Since a charge card doesn't have a hard limit most scoring models can't report utilization on it. I don't think it even reports a monthly payment since their isn't a standard minimum. A lender would have no idea if you're close to the internal max or not. The only way it would affect you is if they feel you have too much debt overall.
@Anonymous wrote:Has anyone been denied a credit card with another issuer while having a 2k+ balance reporting on their Amex charge card? I usually pay right after my statement cuts and didn't know if I should pay before statement date if I plan on applying for another card from different issuer next month?
I was concerned paying twice this month as two payments (one after my previous statement + current balance would be 2k + 2k would be 4k). 4K in payments in one month would be 4x12=48 in a year and my income is only 96. Didn't know if that would trigger a financial review being 50% of my income?
I just read horror stories of people paying too much and getting reviewed.
Hope my post was clear and made sense. My only other option would be to pay at statement close again and just not use the card a whole month to report 0.
ps- I'm one of those rare people that likes to let my balance report and pay after my statement generates.
I had 2k on my FBNO card when I applied for my Citi Custom Cash and it got approved instantly. I pay my cards in full in time to avoid interest charges but refuse to pay them too early just so it looks like I never use anything. I mean, for optimal Fico scores you maybe want to be lower, but unless I need to apply for a mortgage I don't worry about that.
@Brian_Earl_Spilner wrote:Since a charge card doesn't have a hard limit most scoring models can't report utilization on it. I don't think it even reports a monthly payment since their isn't a standard minimum. A lender would have no idea if you're close to the internal max or not. The only way it would affect you is if they feel you have too much debt overall.
@Brian_Earl_Spilner My understanding is that AMEX reports the balance as the card limit for charge cards(?) I read somewhere around here that people were seeing their cards showing maxed out on credit reports.
@CreditPacMan wrote:
@Brian_Earl_Spilner wrote:Since a charge card doesn't have a hard limit most scoring models can't report utilization on it. I don't think it even reports a monthly payment since their isn't a standard minimum. A lender would have no idea if you're close to the internal max or not. The only way it would affect you is if they feel you have too much debt overall.
@Brian_Earl_Spilner My understanding is that AMEX reports the balance as the card limit for charge cards(?) I read somewhere around here that people were seeing their cards showing maxed out on credit reports.
No, I don't remember the version, but it takes your highest balance ever and reports that as your limit. If your highest balance ever is 2k and you have a 2k balance every month, it will show as maxed. If your highest is 10k, but you usually only spend 2k, it'll show your utilization as 20%. Moot point though as it's an old scoring model that almost nobody uses anymore.
@dragontears wrote:
@Brian_Earl_Spilner wrote:
@CreditPacMan wrote:
@Brian_Earl_Spilner wrote:Since a charge card doesn't have a hard limit most scoring models can't report utilization on it. I don't think it even reports a monthly payment since their isn't a standard minimum. A lender would have no idea if you're close to the internal max or not. The only way it would affect you is if they feel you have too much debt overall.
@Brian_Earl_Spilner My understanding is that AMEX reports the balance as the card limit for charge cards(?) I read somewhere around here that people were seeing their cards showing maxed out on credit reports.
No, I don't remember the version, but it takes your highest balance ever and reports that as your limit. If your highest balance ever is 2k and you have a 2k balance every month, it will show as maxed. If your highest is 10k, but you usually only spend 2k, it'll show your utilization as 20%. Moot point though as it's an old scoring model that almost nobody uses anymore.
It is "mortgage" scores (EQ5, EX2, TU4) and their industry variants that treat charge cards this way
Thanks for the clarification @dragontears , I thought it was only classic 98 or similar scores that did it.