Amex Charge Card's impact on Credit Score - Help

American Express forum. Talk about AmEx credit cards like Blue, Gold, Platinum, Centurion, and more.
6 posts
Kicker
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Amex Charge Card's impact on Credit Score - Help

Postby Kicker » Mon Aug 13, 2012 4:02 pm

Hey everyone. I received my Green Card back in June and have been paying on the "please pay by date." It just occurred to me if this card will improve my credit score? I bought a mac book for a thousand dollars and just paid it off. surely it would help right?

Thanks a lot!
My Wallet:

Wells Fargo Visa - $1200 (Obtained 2011)
AMEX Green - NPSL (Obtained 2012)
Chase Freedom - $3000 (Obtained 2012)
Citi Diamond Preferred - $2000 (Obtained 2013)


FutureBillionaire
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Postby FutureBillionaire » Mon Aug 13, 2012 5:15 pm

Having the account open and paying on time will help your score. You card won't count towards your utilization. You will want to get a revolving card so you can show lenders that you know how to manage that.
Gas: Discover It, Penfed Platinum Rewards x2, Chase freedom, Citi TYP
Plane tickets: CSP
Groceries: AMEX BCP, Penfed Platinum Rewards,Citi TYP
Clothes: Express, Amex BCP, Discover IT
Amazon: Citi Forward, Cash +
Restaurants: Citi Forward, Chase Freedom, Discover IT, CSP
Hotels and other travel: Discover Escape, CSP
Movies: BofA travel rewards visa signature(fandango), Discover IT, Citi Forward, Freedom
Bars, clubs, tomfoolery: CSP, Citi Forward, Discover IT, Freedom
Balance transfers: Kroger 123 rewards
Bill Pay: Chase Ink Plus, Citi Forward
Everyday spending: Bofa Accelerated cash rewards amex, Discover Escape

Kicker
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Joined: Tue Jun 12, 2012 5:37 pm
Location: California

Postby Kicker » Mon Aug 13, 2012 5:25 pm

Thank you very much for your help. Is this passage outdated?

Since a charge card has no pre-set spending limit, the highest balance ever charged on the card is considered your "credit limit" when determining your credit utilization ratio. If the most you've ever spent is $1,000 and your credit report is pulled at a time in the month when you've already spent $750 on the card, then the result is a 75 percent utilization ratio! A regular credit card with a $10,000 credit limit would yield a utilization of only 7.5 percent —quite a big difference.
There's nothing wrong with wanting to add a charge card to your wallet, but keep in mind that you will generally end up with a limit that looks really low and a utilization ratio that's way too high. And as a result, your credit score may suffer.


There's a lot of articles that pertains to that idea about charge cards..I also have a 800 CL visa that I use regularly as well.
My Wallet:

Wells Fargo Visa - $1200 (Obtained 2011)
AMEX Green - NPSL (Obtained 2012)
Chase Freedom - $3000 (Obtained 2012)
Citi Diamond Preferred - $2000 (Obtained 2013)

Crashem
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Joined: Fri Mar 09, 2012 9:29 am
Location: San Francisco, CA

Postby Crashem » Mon Aug 13, 2012 6:00 pm

Manual review allows potential lenders to see what you spend on your charge card as much as any regular credit card. However, in all modern FICO scoring models, charge card balances are ignored in utilization calculations. Don't think of this as a negative. It is a positive as you can use the card and not worry about it impacting your credit score (aside from the slight ding you get for any a card with any balance). I guess you can look as negative as it does not have limit that could be used to make your total credit line available higher and therefore utilization lower. However, with FICO 98 scoring models, the above statement of using the recent high balance as limit is correct but few lenders still use this model and it is decreasing everyday.
Amex Centurion, Amex Platinum, Amex BCP 8k->24k (5/23/12), Amex TE 15k, Cap One 1.5% 15k->20k (8/7/13), CSP 25k, Chase Palladium 100k, Citibank AA 35k (AU), Firestone 1.8k->2.2k->2.4k (8/20/12), JFCU Jloc 30k, PenFed Plat Rewards 30k, SF Fire 30k, US Bank Cash+ 25k

Kicker
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Posts: 51
Joined: Tue Jun 12, 2012 5:37 pm
Location: California

Postby Kicker » Mon Aug 13, 2012 7:37 pm

Oh I see thank you crashem. so ultimately, using this card will help increase my credit score right?
My Wallet:

Wells Fargo Visa - $1200 (Obtained 2011)
AMEX Green - NPSL (Obtained 2012)
Chase Freedom - $3000 (Obtained 2012)
Citi Diamond Preferred - $2000 (Obtained 2013)

Crashem
Centurion Member
Centurion Member
 
Posts: 538
Joined: Fri Mar 09, 2012 9:29 am
Location: San Francisco, CA

Postby Crashem » Mon Aug 13, 2012 8:34 pm

Yes as much as any other revolving account will help. As I talked about earlier, for the utilization portion of modern FICO scoring models, it will neither help or hurt. You can consider this an advantage or disadvantage. However, any balance whether it be $1 or $1 million will equally hurt a little as every account with a balance hurts your score a bit.
Amex Centurion, Amex Platinum, Amex BCP 8k->24k (5/23/12), Amex TE 15k, Cap One 1.5% 15k->20k (8/7/13), CSP 25k, Chase Palladium 100k, Citibank AA 35k (AU), Firestone 1.8k->2.2k->2.4k (8/20/12), JFCU Jloc 30k, PenFed Plat Rewards 30k, SF Fire 30k, US Bank Cash+ 25k



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