January 18, 2010
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Charge or Credit; The Best Solution, Pt.3
Tuff qualifications for additional perks.Whether you apply for an American Express credit card or charge card, qualifying could be tuff. The average credit score (FICO) by current accounts approved are 760 and above. A limited number of credit card customers with a score over 620 are approved. Typically, these individuals have higher incomes and significant savings.
When thinking about applying for an AmEx credit card or charge card, you'll want to consider the fees involved. Most AmEx cards have annual fees that range from $25 for its new Zync card to $450 a year for. The Zync card is targeted to individuals in their 20's and 30's needing that extra push to stay on top of their finances. Individuals just coming out of college and baring high credit card and student loan debt typically benefit from the extra push to only spend what they can afford to repay when the bill hits the mailbox. Zync cardholders can pay an extra fee for access to additional perks.
Late fees are a large contribution to charge card companies' revenue. AmEx customers pay $35 or 2.99 percent of the balance whichever is higher. Business owners who use their card for most business expenses will pay dearly if they maintain high balances and pay late. However, if you typically have smaller balances, your late fee will be comparable to credit card accounts. By taking your average monthly credit card spending and multiplying it by 2.99 percent, you can calculate what you might pay in late fees if you were using the AmEx charge card. Consumers need to consider their spending habits in determining which program will be of greater benefit.
Something else to consider when making your decision is that unlike credit cards, charge cards don't offer a cash advance benefit. Additionally, consider the reward's packages available with both cards. If you haven't been taking advantage of your card's rewards program, choose a card with fewer fees and no rewards.