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Established Contributor
Posts: 879
Registered: ‎05-29-2008
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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
Posts: 1,142
Registered: ‎09-01-2011
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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.



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Established Contributor
Posts: 932
Registered: ‎06-12-2012
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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.

JP Morgan Select $10k | Citi TY Premier $15k | PenFed PlatRewards $22k | BofA AMEX $15k | Chase Freedom $20k | Discover IT $10k | Barclay Arrival+ 25k | AMEX SPG $10k | NASA Platinum-Advantage $10k | CapOne Quicksilver $5k | Amazon Card $10k | NASA PLOC $30k @ 8.25% | Joined myFICO 6/12 with a 540 FICO & today I'm over 750!
Valued Contributor
Posts: 3,096
Registered: ‎01-26-2012
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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
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Valued Contributor
Posts: 2,982
Registered: ‎02-09-2012
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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

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Senior Contributor
Posts: 3,322
Registered: ‎05-05-2011
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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
Posts: 7,225
Registered: ‎09-16-2011
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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
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Established Contributor
Posts: 766
Registered: ‎01-16-2012
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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
Posts: 7,225
Registered: ‎09-16-2011
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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 Emeritus
Posts: 12,938
Registered: ‎12-30-2011
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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 Smiley Wink.

 

 

Starting Score: EQ 04 561, TU 98 567, EX 98 599 (12/30/11)
Current Score: EQ 04 700, TU 04 731, EX 98 725 (05/24/15)
Goal Score: 700 on EQ 04 (01/01/16)


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