your room upgrade.

Re: SIGNATURE CREDIT CARDS

Anonymous — Sun, 22 Jun 2008 03:56:25 GMT

Account type:
TU: OPEN
EQ: OPEN
EX: Revolving

Signature and World cards at unique and are great way to hide credit limits. If you need a card to help utilization, stay away from the cards. As for me, I like the hidden tradeline signature cards offer. Utilization is factored a 0%. They don't help or harm your score unless you miss a payment. Much like a business card.

Message Edited by FaircreditguyFL on 06-21-2008 08:56 PM

Re: SIGNATURE CREDIT CARDS

CreditDrama85 — Sun, 22 Jun 2008 03:42:23 GMT

EX is actually counting it as "open" also, its just that under payment terms...it says "1 month" on the credit report to signify it is an open ended account with not set cl

Re: SIGNATURE CREDIT CARDS

Anonymous — Sun, 22 Jun 2008 03:53:13 GMT

@CreditDrama85 wrote:
EX is actually counting it as "open" also, its just that under payment terms...it says "1 month" on the credit report to signify it is an open ended account with not set cl

correct.

Re: SIGNATURE CREDIT CARDS

Anonymous — Sun, 22 Jun 2008 14:08:56 GMT

As I have indicated previously, there is no consistency in the way signature cards are reported on the credit report.

My Ex Report shows TYPE: Flex Spending. TERMS: N/A. CREDIT LIMIT: N/A

Since the credit limit is not reported, utilization is calculated by dividing the current balance of the account by the High Balance.

When the credit limit is reported the utilization is based on the current balance divided by the credit limit.

Please correct me if I am in error.

To be perfectly honest, other than the perks of this card it serves no useful purpose for the average consumer. The non- reporting of the credit limit actually hurts the overall debt to credit ratio percentages.

I suppose one could enjoy this card as a status symbol rather than being practical.

Re: SIGNATURE CREDIT CARDS

Anonymous — Sun, 22 Jun 2008 15:04:45 GMT

Cleanmachine wrote:

As I have indicated previously, there is no consistency in the way signature cards are reported on the credit report.

My Ex Report shows TYPE: Flex Spending. TERMS: N/A. CREDIT LIMIT: N/A

Since the credit limit is not reported, utilization is calculated by dividing the current balance of the account by the High Balance.

When the credit limit is reported the utilization is based on the current balance divided by the credit limit.

Please correct me if I am in error.

To be perfectly honest, other than the perks of this card it serves no useful purpose for the average consumer. The non- reporting of the credit limit actually hurts the overall debt to credit ratio percentages.

I suppose one could enjoy this card as a status symbol rather than being practical.

You are entirely correct.

A Signature card is still on my wish list, however, because I think the perks make it worthwhile. My overall utilization is near zero (much less than 1%), so I am not too concerned about how the faulty reporting will affect my score. I do feel for those, however, who have been blindsided by the way these cards report and the resulting FICO damage they have suffered.

It's also worth noting that besides Visa Signature cards, World MasterCard cards tend to have the same reporting issue.

Re: SIGNATURE CREDIT CARDS

Anonymous — Sun, 22 Jun 2008 20:36:35 GMT

cheddar

With your score, I find it hard to believe that you would have any difficulty in obtaining a signature card. Take the plunge and get that card off your wish list.

As far as the perks making it worthwhile, I believe you can obtain the same perks just by asking the Merchant using any other card.

Have any ideas or suggestions as to how the consumer can get the managers of the credit card industries, credit bureau’s, including FICO to revisit this problem as to their method of reporting and how it actually affects the consumer credit report and scores???

Re: SIGNATURE CREDIT CARDS

Anonymous — Mon, 23 Jun 2008 01:17:56 GMT

Cleanmachine wrote:

cheddar

With your score, I find it hard to believe that you would have any difficulty in obtaining a signature card. Take the plunge and get that card off your wish list.

As far as the perks making it worthwhile, I believe you can obtain the same perks just by asking the Merchant using any other card.

Have any ideas or suggestions as to how the consumer can get the managers of the credit card industries, credit bureau’s, including FICO to revisit this problem as to their method of reporting and how it actually affects the consumer credit report and scores???

Yeah, I'm confident I could get a Chase Freedom Signature, for example, but I'm on an app hiatus until January 2009. Way too many new accounts at the moment. So I'm content for the time being to just stare at my wishlist every once in a while.

I don't really have any suggestions about how to get this problem corrected. From the stories I have read, executives at the CCCs are not too concerned about the reporting of those cards that report incorrectly. Perhaps the FTC might be interested in hearing about the issue, since there is an industry standard that includes proper coding for accounts like these, but most CCCs don't bother to use it. I'm really not sure.

Re: SIGNATURE CREDIT CARDS

Anonymous — Mon, 23 Jun 2008 03:01:39 GMT

@Anonymous wrote:
cheddar
With your score, I find it hard to believe that you would have any difficulty in obtaining a signature card. Take the plunge and get that card off your wish list.
As far as the perks making it worthwhile, I believe you can obtain the same perks just by asking the Merchant using any other card.
Have any ideas or suggestions as to how the consumer can get the managers of the credit card industries, credit bureau’s, including FICO to revisit this problem as to their method of reporting and how it actually affects the consumer credit report and scores???

Have you seen a decrease in score using your signature card?

Re: SIGNATURE CREDIT CARDS

Anonymous — Mon, 23 Jun 2008 05:10:16 GMT

I have an REI US Bank Visa Signature Card as of April 2008 and I really like the perks. I know I certainly can't say if this card has hurt my score since my score has gone up a few times (according to scorewatch) since I got the card. I'm in the middle of paying down debt plus at least 3 CC accounts have given me a CLI since April.

The plan for this card is to PIF each month. My original primary non-Amex card offered me a nice promo BT with a cap'd fee, so I app'd to have this card for day-to-day non-Amex expenses.

I think there are so many factors that can help off-set other factors. I think getting a new card probably hurt my score more than having a Visa Sig Card. A very YMMV I think. I think for my case, a Visa Sig my not be as much of a negative impact with: a long history (21 years) and already established CLs.

Re: SIGNATURE CREDIT CARDS

Anonymous — Mon, 23 Jun 2008 15:24:41 GMT

cheddar;

I do agree with you about Credit Card Company Executives not being concerned about how this card, and for that matter, how any card is reported to the credit bureaus. This issue is not a priority. As far as the FTC is concerned, they have no legal standing to compel the industries to comply in reporting procedures.

Many thanks for you input.

Re: SIGNATURE CREDIT CARDS

Anonymous — Mon, 23 Jun 2008 15:25:38 GMT

FaircreditguyFL;

To be perfectly honest with you I am not a score watcher. My concerned is exactly what is in my credit report. I do know that my last report showed an increase of 10% utilization in my overall debt to credit ratio. In my opinion, this could potentially cause an adverse affect by my other and future creditors. I have had success on two occasions to have them report the correct information only to find out a month later that it is no longer reported. My problem is that they are reporting “zero” in lieu of N/A or just leaving it blank.

As far as my score is concerned, I am unable to conclude if my score has been affected since the score would change anytime there is any activity such as payments, charges, etc. that have been placed on my report.

Other than the amenities they have, I am not convinced that this card is any better then any other card. In my experience in using another card I have received some of the same benefits just by requesting the upgrade to the merchant.

When my special offer expires, this card will be placed in my “PIF” file when used.