How much does carrying a balance on a charge card hurt your FICO score?

[mbauza2219]

Hello,

I have 7k balance on my charge card....and then 7k on a credit card (maxed out)?

I'm curious, which one tanks your score more? Carrying a balance on a charge card OR carrying a balance on a credit card?

I have about 8k cash to pay, and wanted to see which one would boost my score more. Then within 1-2 months, I can pay the second one.

Common sense does tell me to pay off the charge card because of the higher interest. However, I wanted the credit boost because I will be purchasing appliances and applying for credit etc. and thought that maybe that would help.

Overall, I am curious how charge cards impact your credit score.

Thank you!

[Thomas_Thumb]

Carrying a balance on a charge card will not factor into revolving credit utilization. Charge cards typically are listed as having no preset spending limit but do have a pay over time (POT) limit. They are classified as "open accounts" and have "one month terms". As a result, you won't experience any revolving utilization scoring penalties associated with balances on charge cards.

However, as you mention, charge card POT interest rates are far above many/most revolving credit cards. Unless you need a more immediate score boost, I'd save on interest payments by paying off the charge card first.

Side note: A maxed out credit card along with elevated aggregrate revolving utilization could be depressing your score more than 30 points. Card utilizations at 80% and above are viewed as maxed out by Fico and score is penalized accordingly.