What is a Charge Card? – Episode #41
How is a charge card different from a credit card?. A charge card must be paid off in full each month. A credit card can revolve its balance from month to month.
- American Express offers charge cards, credit cards and pre paid cards.
- VISA and MasterCard brands are only on credit cards, debit cards and pre-paid cards.
Probably the most well known charge card is the American Express Green Card. It was launched almost exactly 50 years ago on October 1, 1958. 250,000 cards were printed, on paper, at launch and become a big hit. The annual fee was $6 [Diner's Club which launched in 1950 had an annual fee of $5].
Charge cards are a nice way to build your credit score, because they have to be paid off each month. They teach responsible use of plastic. Be careful though, the plastic card business has become more complicated and American Express has dozens of products to choose from, some of which are charge cards and some of which are credit cards. Make sure you read the fine print before you sign up.
With their flexible limits that some charge cards have, this can help build your credit score as you can show responsible spending and payment for high amounts and those records can lead you to ask for higher limits on your credit cards.
Source: American Express
Good Credit Scores According To The Experts – Episode #40
July 1, 2008 by VideoCreditScore-Andy
Filed under Episodes, Favorites, Top Posts
What is a Good Credit Score?
We take a look at what other experts, industry folks and pundits think a good credit score looks like. My opinion is that a 760 and above is a great score.
We looked at quotes from all over the internet and discuss why a great score has changed over the past 5 years.
“While it’s theoretically possible to score at 850, most scores top off at 825, you can’t get much higher” -Maxine Sweet, VP public affairs, Experian
“There is no reason to go from a 775 to an 850, because you’re going to get the same rate”
- Linda Sherry, spokesperson, Consumer Action
The median score is 723 with most lenders requiring a score of 760 to get the best rates (the highest score is 850, but only 13% of people’s scores beats 800). – Kim Langford, Kiplinger.com
Shortfalls from excellent credit, defined as a FICO score of 800, have become very expensive. Even a score of 780 can cost a rate premium of 0.125 percent. The premium on a score of 700 is about 1.125 percent, and on a score of 600 it can be a prohibitive 2.625 percent. -Jack Guttentag, Inman News, Monday, February 23, 2009.
Today, a score of 740 or 750 will get you an account but might not qualify you for the lowest interest rates – Bill Hardekopf, of LowCards.com
“FICO score over 780 is good enough” – Don Taylor, Ph.D., CFA, CFP – Bankrate.com
“780 and above- If your credit score is within this range then, it is said to be excellent credit score and lenders will have no issues in giving you credit.”
“Today, however, all of the mortgage-qualification standards have been elevated. So you would probably need a 720 or above to qualify for the best rates.” – Home Buying Institute
“Generally speaking, a score of 700 or more gets you the best credit and fast loan approvals.” – Kathy Kristoff, LA Times
“A score above 700 is considered high.” – eHow.com
“A few years ago, people could get by with credit scores of 700 to 730, no problem. Now, if you are not north of 750, you won’t get the best rate, and you may not even get a loan at all.” – Sheryl Garrett, founder of the Garrett Planning Network.
The reality is the a “great score” is a bit of a moving target. At one point is was a 720 in many lenders eyes and now some lenders are saying an 800 is the top score in many cases. Of course, the other factors are important too. Someone with a 760 is willing to put 50% down vs. an 800 willing to put down only 20% might look more attractive to the lender. Others vary in their opinion, but even if someone else likes a 720 or a 740, wouldn’t you prefer to have a cushion? One thing is certain, you must be willing to work towards a good credit score. It’s not happening by accident in most cases any more. Understanding the credit system enough to know what’s hurting your score has never been more important.
In addition, we all have a different definition of good versus great. I tend to skew towards a this definiton a good credit score gets the best rates while a great credit score allows for lots of leeway for events. Someone with a 760 has a good credit score as they can usually get the best rates, but someone with an 800 FICO score has a great credit score.
