What’s the deal with Charge Cards?

[wasCB14]

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@Anonymous wrote:

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@Anonymous wrote:

The problem w/ Charge cards is the credit requirements to get one are lofty in comparison to a revolver or secured card someone starting out or starting over would qualify for.  Even a seasoned profile can sometimes have an issue getting an Amex issued.

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I don't think that is true in general.  For many, an Amex charge card is easier to get certainly than an Amex revolver, but easier than many other revolvers.   With the need to PIF each month, Amex's exposure is limited so (generally) underwriting appears easier.

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Keep in mind a lot of those seasoned profiles with "an issue" either:

• have an old BK or negative history with Amex, or
• already have a few 5-figure Amex CLs

[redpat]

Homework OP, do your homework about travel perks and Amex MR reward cards.

[Anonymous]

This is my homework 😒

[redpat]

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@Anonymous wrote:
This is my homework 😒

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This would be considered using Cliff Notes......No short cuts, lol!

[Anonymous]

I run most of my spending through my Gold charge due to the ability to pile up MRs for future use. I have hotel and airline cards, whose points are only and specifically for that particular hotel and airline. Earning MRs means I’m not locked into one option.

As stated above, one big advantage is the ability to run high expenditures without worrying about UTI hits, and it works for the bank, Amex in this case, because the computers reserve the right and ability to approve or decline any charge they like, based on Amex’s comfort level that the customer will repay it - they have essentially active, real-time risk mitigation vs a revolver where they grant a credit line that has no active oversight.

The ability to run whatever charges I want through the card, within my ability to pay, and to earn broadly generalized returns and rewards to use where I want, is the big point for me. My other cards lock me into what I can do with the rewards, but Gold gives me much greater leeway to fit the rewards into whatever use is of most benefit at the time. Im not a baller living on a half million a year by any means, and the annual fee of $250 is heavier than any other fee card I have (my others are $95), but $250 isn’t exactly backbreaking once per year and I can pull more benefit than that from the MRs. And if the $250 actually is that big a deal for someone looking at Gold, in this instance, then perhaps a revolver is a better option than a card requiring PIF monthly.

[Anonymous]

Thanks for the information guys! It seems like it is something that I would benefit greatly from. Gardening for now and my Amex accounts only shows pre-approved for all co-branded cards but when I decide to app again I am definitely interested in adding a charge card.

MR points seem to be a great value. When green is available again what are your thoughts vs. gold? $250 AF is definitely doable, but $550 is steep considering how much I would use the benefits.

[Anonymous]

Green will depend on what they offer when it’s rereleased. It was kind of pointless before other than a place to pay to hold MRs (not a great option - Amex ED is a no-AF MR earner). See what it comes with.

Gold is a lifestyle and daily driver card. Platinum is a travel card and if you don’t travel a lot, it’s awfully hard in my mind to justify a $550 AF.

[Anonymous]

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@Anonymous wrote:

 Amex in this case, because the computers reserve the right and ability to approve or decline any charge they like, based on Amex’s comfort level that the customer will repay it - they have essentially active, real-time risk mitigation vs a revolver where they grant a credit line that has no active oversight.

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I think revolvers have active oversight too, all issuers also reserve the right to decline any charge, consider all the (potential) fraud cases being caught by the issuer.    Amex charge almost certainly uses a different algorithm, but revolvers are being watched too!

[HeavenOhio]

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@Anonymous wrote:
As stated above, one big advantage is the ability to run high expenditures without worrying about UTI hits

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Unless you're dealing with Experian FICO 98, which is absolutely affected by charge card utilization. And of course, you don't want to blow off the ways that charge card balances can affect all FICO scores.

[Anonymous]

Of course. My main point was that charging on such a card doesn’t affect the percentages. I could have been more explicit about that.