irseg

What is the point of a charge card? I got an offer from AmEx the other day for one. You can run up all the charges you want on it, but when the bill comes it's all due at once. It also offered a rewards program, but you'd have to spend $5000+/yr on it just to break even after the annual fee.

Is there any real point to having one? Only thing I can think is it might be a good credit booster having access to an unlimited charge account, but other than that it looks to be pointless. If I can't afford something now, I'll either wait for the next time I get paid or put it on a credit card and be able to have a longer time to pay it off if necessary.

krwlz

It makes it possible to not carry cash at all... Thats pretty much it.

onetime2

Well, like askrwlz said, not having to carry a ton of cash for purchases is nice. Extended warranties offered by some cards, the rewards (frequent flier miles, cash back, etc) can be nice. Help when it comes to a bad transaction (say you buy a stereo that doesn't work, you can dispute the charge and possibly get your money back without the store's consent). Can be good for emergencies (car breaks down in West of Nowhere, Utah and you need it fixed pronto but you ain't got the cash now but you can get it by the time the bill comes due). It can limit the level of debt some people develop as part of the "credit" card problem is that people can build up high balances slowly over time and get to a point where it will take them years to pay it down.

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denim

He's specifically asking about AmEx, which doesn't have a lot of those features, Onetime2.

Supposedly, an AmEx card has a certain cache, but I don't see it. The main benefit of it is that you are forced to pay it off each month. That's a benefit, as you don't carry a balance and don't pay some nasty finance charge. It makes you stay w/in your budget. And for such a nice annual fee, too! Oh joy!

IMHO, you can do that with a normal credit card, but you have to enforce it yourself. And you can find them with no annual fee, too. And if you pay it off each month, you don't care about the interest rate.

irseg

This card offer I got offered purchase protection, extended warranty, and some other similar stuff stuff. But so does a credit card that I already have, as well as a 30-day grace period and no annual fee. Guess it's basically just a good budgeting tool, although I think a debit card+checking account would work equally well in that situation.

onetime2

You're completely wrong. All the benefits I named are available with the Amex.

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onetime2

Straight budgeting, yes a debit card will probably do equally well. But if you need to submit expenses to a job or a client or something, having it all on one sheet from Amex is better than possibly exposing your banking habits. The debit card also doesn't offer the same fraud protections, isn't accepted for everything (like renting a car), and doesn't offer any of the other features of an Amex card.

That all being said, I've only had a corporate Amex card and have never even considered getting one for personal use.

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denim

I sit corrected!

I had a green AmEx for about 5 minutes back around 1986. Told my Dad. He told me to destroy it. He was right, too.

onetime2

Yeah, the credit/charge/debit card game has changed a lot since then. It's becoming more and more competitive.

Off topic, but interesting, is the fact that Walmart may not accept Mastercard debit cards in the near future. It seems they aren't happy with the higher fees from the debit card side of the business when compared with the charge card side. Visa Debit cards has capitulated and lowered their rates but Mastercard has been standing firm (at least up till the last article I read about them a month or so ago).

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ratbastid

Ah, but it's WalMart, so they'll get what they want. They always do.

Can you imagine a credit card processor saying, "you know, for the price of 0.05% of those transactions, we're willing to give up WALMART'S business....." I certainly can't imagine them saying that. That's why WalMart owns the whole fucking world right now.

Ripsaw

If you are irresponsible, charge cards will bury you in a mountain of debt you will never, ever be able to escape. You would be better off changing your name and moving to another country. However, if you spend within your means, or carefully budget out your payments, then you will be able to obtain services or things that are out of your immediate reach. My personal benefit is a minute amount of cash back at the end of the year, and the security of not having to carry tons of cash on me when my fiance and I go out for those classy dinners I am so fond of. Hers is airline miles, for which we have already covered a flight to Hawaii with. Honeymoon, here we come (Blackout dates be damned).

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Boo

AmEx sucks, so does Discovery.

The company I work for won't even take them because of high fees.

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onetime2

Generally right about Walmart, but if Mastercard holds firm and it impacts enough of Walmart's customers, it will hurt them. Walmart is increasingly finding itself competing with places like Target. And which is easier for the customer, switching stores or switching banks?

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quadro2000

I have to agree with Ratbastid that Walmart will win out on this one. As for Walmart competing with Target, as I understand it, Walmart deliberately placed their stores outside of urban areas, therefore making them accessible to people who didn't live directly in a big city, and making it their only viable option. There was a great article in Playboy a few months ago about the Walmart empire....they really do rule the world.

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BentNotTwisted

I think it's the snob factor people are after. If you pay a high annual fee and get very little in return it's supposed to mean you are better than others, I guess.
An AmEx warning. They tout a 'No fixed spending limit' in their commercials. Their spending limit is based on your average number of transactions. That means if you spend and pay off an average of $500 a month on their card, that's your limit, or somewhere near your average spending rate. I had a friend who used his AmEx almost exclusively. I think he liked the perceived prestiege of using the card. Anyway, he took a vacation in the Bahamas and just before he left he made several large purchases, luggage, clothing, etc. He knew his was near or slightly above his monthly spending, but he kept thinking of AmEx's advertisment regarding no fixed limit. When he arrived at his hotel and tried to used the card it was declined because he had reached the limit. He called AmEx right then and asked them to increase his limit. This is a person who had been a customer of AmEx for many years and never had a late payment. In their infinite wisdom they declined to temporarily bump the guy's limit and he had to wire money (with additional charges involved) directly from his bank account. He was so pissed he quit using AmEx altogether and will never use their card again.

Rodney

It's a travel card with a gentleman's limit; that is no say, no fixed limit. It's not for budgeting; it's for having the ability to spend large amounts of cash, practically anywhere in the world, without hassle and without carrying any on you. If you need that, youmay need an Amex card. If you don't, you don't need it.

Debit cards are good, but they don't do the job when you're paying for a $3000 travel package or a $4000 video camera over the phone. Their limits are too low. Even a green Amex card will get you what you need in these cases.

I do use debit cards for everyday purchases, but my bank's daily credit limit on such cards is $700. For the occasional big ticket item, I use the Amex.

j8ear

Amex is a great card for a number of reasons. Automatic rental car insurance, and travelors insurance anywhere in the world, for one. In Ireland for example this can double the daily rental price. NOT even available on a Visa in Ireland.

Buyer's satisfaction. Amex will over ride a store return/exchange policy, and automatically covers theft and other things on new purchases for 30 or sixty days.

I went to Best buy, who wouldn't accept my crappy ink cartridge return because it was day 45 on a 15 day refund item (it was a two cartridge combo pack, and I didn't find the broken half for a while).

I said really...called AMEX on the phone, told them the deal, and they said fine, we wont pay the charge. No problem. Best buy reluctantly took the item back then.

A friend once bought a PC at circuit city, put it in her car, went into safeway to pick up some groceries, and bam...PC swiped. No problem. Amex took care of everything, no charge to friend.

Big dinners, travelling, and protection from sneaky and/or shadey retailers. These are really the best reasons to use AMEX.

-bear

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irseg

I have a MasterCard that gives all those "exclusive" benefits except for travel insurance. Rental car insurance, warranty/return extension, and some other stuff. Plus I don't have to pay it all back every month, and there's no annual fee.

It's easy to get your money back with any credit card. Too easy, in fact. I've worked for various ISPs, and there are a LOT of assholes who'd buy the service, use it for a few months, claim they never used it, and do a chargeback for everything they paid. We'd rebut by showing usage logs proving they used the service, and get our money back from about half the time. Credit card companies are VERY slanted in favor of the consumer because they're the ones paying so much interest.

Cynthetiq

I fly delta and Amex has Delta frequent flyer miles for each dollar I spend, sometimes promotions give 2 miles for each dollar.

I use it exclusively for all my normal activities, and my wife and I honeymooned touring europe with ALL frequent flyer purchased tickets.

even paying the annual fee.. we're still ahead of the game.

BTW.. those that don't know there's an Amex BLACK card... only given to those with obsence amounts of $$$.

Jerry Seinfeld was the first one to get one, and it's INVITATION only.

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onetime2

Little doubt they will win in the short term, but Mastercard may be able to get more favorable terms than Visa caved in to.

Walmart absolutely has some innovative business practices, but, not unlike Home Depot, they are succumbing to competition. In years to come there will not be quite as much distance between them and their nearest competitor. When that shift occurs, it will be a bumpy road for Walmart (still a very profitable one but it won't be nearly as easy for them to make money) as all the people they used their hard negotiation strategy on will remember it.

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Cynthetiq

i forgot to add...

I don't want to carry ANY balance...

DEBT FREE is the way to be...

Only debt worth carrying... Mortgage, car payments, and student loans.

only other time is when there is ZERO percent interest and I have the cash on hand to buy it outright, which I'll do the purchase just to keep the liquid cash handy.

life situations change.. when you think that you have "time to pay it off" some emergency of sorts from unplanned sudden trips, layoffs, unexpected car maintenance, etc. shows up and boom.. you're behind the eight ball suddenly...

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quadro2000

Here is some info on the card Cyn is talking about...

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arch13

Exactly.
As a college student my peers look at me all funny for carrying amex instaed of a credit card, but when i ask them they tell me they have debt loads as bad as 5000.00 and i get to smile and say that i have a debt load of 500.00 on my visa. I value the benifits it gives me such as replacement of plane tickets if i miss a flight and the fact that i never incure long term debt was the draw for me. I live within my means and rarley buy anyhting i can't afford on two days salary.
In my opinion, to many people are willing to charge what they would never buy if they had to pay hard cash for it.

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raeanna74

I've heard that when you use them responsibly they are helpful in restablishing your credit when you've had trouble with it by showing that you are responible. You also don't have to deal with the interest charges that someone with bad credit would have to pay a credit card.

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Paq

i have had several credit cards, never missed a payment, never carried a balance, etc, and never have a fee.

They are definitely wonderful if you can budget yourself, you just can't spend more than you have or will have. I keep a largish savings account as well and just pay off the balance monthly as i am not going to pay interest unless...well, no, i hate paying interest, it's like paying an extra fee for owning something

But now, i carry an Amex Blue card, basically just a credit card wtih no annual fee and has amex's really good customer service behind it. seriously, you can call and a person actually answers the phone...a real live person, none of my other cards have had that.

I also carry a visa platinum that i've had since freshman year of college, and a Mastercard platinum that i've had for about 4 yrs.

They have never costed me anything and i have a reallllly good credit score bc of the massive amounts of use on them with a great record of paying them off monthly.

so no, i would not get an Amex gold or green or platinum card that carries a yearly fee. There just isn't a point to me.

I did find out that amex cards are preferred/honored in most foreign countries so you'll find them more with people who travel a lot. however, they do charge and extraordinarilly large percentage to businesses for accepting them. Like the local frame shop is charged 3% by both visa and MC, but 8% for Amex cards..

just learn how to budget your money, you can do just as well with a checkcard and checking account..

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