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  1. #1

    American Express Charge Card vs. Credit Card: Pros and Cons

    American Express has quite a few cards in two main categories. First, there are the charge cards: the prestigious AMEX Platinum, as well as the American Express Green and Gold cards, the Premier Rewards Gold card, and ZYNC from American Express. (Thereís also the elusive Centurion card, but only for those really big spenders like celebrities and CEOs.) Their credit cards, on the other hand, consist of the ďBlueĒ line: Blue from American Express, Blue Cash Everyday, etc.; Clear from American Express; the Delta line including the Gold Delta SkyMiles, and a couple other cards with companies American Express has partnered with.

    The Main Difference

    There is, of course, one main difference between American Expressís charge cards and credit cards, which is the same thing that is different between all charge cards and credit cards. With charge cards, you are required to pay off your balance each month. With credit cards, you can carry a balance if you need to.

    Pros of Charge Cards

    As you can probably guess, one of the main benefits of charge cards is that you canít dig yourself into debt, since you must pay off your balance each month. This also means that there is no interest rate to worry about. With American Express charge cards in particular, there is also no pre-set spending limit. If your spending begins to go up, so will your credit line. Finally, another benefit is the extra perks. The rewards points are nice, too, but they arenít something you canít get with their credit cards.

    These perks depend on the card, but include things like a concierge service that you can use to book flights or make restaurant reservations for you, or free companion tickets on certain flights. Other perks may include roadside assistance, redeeming rewards without blackout dates, $200 to cover airline fees on your favorite airline (this perk comes with the AMEX Platinum), airport lounge access, and a lot more that you should read up on if you have one of these cards.

    Cons of Charge Cards

    The drawbacks, then, are the opposite: you canít carry a balance, which could be a hassle if you have money troubles or simply want to finance a purchase. You may get great perks, but you have to pay them in the form of higher annual fees. This difference can be pretty drastic. While you can get some of American Express's credit cards with no annual fee, the Platinum card will run you $450 a year.



    Pros of Credit Cards

    For those that donít like charge cards, the best part of American Expressís credit card line is the fact that you can carry a balance if you need to. Some of their credit cards, such as the Blue Cash Everyday, allow you to carry a balance at a 0% interest rate for several months with an introductory offer. This can help you get some of your debt under control. One other nice thing about these cards is that they generally have lower fees. Since American Express can make money in interest and doesnít have to offer as many perks, they can charge less.

    Cons of Credit Cards

    The biggest con of American Expressís credit cards is that you can dig yourself into debt, which is dangerous for those of us who like to spend (so, almost everybody). These cards may also be harder to get, except for outliers such as the Centurion card, which is extremely exclusive. Since American Express is trusting you to pay them back over time rather than within a short grace period, a card such as Blue Cash Everyday will require a higher credit score than a card such as ZYNC.

    So there you have it. Depending on your individual needs, you may find that credit cards or charge cards are better for you. If you need help staying out of debt, you will likely be better off with the American Express Gold charge card rather than the Costco TrueEarnings credit card. If you donít want to pay an annual fee, the other way around may be a good idea. Either way, you have a lot of options. Good luck in finding the best card for you!

  2. American Express Charge Card vs. Credit Card: Pros and Cons
  3. #2
    Registered User New Member
    Posts
    10
    I've found that charge cards have much less of an effect on your credit score, which is why even though I use American Express I have a Chase Sapphire Preferred card as well to keep boosting my credit score.

  4. #3
    Quote Originally Posted by PointsGuy View Post
    I've found that charge cards have much less of an effect on your credit score, which is why even though I use American Express I have a Chase Sapphire Preferred card as well to keep boosting my credit score.
    This is why I love the Plum Card... you get the best of both worlds, an actual American Express credit card.

  5. #4
    Registered User Junior Member
    Posts
    30
    Just came across this in a search. Always wondered what the difference was. Thanks!

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