The terms “charge cards” and “credit cards” are sometimes used interchangeably, but these two payment cards have distinct features and impact credit scores in different ways.

What is a charge card?




Who issues charge cards?


Today, one provider dominates the charge card market. “There are almost zero charge cards outside American Express,” David Robertson, publisher of The Nilson Report, said in an e-mail statement.

Why use a charge card?


As with credit cards, charge cards may come with rewards — for which you’ll pay an annual fee. For example, American Express charge card holders get access to the Membership Rewards program.


Who should apply?

Charge cards usually require good to excellent credit.



FICO credit score


In previous editions of the FICO score, charge card balances did factor into utilization. The “high credit” for the account was used in place of the limit. “High credit” refers to the largest monthly balance a cardholder has had during a period of time.


In other words, the high credit on a charge card shouldn’t impact utilization in most cases. “We believe that the majority of scores that are being used out there currently exclude charge cards from utilization,” says Barry Paperno, the consumer operations manager for

As for the scores sold to consumers through, the TransUnion FICO score still includes charge card balances in utilization. The firm plans to switch out the old model for a newer version that excludes charge cards from the debt ratio.
