AMEX- Is this true?

[scarygirl]

I was approved for a AMEX BLUE card with a $5400 limit. The reason why I applied is to take advantage of a 4.99 percent balance transfer. This rate is good for the life of the loan. I was just told that Amex requires you to pay your balance in full each month. Is this true? I've never had an AMEX card and would appreciate any and all advice.

[safari]

Amex Blue is a credit card, unlike other Amex cards, which are charge cards. With a credit card you can only pay a minimum every month (not that I would recommend it), while with a charge card there is no interest rate, but you have to pay your entire balance every month. If you're planning to take advantage of the 4.99% balance transfer offer, you should not use that card to make any purchases because the interest rate on purchases will be higher, but your payment will always go toward the balance with the lowest interest rate first, so essentially you will be paying off your transferred balance, while being charged high interest on purchases.

[scarygirl]

Thanks for the education. I consider myself to be quite credit literate and I never realized there was a difference. My plan is for a one time balance transfer and to pay the balance as quickly as possible.

I'm very well versed on the tiered interest rate, purchases vs. cash advances for example. I have no desire or intention to rack up purchases.

Thanks!

[disneysteve]

Another point to keep in mind is that your credit score is, in part, determined by your credit utilization ratio. The general recommendation is to keep at 30% or less. So if you get a card with a $5,400 limit, you don't want to charge more than about $1,600 to that account. If you put a lot more on it, you may negatively affect your credit score.

[th_tan]

I have an Amex IN NYC card, it does not require you to pay it back in full each month either.

[PRICEPLUS]

4.9 percent fo rthe life of the loan is great! Just remember not to charge anything else on the card. You pay off lower interest money before higher interest loans! That is how they nail you! Have a care!

[click4credit]

AMEX do not always make it clear on their website the difference between charge cards and credit cards. Luckily you've applied for the right type in the form of a AMEX Blue credit card.

[scarygirl]

I'm glad someone reminded me of the difference. I knew that, but it's been a while since I thought about it. Either way, I hadn't transfered the balance yet, which is a blessing. Can't wait to do so though. I have no interest in the card other than the one transfer. I've stopped using my cards completely.

[hrbatyfan]

Hi,

I pay off my balance in full every month, so having a charge card is something that might make sense for me.

Can someone tell me the benefits of having a charge card like a regular AMEX card?

Thanks!

[catlinye_maker]

Originally Posted by hrbatyfan

Hi,

I pay off my balance in full every month, so having a charge card is something that might make sense for me.

Can someone tell me the benefits of having a charge card like a regular AMEX card?

Thanks!

The regular AMEX charge card charges an annual fee. If you sign up for the rewards program (another annual fee) they offer rewards points. They offer purchase protection (if you buy something and it is lost or damaged within a certain timeframe the purchase price can be refunded) and ticket protection (similar deal with event tickets) both of which have some limitations. They offer rental car insurance. There is also a program where larger purchases and travel can be paid over time; I don't find this generally beneficial because the interest rate is quite high (18.24% at last check.) I believe that all of these programs vary from card to card, so you'd need to look at which card you are getting and what it specifically offers.

The two major benefits that I can see for the AMEX card are the rewards points, which can be transferred to many airline and hotel rewards programs, and the emergency service that AMEX provides. We frequently use our AMEX points to get free airfare so that I can accompany my husband on business trips. Last year we used a ton of points to get a week's free lodging in Orlando for a trip to DisneyWorld.

The emergency service is priceless, IMO. On a trip to England several years ago, my MIL broke (crushed) her knee. The British doctors were talking about amputation/surgery that _might_ leave her able to walk after 6 months in bed, etc. One call to AMEX and they got their own doctors involved, reviewed her case and agreed with me that she'd be better off having surgery in the states, argued with the hospital until they agreed to stabilize and release her, argued with British Airways to allow her to fly home, set up ambulance transportation to and from both airports, etc. etc. We paid for the services provided [Edit to clarify - we paid for the ambulance transportation and the upgrade to first class so that BA would consent to the flight - we paid nothing to AMEX for the emergency service], but at a very stressful time I had someone that I could call at any time who made all the arrangements for the best possible care for her. These days she walks with a cane, but she walks easily, and the surgery and recuperation here at home went much, much better than the British doctors said was possible.

[hrbatyfan]

That's really good information, thank you!

The interest rate is really poor, but I guess I would hopefully never use it considering I am partly interested in this card because I do not carry balances.

The rewards sound great. I charge a lot of things for work and get reimbursed, so that's definitely a good use.

[disneysteve]

One downside to AMEX is that it isn't nearly as widely accepted as Visa. I've been out numerous times at business functions and the host wanted to pay the bill with his company AMEX card only to find that the restaurant only took Visa, MC and Discover.

[Ima saver]

I had an amex that paid us back 1% of all we purchased once a year. But I switched to a GM visa that pays us back the 1% whenever we accumulate $100 cash back.