Nonlinear structural equation models within the frequentist framework were developed to work with continuous items. Applied researchers who usually work with Likert-type items choose between two strategies to estimate such models: treat items as continuous variables or create item parcels. Two Monte Carlo studies were conducted to evaluate the effects of each strategy on estimates and Type I errors for models with interaction and quadratic effects estimated using LMS. The first study evaluated the effect of asymmetry type and item quantity. The second assessed the use of item parcels and parcel configuration under equivalent conditions. Results reveal that treating items as continuous variables is not problematic when item categories are symmetrical or have opposite-direction asymmetries; however, meaningful parameter bias and increased Type I errors are produced in the case of same-direction asymmetry. Use of parcels does not overcome these problems. The results are discussed to provide recommendations for applied researchers.