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Charge Account vs Credit Card ?

jetsfan2013
Frequent Contributor

Charge Account vs Credit Card ?

I was browsing on my Credit Karma page earlier, and just noticed I have two accounts that in the description field are listed as "charge accounts". My Ikea (Comenity Bank) and my Samsung (TD Bank) reflect that. I have a physical card for Ikea but not Samsung. In both cases, I took advantage of 0 percent offers of one purchase, and have since paid off those items, so roughly 7.5K of available revolving credit sits unused.

 

Is having a charge account a negative vs. another traditional credit card reflecting?

In the garden until Summer 2021
Message 1 of 5
4 REPLIES 4
SouthJamaica
Super Contributor

Re: Charge Account vs Credit Card ?


@jetsfan2013 wrote:

I was browsing on my Credit Karma page earlier, and just noticed I have two accounts that in the description field are listed as "charge accounts". My Ikea (Comenity Bank) and my Samsung (TD Bank) reflect that. I have a physical card for Ikea but not Samsung. In both cases, I took advantage of 0 percent offers of one purchase, and have since paid off those items, so roughly 7.5K of available revolving credit sits unused.

 

Is having a charge account a negative vs. another traditional credit card reflecting?


1. I have never figured out why they use the term charge account, rather than credit card account, for some store cards like that.

 

2. No it's not a negative in terms of your FICO scoring.

 

 


Total revolving limits 677500 (584500 reporting) FICO 8: EQ 758 TU 777 EX 749

Message 2 of 5
RobertEG
Legendary Contributor

Re: Charge Account vs Credit Card ?

There are three general types of credit.

Installment credit is credit that is granted once for a set amount, and then repaid in installments at set dates.

Revolving credit is credit for which the consumer is granted an approved limit, and has the discretion to then accrue debt up to that approved amount.  Monthly payments then "revolve" around the current balance.

The third type is "open" credit which is not the same as an open account.  It is credit that can vary each billing cycle, but is due in full when billed.

 

Credit cards are revolving credit.

Charge cards usually refer to open type credit that is due in full when billed.

Message 3 of 5
Revelate
Moderator Emeritus

Re: Charge Account vs Credit Card ?


@RobertEG wrote:

There are three general types of credit.

Installment credit is credit that is granted once for a set amount, and then repaid in installments at set dates.

Revolving credit is credit for which the consumer is granted an approved limit, and has the discretion to then accrue debt up to that approved amount.  Monthly payments then "revolve" around the current balance.

The third type is "open" credit which is not the same as an open account.  It is credit that can vary each billing cycle, but is due in full when billed.

 

Credit cards are revolving credit.

Charge cards usually refer to open type credit that is due in full when billed.


That might be the standard but individual reporting meh.

 

There are a lot of Open / Charge accounts which are revolving tradelines.

 

An Amex charge card works basically like a NET 30 account in the business world, that's PIF, but on a personal credit report that's seen with a term equal to 1 month, and that's nearly Amex only I think.  There just aren't a lot of consumer accounts which work like this.




        
Message 4 of 5
Birdman7
Super Contributor

Re: Charge Account vs Credit Card ?

I have a couple revolvers mislabelled "charge."
Message 5 of 5
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