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.
