topic Re: Is Amex the only well know charge card? in Credit Cards

Is Amex the only well know charge card?

SRT4kid93 — Sun, 01 Sep 2024 03:20:15 GMT

I have never heard of any other charge cards?

is Amex the only one? And if so, why are they the only company to offer them? You would think other companies would offer at least 1?

I do understand that charge cards are not as good because you have to pay the full

balance (although now Amex offers pay over time, so other companies could do the same) and they don't report util ratio as well.

but if they are so bad why does Amex offer them? And if they aren't preferred by consumers why do so many people have Amex charge cards? I realize that for a long time charge cards were the only offering Amex had, and so I assume people got them for Amex's amazing benefits and customer service. But Amex's credit cards have been out for a while now and people still get the charge cards. So clearly there is a market for them?

Re: Is Amex the only well know charge card?

Anonymous — Sun, 01 Sep 2024 04:03:40 GMT

@SRT4kid93 wrote:
I have never heard of any other charge cards?

is Amex the only one? And if so, why are they the only company to offer them? You would think other companies would offer at least 1?

I do understand that charge cards are not as good because you have to pay the full
balance (although now Amex offers pay over time, so other companies could do the same) and they don't report util ratio as well.

but if they are so bad why does Amex offer them? And if they aren't preferred by consumers why do so many people have Amex charge cards? I realize that for a long time charge cards were the only offering Amex had, and so I assume people got them for Amex's amazing benefits and customer service. But Amex's credit cards have been out for a while now and people still get the charge cards. So clearly there is a market for them?

Who says they are so bad?

Here is a 28 post thread to read. https://ficoforums.myfico.com/t5/Credit-Cards/What-s-the-deal-with-Charge-Cards/td-p/5773253

Re: Is Amex the only well know charge card?

SRT4kid93 — Sun, 01 Sep 2024 04:07:56 GMT

That's what I'm asking,

im saying that Amex is the only charge card I know of. I'm asking why that is the case?

I'm saying the only reason I could think of is that charge cards are not popular enough to tempt other companies to offer them. So they don't, but that doesn't seem to be the case because if charge cards were so unpopular or people didn't want them, why are Amex's so popular?

Re: Is Amex the only well know charge card?

Anonymous — Sun, 01 Sep 2024 04:22:56 GMT

@SRT4kid93 wrote:
That's what I'm asking,

im saying that Amex is the only charge card I know of. I'm asking why that is the case?

I'm saying the only reason I could think of is that charge cards are not popular enough to tempt other companies to offer them. So they don't, but that doesn't seem to be the case because if charge cards were so unpopular or people didn't want them, why are Amex's so popular?

You asked a bunch of questions and here is a 28 post thread to read. https://ficoforums.myfico.com/t5/Credit-Cards/What-s-the-deal-with-Charge-Cards/td-p/5773253

Re: Is Amex the only well know charge card?

SouthJamaica — Sun, 01 Sep 2024 16:38:08 GMT

@SRT4kid93 wrote:
I have never heard of any other charge cards?

is Amex the only one? And if so, why are they the only company to offer them? You would think other companies would offer at least 1?

I do understand that charge cards are not as good because you have to pay the full
balance (although now Amex offers pay over time, so other companies could do the same) and they don't report util ratio as well.

but if they are so bad why does Amex offer them? And if they aren't preferred by consumers why do so many people have Amex charge cards? I realize that for a long time charge cards were the only offering Amex had, and so I assume people got them for Amex's amazing benefits and customer service. But Amex's credit cards have been out for a while now and people still get the charge cards. So clearly there is a market for them?

There used to be 3, Amex, Diners Club, and Carte Blanche. I haven't heard anything about the last 2 for years, so I don't know if they even still exist.

Amex offers charge cards because they are highly profitable for Amex.

Obviously there is a huge market for them.

I too don't know why.

Re: Is Amex the only well know charge card?

NoHardLimits — Sun, 01 Sep 2024 20:48:33 GMT

P2 had a business charge card from Chase about a decade ago. It was called the Ink Bold. Chase discontinued it and converted people to a different Ink product.

Re: Is Amex the only well know charge card?

SRT4kid93 — Sun, 01 Sep 2024 20:52:48 GMT

So why is it other companies don't offer them? Why is Amex the only one? There's clearly a market for them despite some of their apparent negatives.

Again, even if other companies offer them. I think Amex charge cards would always be more popular simply because of Amex's legendary customer service, fraud protection, and card benefits.

so while other companies couldn't match Amex in those categories I still think there would be a market for them. Especially because Amex's are not acceted everywhere.

Re: Is Amex the only well know charge card?

creditrizz — Sun, 01 Sep 2024 22:02:29 GMT

Different revenue priorities. Almost all charge cards have annual fees. Compare Costco to a regular grocery store, where Costco makes more of their profits from the membership fee than the product markups.

There aren't many personal charge card options other than Amex, and even now they offer a pay-over-time option since there are probably alot of consumers who want that as a backup plan. Personally I turn it off on my Amex plat as I don't want anyhting to do with financing through a credit card - especially with today's rates. For business I believe the Chase Ink Premier is a charge card, as is the 2% Capital One Spark. I think the Business Venture X is a charge card as well.

One of the main benefits of a charge card is usually a larger limit, since they expect to receive payment in a shorter payment term - that's why they tend to be more popular for companies than individuals.

Re: Is Amex the only well know charge card?

SRT4kid93 — Sun, 01 Sep 2024 22:52:53 GMT

Yes I have noticed a lot of charge cards have no preset spending limits.

on one hand it makes sense. You are willing to give more credit because you know you will be getting paid back much quicker. At the end of the month the consumer pays it all back in full. (Its also worth mentioning they can't make any money on interest because you cannot make minimum payments or carry a balance, so they need to charge very large annual fees to make their money)

on the other hand it Seems kinda backwards when you think about it.

a charge card needs to be paid in full, so giving large limits would seem more risky for the issuer. Cause you are giving the person more rope to hang themself. As a card issuer what seems more risky to give to someone?

100k limit, that must be paid all at once (If someone cannot pay this back, their only real recourse is to file bankruptcy)

100k limit that can be split up over many months or even years (Therefore giving the person a much better chance to pay back the debt, and not file bankruptcy)

But again, while the chance of delinquencies goes way up due to the consumer being able to pay all that money back in 1 shot. the speed of getting paid back becomes much quicker as well.

Re: Is Amex the only well know charge card?

creditrizz — Sun, 01 Sep 2024 23:25:34 GMT

It still fits into a reduced risk model with the larger limit. Both principal repayment or bad loan writeoff occur at an accelerated pace with a charge card. With a revolving credit card the consumer could end up paying the minimum payment for years before bankruptcy or defaulting. While the lenders like interest, they don't like tiny payments indefinitely.

Re: Is Amex the only well know charge card?

Anonymous — Mon, 02 Sep 2024 00:25:56 GMT

I think OP does bring up an interesting question as to why (almost) no other competitors have gone into this market, if it is still so profitable for Amex. Yes, the risk model is different but issuers have a lot of products with varying risk.

I wonder if part of it is that it is hard, marketing wise, to go from credit card to charge card, without making promises you might not want to keep (such as larger purchasing power). Whereas Amex, with its charge cards, could also offer customers credit cards for those that wanted that model (while adding pay-over-time stuff to the charge cards anyway).

I think that at one point, for a short time between 2000 and 2010 at a guess, my (Fortune 20) employer switched expense travel card from Amex to Citi Business (before switching back). At the time I had assumed that the Citi card was a charge card but now I realize I don't have any basis for that. We had to file expense reports quickly in either case!

Re: Is Amex the only well know charge card?

SRT4kid93 — Mon, 02 Sep 2024 02:08:59 GMT

@Anonymous

yes thank you for getting back to my original questions and for backing up my question. I couldn't tell if I was being stupid by questioning why other companies don't offer charge cards. But you backing up my question shows it was a legitimate question.

I thought maybe I was missing something but I racked my brain and still couldn't figure out why Amex was the only one

Re: Is Amex the only well know charge card?

FicoMike0 — Mon, 02 Sep 2024 02:42:15 GMT

I'm pretty sure there were charge cards before credit cards. The ones I remember we're store specific, a Sears, penny's or montgomery ward card. I think the early gas station cards were charge cards too. Again, the texaco card was only good there. Over time, they started offering revolving charge payment plans, but only good at one store. Diners club came along and was good at more than one resturant. Amex followed. Amex got into Corp expense accounts, where time payment wasn't desired.

I think boa launched the first real credit card, which we now call visa.

So, I think the answer is, amex is the only one left, there have been many charge cards.

Re: Is Amex the only well know charge card?

FicoMike0 — Mon, 02 Sep 2024 02:43:09 GMT

There was carte Blanche too.

Re: Is Amex the only well know charge card?

Anonymous — Mon, 02 Sep 2024 14:13:37 GMT

Actually charge cards are better than credit cards because they make you pay off your debt in full when it's due. If used correctly they would prevent a lot of credit card debt. A credit card is an interest bearing loan. A charge card is an advance.

Re: Is Amex the only well know charge card?

Anonymous — Mon, 02 Sep 2024 17:56:47 GMT

@Anonymous wrote:
Actually charge cards are better than credit cards because they make you pay off your debt in full when it's due. If used correctly they would prevent a lot of credit card debt. A credit card is an interest bearing loan. A charge card is an advance.

Better for who? The consumer?

I still am not sure why Amex is the only one. If interest is important, other could follow Amex and include some credit card like features in a charge card, like pay-over-time. Presumably there is some big reason why not that we don't know (which could be as simple as market research shows their customers don't see a need)

Re: Is Amex the only well know charge card?

SRT4kid93 — Mon, 02 Sep 2024 18:07:41 GMT

I think it could be seen as better or worse for the consumer depending on perspective.

yes- it's hard to get yourself in crippling debt by getting charged 30% interest every month

but also, it's much easier to default because you need to pay your bill in full(now they offer pay over time) but they didn't used to.

Re: Is Amex the only well know charge card?

Kforce — Tue, 03 Sep 2024 01:05:56 GMT

@SRT4kid93 wrote:
Why are Amex's so popular?

Excellent advertising, customer service, and rewards.

I do not believe the issue of "revolver" vs "charge card" is of concern for most.

If one could gets 0.5% better rewards on a "Visa" from "City" that was a revolver,

it would be popular.

If Amex cards switched to the "Visa network" and became revolver cards, very few would complain or leave.

If you give me 0.25% better rewards on a "Visa" - Debit card, I would get it.

Re: Is Amex the only well know charge card?

Anonymous — Tue, 03 Sep 2024 16:35:12 GMT

@Kforce wrote:
@SRT4kid93 wrote:
Why are Amex's so popular?

Excellent advertising, customer service, and rewards.
I do not believe the issue of "revolver" vs "charge card" is of concern for most.

If one could gets 0.5% better rewards on a "Visa" from "City" that was a revolver,
it would be popular.
If Amex cards switched to the "Visa network" and became revolver cards, very few would complain or leave.

If you give me 0.25% better rewards on a "Visa" - Debit card, I would get it.

I agree. But there is a slight disconnect in the model, at least for MyFico types. One probable advantage of charge cards is that you are allowed to spend more (related to the pay-in-full requirement, forgetting pay-over-time type additions). But they don't give you a figure so that you can brag on MyFico, I mean so you can plan responsibly.

For at least this population, knowing that with a BCP you would get say a $20K SL, whereas a Gold would give you an "official" $40K, might encourage some to work hard to justify the increased AF!

Re: Is Amex the only well know charge card?

Jeffster1 — Sat, 07 Sep 2024 00:26:02 GMT

@SouthJamaica is correct.

Carte Blanche and Diners Club had a great deal of panache in their day. The brands merged and I read somewhere recently that BMO manages the accounts to this day.