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Is an American Express a credit card? It depends…

by on Thu September 27, 2012 • No Comment

American Express is big on ‘membership’ – and the associated privileges. People in the Northeast and California know it very well, and the rest of the world is definitely familiar with it.

But we still get frequently asked a basic question – is an American Express card a credit card that lets you pay in installments like a Visa or MasterCard?

The answer…well it depends…and the icon on the front tells the difference..

Platinum American Express

An American Express *CHARGE* card (NOT a credit card) – note the ‘Centurion’ oval on the front

The original American Express cards are ‘charge’ cards that require you to pay your balance in full each month. These still exist, and are the flagships of American Express in the form of the familiar American Express ® Gold Card and The Platinum Card® from American Express among others. These typically require Excellent credit for approval and carry an annual fee of over $90. You can identify them by the oval shaped ‘Centurion’ man pictured on the front.

The charge cards carry extra benefits like the full Membership Rewards points program and  access to special events and preferred seating at concerts and theaters. They also have no preset credit limit. Now that doesn’t mean you can spend any amount you want – they can and do block purchases out of your range – but you may have more flexibility for big purchases than a comparable regular credit card.

An American Express *CREDIT* card

But there are many American Express cards that are regular credit cards. They work just like Visa and MasterCard credit cards, with the difference that they’re on the American Express acceptance network. Nearly all of them earn some kind of reward, either cash, points, or points from an airline or hotel program.

  • They all have traditional credit limits on what balance you can hold at any given time.
  • Most require ‘Excellent’ credit but some are geared toward the entry level with ‘Good’ credit.

Here is a list of some of American Express’ regular credit cards:

  • Blue Cash Everyday® Card from American Express – No annual fee, 3% cash back at supermarkets, 2% at gas stations and department stores
  • Gold Delta SkyMiles® Credit Card from American Express – Earns Delta SkyMIles, free checked bag on Delta flights
  • Starwood Preferred Guest® Credit Card from American Express – Earns Starwood hotel points

So why would you want an American Express credit card? Well if you’re after Delta or Starwood miles and points American Express is your only option. American Express talks a lot about its member benefits too but to be honest the features (like travel insurance, car rental collision coverage) are pretty standard on Visa and MasterCard credit cards. Where American Express does stand out is customer service, which is consistently ranked highest among large credit card issuers according to JD Power.

Tip: American Express will ‘back date’ your credit history. That is, any American Express card you open will have its credit history reported using the date of the very first American Express card you hold. That is, if you opened your first card in 2005, all future American Express card accounts you open will have their credit history start in 2005. That’s a benefit for your credit report, as more of your accounts show a longer history.

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