Charge card vs. credit card?

[Cprman]

Whats exactally is the difference. If I have only credit cards, should I get some charge cards to add to my mixture of accounts. Whats the beset balance to have to reap the most credict, Ive seen the 3 credit card and 1 charge card mentioned here? Should I get a few more, Im at the gate of 700 and want to push it up.

[Anonymous]

Charge cards don't help your FICO or your mix any more than a regular credit card will. FICO just sees them as another revolving tradeline.

[haulingthescoreup]

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@Cprman wrote:

Whats exactally is the difference. If I have only credit cards, should I get some charge cards to add to my mixture of accounts. Whats the beset balance to have to reap the most credict, Ive seen the 3 credit card and 1 charge card mentioned here? Should I get a few more, Im at the gate of 700 and want to push it up.

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The three plus one that you mentioned is actually 3 bank cards and 1 retail or gas card. Many people use the term "charge card" for a store card, but a charge card is actually like the old-fashioned American Express cards (green, gold, platinum) that you're expected to pay in full every month, as opposed to a credit card, which allows you to carry a balance.

The confusion continues on credit reports, where you might also see the term "charge" for a store card.

The FICO Credit Education tab recommends having at least one retail or gas card. To count as this, the card can't have a Visa or MasterCard, etc. logo. So the orange Home Depot store card is a retail card; the white Home Depot MasterCard is considered a bank card. Bank cards have a Visa, Mastercard, Discover, or American Express logo on them, regardless of who issues them.

[MattH]

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haulingthescoreup wrote:...

The three plus one that you mentioned is actually 3 bank cards and 1 retail or gas card. Many people use the term "charge card" for a store card, but a charge card is actually like the old-fashioned American Express cards (green, gold, platinum) that you're expected to pay in full every month, as opposed to a credit card, which allows you to carry a balance.

The confusion continues on credit reports, where you might also see the term "charge" for a store card.

The FICO Credit Education tab recommends having at least one retail or gas card. To count as this, the card can't have a Visa or MasterCard, etc. logo. So the orange Home Depot store card is a retail card; the white Home Depot MasterCard is considered a bank card. Bank cards have a Visa, Mastercard, Discover, or American Express logo on them, regardless of who issues them.

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Hmm, when I pull my FICO scores Experian is always my highest, in recent years it has ranged from 795 to 826, and that does not include any retail or gas cards. I've got Amex, Visa, MC, and Discover, period. Once upon a time I had Sears and Firestone cards, but on those accounts date of last activity was over 10 years ago so these are no longer listed on my report -- remember, positive tradelines remain for 10 years; baddies (which I have never had) last for 7 years. I don't recall whether there was any score drop when the Firestone aged off my reports, but if so it was a very small drop. My FICO scores from the other two agencies are a tad lower but all have consistently been well over 750 for years.

Edited to add, well actually I do have one tradeline that might be considered retail, a Carrier account with CitiFinancial for HVAC purposes. Not too long after we got our condo the A/C died, and between the down payment and stuff like furniture we didn't have a whole lotta cash on hand so we had to finance the new compressor. We paid that off pretty quickly and then resumed saving so when the furnace needed replacement last year we just wrote a check.

Message Edited by MattH on 05-07-2008 04:32 AM

[Anonymous]

Now that I think about it, the only actual "real" charge cards that still exist that I know of are the Green, Gold, Platinum, and Black Amex cards.

[Anonymous]

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@Anonymous wrote:
Now that I think about it, the only actual "real" charge cards that still exist that I know of are the Green, Gold, Platinum, and Black Amex cards.

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Don't forget the eminently forgettable Diner's Club!

And, just to reiterate, *real* charge cards don't help your credit mix any better than any other credit card.

[athensguy]

Well, a properly coded real charge card won't count in Util.

[haulingthescoreup]

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@MattH wrote:

Hmm, when I pull my FICO scores Experian is always my highest, in recent years it has ranged from 795 to 826, and that does not include any retail or gas cards. I've got Amex, Visa, MC, and Discover, period. Once upon a time I had Sears and Firestone cards, but on those accounts date of last activity was over 10 years ago so these are no longer listed on my report....

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I had always read that screen as implying that many people started with retail cards and then added bank cards as their credit improved, so I was never convinced about the importance of store cards. I have seen several reports about score improvements when one was added, though. Maybe this depends on where you are with your credit at the time.

We also have members in the 800 club without mortgages, or without installment loans, so that's not an automatic must-have either. Maybe once someone has had credit long enough and handled it well enough, they don't need to have that careful mix going on. That would be nice, because I don't much want to go get a mortgage when I'm 76, which is when the current one should have been paid off for 10 years and finally goes poof.

By the way, all accounts are supposed to report for 10 years after closing, whether they had baddies on them or not. The baddies stop reporting 7 years after they happened, and then the now-clean account keeps on reporting until 10 years after closing, meaning that you'll have at least 3 years of clean reporting; more if the baddie occurred a while before closing the account. I think you said that; I'm just trying to avoid confusion in newer readers. It took me a good six months to get my mind around that.

[Anonymous]

If your store card upgrades to a credit card (Target REDcard to Target Visa), what part of the mix is that considered?

[haulingthescoreup]

If the Visa replaces the red Target card, you no longer have a store card, and you now have a bank card. With those cards that add a Visa/MC, rather than replacing the store card, you wind up with one of each. I think this is what Macy's does? I always stick my foot in my mouth on these, because we have a semi-crappy selection of stores where I live, so I don't have personal experience to help keep this straight in my head.