January 18, 2010
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Charge or Credit; The Best Solution, Pt.2
Credit card abuse changes the playing field.The recent influx in credit card abuse by government agencies employees, have led many agencies to pull back on issuing them. Many of the government agencies now utilize a concept on the same order as a charge card known as purchasing cards. Employees are issued the card to pay for necessary work related expenses such as office supplies. Many public school systems have replaced issuing district credit cards with this type of system; it's a good way for them to keep track of spending and business expenses without incurring additional fees. Furthermore, it assists administrations in safeguarding against credit card abuse.
In the U.S., Visa and MasterCard who generally issue only debit and credit cards will sometimes refer to a debit card as a charge card; however, in theory there are little similarities. If an individual does not have the money in his account at the time of the transaction, the customer is charged a stiff penalty regardless of whether or not there was money in the account at the time the item was presented for payment. This is just one practice that banks recently implemented as a means to recoup losses from historical credit card defaults. It has brought a great deal of criticism to the banking industry.
Charge cards have become more appealing over the past year as Americans have become more and more disillusioned by credit card companies' unrelenting treatment. American Express's (AmEx) "Take Charge" ad campaign takes advantage of American unrest over this treatment by touting its interest free charge cards. The campaign which runs in magazines, television, and on the internet attempts to educate consumers on the benefits of a charge card in their plan to reduce debt in view of the current economic conditions. Although the AmEx charge card sounds like a good idea, many Americans would not quality. The company has some high standards for approval. Learn more in part three.