Question about American Express Cards

I don’t understand the point of an American Express card. As I interpret their website, it’s like a credit card but you have to pay it off every month. So what advantage does it offer over a normal credit card? Why not just get a Visa and pay it off in full all the time? Visa is accepted in more places than Amex anyway.

What am I missing?

There is no pre-set spending limit, for one. Charges are approved as long as they’re in-line with your previous spending habits. (So if you typically spend $200 a month, and then try to buy a Corvette, it won’t be approved. But if you regularly put tens of thousands of dollars on the card, then you can.)

AmEx also offers tons of perks for loyal customers, including their travel agency, hotel and airfare discounts, concert tickets, and all sorts of cool stuff. You can also get one if you have bad credit.

Finally, AmEx’s “blue” line is their credit card option. Like Visa and MC, there is no fee, and you pay interest if you maintain a balance.

There isn’t really a factual answer to your question. Some people prefer Amex because they can get frequent flier miles or other bonuses or incentives. Or there may be services that it offers in the area of account management that other companies lack or do better. Amex seems to have some particular attraction for businesses in my experience; when I worked at a place taking phone payments by credit card businesses almost always wanted to use Amex. regardless, any answer is going to be largely subjective.

American Express has for some time now offered a true credit card, the American Express Blue.

Worse- there’s a "secret " spending limit- where as you said “Charges are approved as long as they’re in-line with your previous spending habits”- however, you don’t know where they have set their “secret limit” and this can lead to embarrassment.

It’s not secret; if you’re making a big purchase you can call and ask if it will be approved beforehand. Also, it’s not a set number, like a typical line of credit, but based on overall spending and bill payment patterns. As your spending habits change, so does the limit, regardless of whether you asked for it or not. Obviously, if this is a good thing depends on your preferences. I really like my AmEx service for a variety of reasons.

I have an AmEx corporate card which I use whenever I travel. I make out because I don’t have to use my own credit card or pay up front. AmEx makes out because they charge some percentage of the fee. I just pay it off when my expense check comes in. AmEx tends to target corporate customers so this sort of thing is pretty common. AmEx also has a credit card which is designed for the more traditional credit card user.

The benefits for the “premium” cards are good if you’re a business person particularly - the miles are much better than any other credit card my family has had, the Platinum card gets you into the Delta Crown Room if you’re not a member, there’s a concierge service, there’s flight insurance, etc, etc, etc. And the Platinum card has no spending limit (I assume the same applies to the fabled black card) - my dad could lay it down for a house if he so desired. That’s good to know, Just In Case.

As engineer_comp_geek says, it makes sense as a corporate card. I used to have Diner’s as a corporate card, and it didn’t even matter that Diner’s said you could carry a balance, because corporate policy said we couldn’t, and they win. So that part’s not a negative for the Amex card. And I would be shocked if an Amex corporate card was declined for most any reasonable expense.

The regular AmEx card is is a charge card, not the same as a revolving credit card like Visa, Discover or AmEx’s own blue card. You can’t get a cash advance on one. You can pay some charges over time but I think you have to make a special request. I’ve seen that option on my statement but have not bothered looking into it.

I don’t want to turn this into a IMHO or GD type answer, but I would just suggest that in assessing the bang-for-buck from AMEX you consider the (admittedly numerous) benefits with magnifying glass in hand (and read some of the reviews of them at epinions.com or similar sites). When doing this, recall that AMEX Platinum is $395 per year and they never comp anyone (unlike credit cards). [I won’t mention the Black/Centurion card, at $1800 or whatever, because I doubt many of us qualify].

AMEX is quite adept at piling on the benefits (or “programs”) for its upper level cards. They look great on paper. Most corporate travelers I’ve talked to have said, though, that the only two Platinum benefits they really valued were the airport lounge access and the International Airline Program. The former works on Continental, Delta, and . . . maybe one other. A good deal, though airline lounge membership itself can often be had in special offers for $250 a year, and the lounges are by all accounts getting to be less and less a refuge from the madding crowd.

The International Airline Program looks good on paper. You get a free companion ticket when you buy a full-fare (business or FC) international ticket. If you frequently fly full fare, internationally, upper class, this may be a great deal. Keep in mind though that, esp. today, there are sometimes/often fares available in upper class for less than full fare (sometimes substantially less). These won’t qualify for the program, I think (but it may not matter, given that you may be able to get two $2000 FC RTs to Europe for less than one full fare FC RT). My sneaking suspicion is that the IAP is a, um, scheme sold by Amex to the airlines (who have many variants on the full-fare-companion-flies-free in other guises) as a way of inducing business travelers to pick the highest, rather than lowest, upper class fare in the hopes of finagling a free trip for the wife or equivalent). I’d suspect more and more corporate travel depts. are adding rules against picking “full fare” when discount fares (even discount upper class fares) are available.

The other programs . . . well, many view them as an opportunity for AMEX to sell you mediocre stuff at inflated prices. Certainly their “Departures” Platinum magazine is an orgisatic paen to haute consumer goods. My one attempt to book car service through the “Special Platinum Limosuine Program” led me to conclude that they were re-selling service from the livery companies, plus a 75% markup. The concierge . . . well, the concierge is batting 0 for 3 in my case. They’ve steered me toward expensive hotels, rack rates, worse than anything (even for the equivalent hotel); located tickets for shows, but then told me they couldn’t buy them for me with my card , but I’d have to run down to the box office to reserve them myself (say what?); and failed to locate a gift for me in Hong Kong (only, admittedly, because the workfare operator couldn’t understand what I wanted, and when she did, “couldn’t locate that on FTD.” Anyway, this really is IMHO stuff, sorry, and YMMV; I’m just saying, kick the tires. For now, I’ve identified two or three “services” that make it worthwhile, somewhat, and a bunch of others that are harmless so-what window dressing . . . .

A complete list of personal American Express cards.

Small Business cards.

Corporate cards.

Couple of things to consider:

First, as a charge card, it will not affect your credit rating. When your credit rating is investigated, the sum total of all your credit card limits is added, and then deducted from your max. allowable debt. Your old dept. store cards can come back and bite you that way when you apply for a mortgage.

Secondly, the rewards system is vastly more lucrative then credit card programs, last time I checked: I get one FF (Aeroplan, Delta, etc) point for every dollar. Compare that to just 1 point per $25 for Air Miles…) After just four or five medium business trip charged on the card, I have enough points for a cross canada ticket.

Thirdly, the travel services are a good insurance: never any need to take the damage & liability coverage on a rental car, they buy me new clothes if my luggage is 12 hours late or more, etc.

Finally, the no limit thing: I put my entire wedding reception and honeymoon on my amex. (Never saw so many zeros on a simple little card form :eek: :smiley: ) I had called ahead to tell them, and they checked with my bank to make sure I could cover it, but I earned a free ticket right there…

Technically, you don’t qualify. You get invited.

FYI the black card started out as an urban legend, then AmEx decided to capitalize on it.

Amex blue holder here.

The card is awesome. It offers so many more things for the consumer. Lots of benifets. non-refundable item? Amex’ll take it back. Oops, bleached my new jeans? Amex’ll take it back. Someone stole it? Amex’ll reimburse you. Some cards even have Best-value Guarentee(BVG). Basically, if you find an item for less in 90 days Anywhere(internet included for a few, but not many anymore) Amex will refund you the difference. Even if it’s from the same store and a price drop occurs.

I <3 my Credit card.

Ex Amex customer service back office employee here.

Now, I’m not sure how good the credit cards are, but Amex was pretty good in giving customers the advantage of the doubt. They would always suspend credit pending investigation no matter why or what the query was. Platinum customers really got a lot of leeway. I remember handling dispute after dispute after dispute for one of those, who was either really chaotic or trying it on. Perhaps Visa et all do the same, but from where I was sitting it was pretty good service.

Sorry, should have mentioned this as the third benefit that people do seem to appreciate – Platinum members accrue membership rewards points at one per dollar (and you can sometimes convert these to airline miles with a 15%-20% bonus under special offers) – and the MR fee is waived. However, they are now charging sales/excise tax each time you convert MR points to bankable airline miles (N.B. that you will pay another excise tax when you convert those miles to a ticket). Chintzy, IMHO – and note that FF miles are seen by many as an inflationary currency (certainly I’ve had a harder time converting them for desirable tickets lately).

On the other benefits – I’d suspect that most upper-tier revolving credit cards can get you the LDW waiver on car rentals (always remember that the credit/charge card “coverage” that you thus obtain is generally secondary coverage to your personal auto policy – and thus may not amount to much, nor save you from jacked-up insurance rates. Of course, you make out just fine if you don’t own a car and have no primary coverage). Ditto for purchase protection, etc. (though AMEX may indeed be on the generous end of this range).

As far as dispute resolution, AMEX has historically been good at cutting its Platinum customers a break (in my anecdotal experience). Various overseas overbilling disputes in which I was probably, but not manifestly, correct have been resolved in my favor with little hassle or need to get documentation from the merchant (on my part). I’ve had almost as good service from one or two upper-tier credit cards, and much more hassle-filled interactions with other credit cards, including having credit-backs denied in cases where I was right. However, all credit cards (and I suspect AMEX too) are under increasing pressure from merchants to police “chargebacks” much more rigorously, in view of the abuse, intentional and otherwise, that has occurred (esp. on the Internet) as customers demand refunds for goods and services that they just don’t want to pay for. I suspect all cards will be more unpleasant on these matters as time goes by.

The first credit card from American Express was their Optima card. I’ve had one since 1994, and still have it (though it’s gone from plain Optima to Optima Platinum).

They don’t seem to be emphasizing the Optima card much anymore, though; it looks like they may be phasing the card out in favor of the American Express Blue card.

This thread has me almost convinced that I should stop using my AmEx. I originally had a corporate AmEx for business travel, and when I started putting personal items on the card I figured that I should just get my own. Years later I don’t travel for work anymore (hardly travel at all, actually), and I don’t need or use any of the benefits that have been mentioned, so it seems like these days I’m paying $55/year for no apparent reason.

I wouldn’t want to cancel the AmEx outright, though, at least not at first, so my question is this: if I stop using it for a few months, will my limit decrease – or possibly disappear?

I’ll echo some of what’s been said and add another point:

As a customer service manager for another company, I can vouch that the AMEX folks were very aggressive in securing refunds for their cardholders, even when their card holders were clearly full of crap.

The additional point – I got my AMEX card when I was struggling to pay off a Visa balance. I cut up my Visa and got an Amex. I had to pay the Amex each month, so I did. I also slowly chipped down the Visa debt until I was free and clear. Now, older and wiser, I carry both.