Amex overrated?

[Anonymous]

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@Anonymous wrote:

Point of having multiple cards is to maximize your points/cash back.  Should be able to do 2-3% as I assume most spending on basics so gas/supermarkets.  So with AMEX BCP, could do closer to 3-4%. Also, people play the bonus game with credit cards as well (think of thepointsguy website).  Signing up cards for the bonuses.  If I was making 20k, probably spend a bit more time figuring out how to maximize my money via credit cards (which I think your father would approve)

On the other hand, if you have problems controlling your spending, then maybe credit cards aren't for you.  I know some like Amex Charge cards for that reason as you basically have to PIF every month.

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If my father had his way, I wouldn't have a credit card at all. He didn't like it when I got one at 18 years old and now at 31 he still disapproves. His position is that if you can't pay cash for it,  you don't need it. (Though of course his house is financed.)

I spend maybe $150/mo on groceries. The rest is pretty much bills across the board. It sucks, but I quit my full-time job to go back to school. Yes, that's difficult. especially after doing it for 5 years. But it is what it is.

As for controlling my spending, actually, I'm controlling it amazingly well right now. But I do miss the days when I had more money.

[myjourney]

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@Anonymous wrote:

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@Anonymous wrote:

Point of having multiple cards is to maximize your points/cash back.  Should be able to do 2-3% as I assume most spending on basics so gas/supermarkets.  So with AMEX BCP, could do closer to 3-4%. Also, people play the bonus game with credit cards as well (think of thepointsguy website).  Signing up cards for the bonuses.  If I was making 20k, probably spend a bit more time figuring out how to maximize my money via credit cards (which I think your father would approve)

On the other hand, if you have problems controlling your spending, then maybe credit cards aren't for you.  I know some like Amex Charge cards for that reason as you basically have to PIF every month.

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If my father had his way, I wouldn't have a credit card at all. He didn't like it when I got one at 18 years old and now at 31 he still disapproves. His position is that if you can't pay cash for it,  you don't need it. (Though of course his house is financed.)

I spend maybe $150/mo on groceries. The rest is pretty much bills across the board. It sucks, but I quit my full-time job to go back to school. Yes, that's difficult. especially after doing it for 5 years. But it is what it is.

As for controlling my spending, actually, I'm controlling it amazingly well right now. But I do miss the days when I had more money.

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http://ficoforums.myfico.com/t5/Credit-Cards/Approved-for-Discover-but-nothing-else/m-p/2380493#M672915

You should work on reducing your debt to make a brighter financial picture

[Anonymous]

Sorry.  I still am not getting the if you don't pay cash for it, you don't need it statement.

What is the difference between paying cash, or using credit card and PIFing aside from the free points/miles/cash back?  Basically paying with credit card is safer, gives you some kind of return on your spending, and builds your credit for the future (assuming you use it correctly).

[Anonymous]

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@myjourney wrote:

You should work on reducing your debt to make a brighter financial picture.

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If I didn't control my spending then I'd be

[Anonymous]

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@Anonymous wrote:

Sorry.  I still am not getting the if you don't pay cash for it, you don't need it statement.

What is the difference between paying cash, or using credit card and PIFing aside from the free points/miles/cash back?  Basically paying with credit card is safer, gives you some kind of return on your spending, and builds your credit for the future (assuming you use it correctly).

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I'm not saying you're doing it wrong. Honestly, I think a lot of it is buried in Christian philosophy. "The borrower is slave to the lender." That kind of thing.

What I can say for me personally is that it feels better when things are done and done. If I'm going to buy a car, if I can give a man cash for that car, that feels better.

[09Lexie]

Amex is not for everyone and if you feel more comfortable with cash then its your choice. Whether it be Amex, Discover or Chase- charge and credit cards have pros and cons and with a little bit more independent research you might change your opinion of cash only.

Feel free to continue to ask questions and I'm sure opinions will be offered.

[Anonymous]

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@09Lexie wrote:
Amex is not for everyone and if you feel more comfortable with cash then its your choice. Whether it be Amex, Discover or Chase- charge and credit cards have pros and cons and with a little bit more independent research you might change your opinion of cash only.

Feel free to continue to ask questions and I'm sure opinions will be offered.

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Indeed. As you say, I'm sure opinions will be offered. . .

[Anonymous]

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@Anonymous wrote:

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I'm not saying you're doing it wrong. Honestly, I think a lot of it is buried in Christian philosophy. "The borrower is slave to the lender." That kind of thing.

What I can say for me personally is that it feels better when things are done and done. If I'm going to buy a car, if I can give a man cash for that car, that feels better.

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 "The borrower is slave to the lender." is a really weird idea to me. I mean, I choose to use credit when it benefits me. Presumably the lender is benefitting, too, but ultimately I am in control. I can take my business to other lenders or pay cash if there were no incentives to use credit. Sure, I could overuse credit, just like I shouldn't have had that chocolate milkshake that I drank today, but it's really up to me to make responsible choices for myself. I am better off having the choice to use a lender, than being forced to always pay cash. Maybe there are some people that need a straitjacket to prevent themselves from going to lenders, but fortunately I am not one of them. Hopefully most others will use credit rationally and to their benefit as well. Otherwise, sure, don't use it. Either way, the individual controls whether lending relationships are initiated or not and chooses the terms.

[enharu]

Several others have explained about the rewards aspect, so I will explain further about the other aspects of Amex.

Customer service is generally better than other lenders, and all Amex cards, except the prepaid and gift cards, have built in extended warranty, return protection, purchase protection and other features. If I am buying an expensive electronics for example, I would definitely put it on my Amex over other cards even if they had better rewards, solely because of the free extended warranty, which could cost me an extra 50-150 otherwise to buy from square trade, and that claims with Amex are generally pretty painless. Other lenders or certain extended warranty companies make it a living hell to file claims most of the time. I may not keep the item for more than a year to utilize the extended warranty, but its a nice safety net nevertheless. Purchase protection is nice if you ever lose your stuff. Return protection is nice especially when you are dealing with sellers on eBay, since returning items to them for any reason is usually either troublesome or costly.

And then many would also say Amex is a symbol of social class, which is somewhat true for a couple of their cards.

[takeshi74]

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@Anonymous wrote:

It seems to me that, for the very rich with $100,000+ credit lines and Centurion cards, there are a lot of benefits to being in Amex's good graces. But for everyone else it's just another credit card whose issuer is a petulant child, with seemingly random credit line decreases that come out of nowhere and financial reviews that border on privacy invasion. On top of that, Amex's acceptance rate by merchants is spotty.

So for those who love Amex and are Amex supporters, what am I missing?

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That just hasn't been my experience with AmEx.  Be very careful assuming that you can extrapolate broad, sweeping trends from forum postings no matter what the topic.

Also keep in mind that cards aren't one-size-fits-all -- like most things in life.  If a card doesn't meet your needs then move on to something that does, regardless of the issuer's name.  Cards are subjective, just as the words "overrated" and "underrated" are.   Any card can be overrated or underrated depending on who you ask.

I've found backdating beneficial.  I have opened 5 new cards this year and that would have killed my AAoA if not for backdating.  Instead, 2 of those new cards are backdated to 1998.  The 3X CLI has also been beneficial to me.  I haven't really used the other benefits and protections much but it's good to know that they're there.  The BCP's 6% on groceries is also useful considering that my spend on groceries was just over $5K in the past 12 months.

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@Anonymous wrote:
So it really goes back to my original question. . . For those who don't have thousands of dollars to run through the card every month, what is the value of Amex?

I have a few thousand to run through all my cards each month.  That said, I don't run "thousands" through my AmEx cards every month and I still find them useuful.  Again, it's a subjective matter and if you don't find AmEx useful then it's probably not useful for you.  Plenty of others do find it useful and it's really not up to them to convince you that it's useful.  That's your responsibility.  Value is subjective.  If it wasn't then everyone would use the exact same cards (and the same everything else for that matter).  The value in AmEx isn't solely based on how much is charged through the card.

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@Anonymous wrote:

Maybe it's because I was brought up in an environment where cash > credit (my dad is a Financial Peace University instructor, after all) but I do prefer to just pay cash for things when possible. If I put it on a credit card, it's because I can't pay it off right this moment.

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...and that's one way to handle things.  Another way is to treat credit cards as cash as well.  There are a few things that I charge if I can't pay them off but generally nothing goes on that can't be paid off.  A lot of regular bills get run through my cards as well for points, cash back, bonuses, etc.

As others have stated, cash doesn't provide the purchase protections that AmEx and other cards offer.  Cash doesn't help me if a merchant refuses to refund.  Cash doesn't cover items that I buy and break.  Cash doesn't extend the warranty on what I buy.  Cash doesn't come with its own price matching.

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@Anonymous wrote:

Is it just me or is the forum software here weird? A lot of times my responses don't go through.

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It's quirky but I've never had a response not go through.