Credit Card vs Charge Card

[Thomas_Thumb]

AMEX charge cards are a type of credit card. However, they have 1 month payment terms and are classified as open accounts NOT revolving accounts. These AMEX accounts are NOT included in aggregate revolving account utilization. They are also excluded by Fico on an individual revolving account utilization basis nor do they count as activity for revolving accounts. However, the cards are a type of credit account and Fico considers them when counting number of accounts with balances.

Just to clarify, AMEX does also issue different credit cards that are revolving accounts. Many of them are no annual fee with some type of cash back.

Front end software used to summarize account types on reports can be confusing. The type of account is classified/reported to the CRAs by the issuer. The classification stored in the CRA file is used by Fico to determine how an account is used in a given scoring model. Unfortunately, report front end summaries do not necessarily reflect classification.

There is evidence that some store cards and credit union credit cards may not be seen by Fico as revolving accounts. In those cases I suspect the card issuer coded the account as something other than revolving. Some store only cards used to be charge cards with PIF terms. Perhaps account coding was never changed when such cards became revolving accounts?

[AndySoCal]

@credit8502020   A true charge card the balance is due in full each month. In other words you cannot carry a balance month over month. Also their is no interest rate for balances. If you can pay the balance off over time with interest is it a credit card not a charge card. Some Amex cards a charge cards. NPSL cards that have interest rates are credit cards with a feature the allows you to go over your limit. But the terms will tell you what you must pay when you go over the limit.

[Brian_Earl_Spilner]

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@AndySoCal wrote:

@credit8502020   A true charge card the balance is due in full each month. In other words you cannot carry a balance month over month. Also their is no interest rate for balances. If you can pay the balance off over time with interest is it a credit card not a charge card. Some Amex cards a charge cards. NPSL cards that have interest rates are credit cards with a feature the allows you to go over your limit. But the terms will tell you what you must pay when you go over the limit.

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NPSL cards don't have limits, hence being No Preset Spending Limit. You're talking about their Pay Over Time limit which is internal and not reported. All charges over $100 are automatically put towards that limit. Anything over that limit, or charges under $100, is due the next month along with the minimum payment for charges in the POT balance. It's still reported as a charge card with no limit. You just have added flexibility for paying it off. 

[RobynJ]

I know Care Credit is definately considered as a credit card and used to calculate utilization. I have 3 cards with a balance, 1-AU BCE with a $7 balance (I get a 16 point hit everytime I don't allow a balance to post on my AU card), 2- BCP with a $30 balance, and 3- Care Credit with a $5576 balance (showing a 37% util on this card). The aggr util (9%) is showing this amount included so it has to be considered a CC not a Charge Card. 

[AndySoCal]

@Brian_Earl_Spilner  At one time a credit card that was NPSL. I could spned as much as I wanted. The card had what I would call a shadow credit limit for the lack of better term.  For example the shadow credit limit was $8,000.  If the balance was over the shadaw credit limit. I had to bring the balance under the shadow credit limit when I paid the monthly credit card bill.  When the card would report to the credit bueau it would not report the credit limit. If you carried a balance month over month you paid interest.  I either closed the card or they eventually  started reporting the credit limit I forget which. The credit card was sort of hybred between a credit card and a charge card. If it is a true charge card the account type will be Open which means balance due in full net 30 days. The terms field could also show 1 mon for charge cards  If the account type is revolving it is a credit for scoring purposes.   You can use the example below one  my collection of closed credit cards which is a revolving credit card no matter what the loan type says.