My comments in blue below.
@Anonymous wrote:
Does a charge card affect the diversity of credit metric?
A long while back, Thomas_Thumb and others toyed with the idea that having both a charge card and a true credit card gave you a bit more Credit Mix benefit than credit cards alone. I'd like to hear that TT thinks now.
Also, I've read that it's best to report a small balance on just one out of multiple credit cards, but how does having a charge card affect that advice (if at all)?
Great question. If FICO punishes for having a utilization of 0.000%, then the one card that shows a balance must be a true credit card. (Since the charge card won't be included in FICO 8's util calculation.) If on the other hand the penalty is triggered instead by having all cards at $0, then having the charge card report the balance would work, even if all your credit cards showed $0.
Do any models punish reporting a balance or reporting $0 on a charge card?
Aside from the questions above, no.
Should I try to have my new charge card reporting $0 each month given I already have a credit card consistently reporting a balance (under 9%)?
I think the answer is yes, but only if you need to squeeze out every extra point from FICO 8 for that particular month. My feeling is that you have that charge card for a reason. Many charge cards come with an annual fee. If you are frequently not using it, then you should consider canceling it (assuming it comes with an AF). Remember that FICO doesn't include your charge card as part of the util calculation. Of course you could use it and then constantly pay it to $0 before statement date, but that may be a headache.
Note, however, that old models do something with charge cards almost indistiguishable from utilization. They basically treat your "High balance" as the credit limit. HB is the highest your balance has ever been. Thus if the highest your balance has ever been is $1120, you will have a credit limit of $1120 in the old models. That's why some people use to drive their charge card to a high balance just once. That's a terrible idea if it causes you to buy things you don't need that month (e.g. a vacation you might not otherwise take) -- keeping your spending as low as possible should always take precendence over games with credit scores.
Thanks for any info/advice!
