topic Re: Why Amex? in Credit Cards

Why Amex?

loviedovie — Sun, 17 Feb 2013 16:53:59 GMT

I'm confused... I just looked up AMEX charge cards after forum members suggested that I apply for one. But there is such a high annual fee. If you are not able to carry a balance, you are essentially just spending your cash through this AMEX card.. so why pay them to let you earn them money? What would I get out of that?

Re: Why Amex?

BornSupercharged — Sun, 17 Feb 2013 16:57:29 GMT

The Green card has no AF for the first year. Say you open it now, then January 2014 you apply for and receive the Blue Cash Everyday (no annual fee + gets cash back etc etc). Then you close the Green card before the AF hits. Now you just have the BCE with no AF and perks, and Member Since 2013 for backdating; it's a win/win situation.

Re: Why Amex?

Revelate — Sun, 17 Feb 2013 16:57:32 GMT

@loviedovie wrote:
I'm confused... I just looked up AMEX charge cards after forum members suggested that I apply for one. But there is such a high annual fee. If you are not able to carry a balance, you are essentially just spending your cash through this AMEX card.. so why pay them to let you earn them money? What would I get out of that?

Annual fees are used to offset rewards structures. To my knowledge, every signficant lender has at least one credit card product with an AF.

Every AF should be looked at and determined if it makes sense for you, both from the financial rewards persepctive (if you offset the AF or not) or for some other reasons which various people have (like wanting a metal card which comes up here routinely).

There's others that flat out refuse to pay any AF, and that's fine too. Really, if the card works for you, then use it happily without worrying what others think; however, if it doesn't, then don't.

Re: Why Amex?

Anonymous — Sun, 17 Feb 2013 16:58:07 GMT

Amex membership has benefits but they aren't for everyone. Personally, I don't feel it's still the "I've arrived" card since they offer credit but the BCP AF pays for itself in my case. I was also able to take advantage of backdating and not have a score hit because it wasn't scored as a new account.

Re: Why Amex?

Open123 — Sun, 17 Feb 2013 17:03:12 GMT

Charge cards are worthwhile if you need high monthly purchasing power, value the MR transfer program, and for the signing bonus (most cards waive the first year fee). Also, charge cards are easier to get and *backdating," arguably the most useful of all Amex perks.

PS - You guys reply fast! When I clicked on to reply, there were no replies yet.

Re: Why Amex?

Anonymous — Sun, 17 Feb 2013 17:01:53 GMT

Great benefits, good looking cards, decent rewards structures (for travelors/big spenders).

If you have to justifty the annual fee, then you really can't afford it.

Re: Why Amex?

Anonymous — Sun, 17 Feb 2013 17:09:55 GMT

I have an Amex Green and BCE. I dont even use them anymore. Very inconsistent customer service, rewards are terrible and take way to long to post to your account. Citi posted my 10,000 point bonus the month I recieved it. I feel as though Amex is really over rated. I'll take Citi for rewards and Discover for customer service any day.

Re: Why Amex?

LS2982 — Sun, 17 Feb 2013 17:20:26 GMT

I agree with Bornsupercharged.. Use the Green to your advantage and cancel it next yr. for the BCP. No AF paid.

Re: Why Amex?

Anonymous — Sun, 17 Feb 2013 17:26:09 GMT

Agree with others. Try the Green for a year without a fee. If you decide on a card with a AF if your rewards don't justify the AF then the card isn't for you. The reward structure must fit your spending habits.

BCP was my first card with a AF. The reward structure fell in line with my spending (even with the new caps), so the decision was very easy. Good luck in with your decisions.

Re: Why Amex?

E150GT — Sun, 17 Feb 2013 17:40:31 GMT

I agree with what people are saying here. Amex charge cards are a good way to get in the door with Amex if your credit is okay but not good enough to get their revolving products. They also let you spend quite a bit without affecting your score when it reports. The green doesn't earn a bunch of rewards unless you spend big. Now the question is is what does one do with the MR points earned during the first year if you do not plan to keep the charge and go to a revolver?

Re: Why Amex?

LS2982 — Sun, 17 Feb 2013 17:42:37 GMT

I have 20, 000 MR points right now, what is that worth?

Re: Why Amex?

emptypockets — Mon, 18 Feb 2013 02:59:07 GMT

@E150GT wrote:
I agree with what people are saying here. Amex charge cards are a good way to get in the door with Amex if your credit is okay but not good enough to get their revolving products. They also let you spend quite a bit without affecting your score when it reports. The green doesn't earn a bunch of rewards unless you spend big. Now the question is is what does one do with the MR points earned during the first year if you do not plan to keep the charge and go to a revolver?

I just closed my AMEX PRG ) I was not using the card enough to justify paying AF. I transferred ther MR points to my HH account (in January they had a offer to transfer points at a 1k to 2k ratio (transfer 1k MR points, get 2k HH points. You can transfer points to Airline/Hotel partners anytime in 1k increments. As soon as you cancel a MR earining card (assuming you do not have another card that earns MR points, you forfeit any remaining points.

Re: Why Amex?

loviedovie — Mon, 18 Feb 2013 04:09:03 GMT

Thanks to all for the advice. I probably would use the card enough to justify the annual fee but, I still don't really see what the advantage is of Amex vs. other reward cards. will keep researching.

Re: Why Amex?

nickn86 — Mon, 18 Feb 2013 05:52:41 GMT

I don't get the advice re: Green Card. If the plan is to cancel after a year, why not just get the PRG instead?

Re: Why Amex?

jamesdwi — Mon, 18 Feb 2013 06:03:22 GMT

@LS2982 wrote:
I have 20, 000 MR points right now, what is that worth?

$200 in giftcards to many resturants. don't use the points for AMEX gift cards they are about the worst return except for the offer to pay with points.

Re: Why Amex?

Anonymous — Mon, 18 Feb 2013 07:45:04 GMT

@Anonymous wrote:
Great benefits, good looking cards, decent rewards structures (for travelors/big spenders).

If you have to justifty the annual fee, then you really can't afford it.

That last statement is really untrue. Some of the richest people in the world are notoriously frugal, and would want ANY fee justified, and for lesser mortals it still makes sense: I can spend money on a lot of things, is this the best/(or even just good) use of my money.

And your "great benefits / decent reward structures" are similar to justifying the annual fee, would you pay $10M a year in annual fee for those benefits? $1000? etc

Re: Why Amex?

BornSupercharged — Mon, 18 Feb 2013 13:18:16 GMT

@nickn86 wrote:
I don't get the advice re: Green Card. If the plan is to cancel after a year, why not just get the PRG instead?

I can't speak for everyone else, but if I decide to keep the card for the 2nd year I'd rather have a much lower AF (Green) than PRG. I'm kind of 50/50 on it atm to be honest, because if I keep it the 2nd year then its about 50bucks per year for having it, which isnt so bad. But I'd definitely cancel before the 3rd year / 2nd AF hits.

Re: Why Amex?

navigatethis12 — Mon, 18 Feb 2013 14:30:20 GMT

@Anonymous wrote:
@Anonymous wrote:
Great benefits, good looking cards, decent rewards structures (for travelors/big spenders).

If you have to justifty the annual fee, then you really can't afford it.
That last statement is really untrue. Some of the richest people in the world are notoriously frugal, and would want ANY fee justified, and for lesser mortals it still makes sense: I can spend money on a lot of things, is this the best/(or even just good) use of my money.
And your "great benefits / decent reward structures" are similar to justifying the annual fee, would you pay $10M a year in annual fee for those benefits? $1000? etc

Agreed. I am not poor, but I just do not believe in fees for something unless I have no other choice. If all lenders required annual fees, then I would obviously have to pay it. However, there are too many cashback cards that give high cahback and have no annual fee. All the benefits on American Express cards can be found elsewhere and not sure why people think that they should have to pay a company a fee to be able to get nice customer service.

Re: Why Amex?

Alcibiades — Mon, 18 Feb 2013 19:25:17 GMT

I put most of my regular spending (including monthly rent) through Amex cards. This way, I can earn Membership Rewards points, which I like to use for travel. I have booked a trip to Berlin and am working to book trips to Japan and either Hong Kong or Brazil mainly through Membership Rewards points. My main domestic airline is Delta, which works well with Amex cards (if I were a United flier, the Chase cards offer better rewards).

The fees aren't that cumbersome if you actually use the rewards. If you spend 2-3K a month on Amex, that is 24,000 to 36,000 points. That is enough to get a flight or two on American Airlines via Avios. If you send 50,000-60,000 a year, you could accumulate 120,000 points over two years, which is close to what you need to get a first class flight to Aisa, which could $5,000-$10,000. So two years of annual fees for several thousands of dollars of value, you are running ahead at that point.

Re: Why Amex?

Swapmeet — Mon, 18 Feb 2013 19:44:42 GMT

@nickn86 wrote:
I don't get the advice re: Green Card. If the plan is to cancel after a year, why not just get the PRG instead?

The advice seems to be as follows: Since the Green card is allegedly the easiest one to get, apply for that one to get in the door. At that point one can 1. Secure their coveted "member since date" and 2. Apply for any other Amex product without risking an HP for a denial.

I used a similar strategy, but with Delta Gold first, then BCE. I have been thinking lately "I wonder if the Blue Sky is a better travel card than Delta Gold -- it has no AF".