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Established Contributor
valley_man0505
Posts: 879
Registered: ‎05-29-2008

What are the benefits of having a charge card? Am I missing something?

I was just approved for an Amex Zync, which initially had me excited because I was finally "in" with Amex.  However, the more I thought about it, the more I wondered "how does a charge card really help me since I have to pay in full in each month?"  I know it is always sound advice to only buy what you can pay for with cash, but, then, why not just pay cash in the first place (other than online purchases or something like that)?  To me, the main benefit of credit cards is to have them for emergencies.  For instance, if my car broke down, and I couldn't afford the pay the repair bill in one lump sum, credit would be nice.  A charge card still would not solve the problem.  It would "buy some time", but I would still have to pay for the repair in a lump sum.

 

Is there something I am missing? I could also see it being nice for business use or for someone who travels for work and gets reimbursed upon expense report submittal, but, other than that, I am having hard time getting excited about my Zync now since I won't be using it for anything like that.

Valued Contributor
discernment
Posts: 1,142
Registered: ‎09-01-2011

Re: What are the benefits of having a charge card? Am I missing something?

You and I are on different sides of the fence with our philosophy about credit. LOL!!! 

 

I don't ever want to carry a balance on ANY of my credit cards.  I PREFER to treat all my cards like they are charge cards and PIF every month. 

 

That's just the way I view credit.



Husband's Current Score: EX 691 CUSC; EQ 694; TU 687; Mine: EX 773 (AMEX); EQ 720; TU 750
Wallet Contents: SECURED: Capital One Platinum Mastercard, US Bank Harley Davidson Visa, USAA Bank American Express;
UNSECURED: Chase Freedom; USAA Cash Rewards World Mastercard, Discover More, CUSC Platinum Rewards Visa, American Express Zinc, American Express Blue Cash Preferred, Amazon Card, Walmart Discover Card
Established Contributor
Jlu
Posts: 569
Registered: ‎06-12-2012

Re: What are the benefits of having a charge card? Am I missing something?

Charge cards offer a much higher limit of spending whereas a credit card has a limit. Charge cards also force you to purchase only what you can afford, which is what you should be doing for everyday purchases. If you want to charge a large purchase you should finance it, not charge it.

Wallet: JP Morgan Select Visa Signature $10k | Chase Sapphire Preferred $7k | Citi ThankYou Premier Visa Signature $5700 | AMEX Premier Rewards Gold Card | Barclaycard Visa $5k | Discover IT $10k | Chase Freedom Visa $3k | Capital One Quicksilver $3k | Bank of America Cash Rewards Visa Signature $8k | Walmart Store $5k | Amazon Store $10k | Chase Total Checking |
Valued Contributor
Crashem
Posts: 3,098
Registered: ‎01-26-2012

Re: What are the benefits of having a charge card? Am I missing something?

The benefits are numerous. One, you build your credit. Also getting history with Amex will allow you to get their revolvers with a lower fico than otherwise. Two, all sorts of protections on purchase vs paying cash/debit card. Check them out. Three, you get reward points that few debit cards have these days. Four, while you can't revolve your balance, it should help with budgeting within the month
               LIMITS IN CARD DESCRIPTIONS
Valued Contributor
Repo-ed
Posts: 2,953
Registered: ‎02-09-2012

Re: What are the benefits of having a charge card? Am I missing something?


Crashem wrote:
The benefits are numerous. One, you build your credit. Also getting history with Amex will allow you to get their revolvers with a lower fico than otherwise. Two, all sorts of protections on purchase vs paying cash/debit card. Check them out. Three, you get reward points that few debit cards have these days. Four, while you can't revolve your balance, it should help with budgeting within the month

+1

Senior Contributor
bichonmom
Posts: 3,318
Registered: ‎05-05-2011

Re: What are the benefits of having a charge card? Am I missing something?

Another benefit that no one has mentioned is how it reports on your CR. Since there's no CL, it doesn't affect your util. So, yes, you do have to PIF. But the balance reporting doesn't ding your FICO like it would w/a regular CC.

 

I do think that the older TU FICO 98 may factor it in and uses your highest prior balance as your CL. But the more recent versions don't do that.

 

And the "in" with Amex isn't to be diminished. Plus, you'll now get backdating. So any future Amex cards you get will HELP your AAoA instead of lowering it, like a new CC can do.

 

 

~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*~*
EQ FICO 750 | TU FICO 761 (Walmart) | EX FAKO 767 | Goal: 800+

Edits, funky spacing and spelling due to my iPad not getting along with the forum editor!

Moderator Emeritus
webhopper
Posts: 7,230
Registered: ‎09-16-2011

Re: What are the benefits of having a charge card? Am I missing something?

I like the cash flow management it provides me when setting up my monthly cash flow spreadsheet. Also enjoy the NPSL and being able to use the card for reimbirsible work expenses. Also; I plan to take advantage of amex business products later.as well as an amex revolving account later; so building the relationship with amex is important.

Starting Score: 08/29/2011 TU 671 EQ 674
Current Score: TU 754 EQ 694 EX 697
Wallet: NFCU Visa Sig 25k, Amex Lowes 22k, NavCheck 15k, Amex PRG, Amex Zync, Discover It 13.5k, Amazon Visa 5k
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Established Contributor
Cdnewmanpac
Posts: 767
Registered: ‎01-16-2012

Re: What are the benefits of having a charge card? Am I missing something?

I agree with the reasons above. I would also add that disputing a charge on a charge card is MUCH easier than disputing a charge on a debit card. Also, many banks restrict how much you can charge per day on a debit card. So making large purchases, even if you have the cash, is safer if done via a charge card. Think of it like a debit card with huge perks. You also need a credit card for emergencies: they complement each other, but don't replace each other.

In wallet: Ink Plus 10k, AMEX TE 25k. In bag: CSP 16k, USAA WMC 15k, Hyatt 13k, United MPE 12k, AMEX HHonors 3k. In SD: Cap 1 QS 5k, Discover IT 7k. FICO 08 says my EQ is now 844, was 510 in 2010.
Moderator Emeritus
webhopper
Posts: 7,230
Registered: ‎09-16-2011

Re: What are the benefits of having a charge card? Am I missing something?

Its nice knowing that I can charge more than 5k on a card and not worry about the utilization affecting my scores.

Starting Score: 08/29/2011 TU 671 EQ 674
Current Score: TU 754 EQ 694 EX 697
Wallet: NFCU Visa Sig 25k, Amex Lowes 22k, NavCheck 15k, Amex PRG, Amex Zync, Discover It 13.5k, Amazon Visa 5k
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Moderator
Revelate
Posts: 8,402
Registered: ‎12-30-2011

Re: What are the benefits of having a charge card? Am I missing something?


webhopper wrote:
Its nice knowing that I can charge more than 5k on a card and not worry about the utilization affecting my scores.

Heh, since you have to PIF anyway, doesn't that mean you simply got sloppy with your religious payments instead since you could've dropped it on that pretty NFCU card and still zero'd it anyway? (teasing!)

 

AP reimbursement timeline from your job notwithstanding :smileywink:.

 

 

Starting Score: EQ 561, TU 567, EX 599* (12/30/11, EX lender pull 12/29/11)
Current Score: EQ 04 679, EQ 8 708, TU 711, EX 702* (07/14/14, EX older)
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