Comments on: Charge Cards: The Forgotten Option

By: Pat

Pat — Sat, 28 Jan 2012 21:13:34 +0000

American Express does offer a basic card with no annual fee.

By: Rod

Rod — Wed, 02 Dec 2009 21:54:19 +0000

Kevin, yes I agree with your points on business travel and not building up large balances. It should be noted that banks in some EC countries, especially Germany and I gather Austria often charge for credit card accounts, anything from €20-65 per year – with reductions if you spend over certain lavels. Therefore paying for Amex is not much different to many other banks offerings. However some Amex cards offer no charge if you spend so much on then, the Blue card for example is free if you spend over €3500 per year.

By: Kevin@OutOfYourRut

Kevin@OutOfYourRut — Wed, 02 Dec 2009 19:04:48 +0000

The advantage of a charge card, high annual fee notwithstanding, is that you don’t carry a balance in perpetuity.

In the credit industry there’s a saying, “once a Visa, always a Visa”. If you like the benefits of credit cards, but aren’t so good at managing your credit, charge cards are most definately an option.

It wasn’t mentioned in the post, but a lot of business people use American Express cards as an in-and-out account for travel and other expenses. It’s a great money management tool that keeps you from building up a large, revolving debt.

By: eric

eric — Wed, 02 Dec 2009 03:26:13 +0000

wait I think Diners Club cards are charge cards too…

By: eric

eric — Wed, 02 Dec 2009 03:08:49 +0000

Yeah I think Amex is the only one that still has them…but I’ll stick with no annual fee cards until there’s a better reason not to…

By: Rod

Rod — Tue, 01 Dec 2009 23:18:12 +0000

Well I have had all three types of cards, and here in Germany most banks will only issue credit cards which are really charge cards with set limits to customers. You can ask for a “credit card” but it is almost frowned upon. In general switching to this model has meant I simply stopped borrowing cash, which in the long run is sensible. Also I echo the comments about security. I use my cards for travel, so you are never sure if a restaurant is really genuine, therefore using a charge card avoids problems later on should card fraud occur. As for Amex the no-present spending limit really only means your predicted level of disposable income plus what you have shown you can repay. When I have had some rather expensive months I have to say Amex have been very helpful and have always granted me a spending limit of what I have asked for. Therefore if you ask in advance you can in effect get a sort of credit limit, it also has the effect of discouraging long term excessive spending.

By: CK

CK — Tue, 01 Dec 2009 21:01:27 +0000

I thought Diners Club was a charge card, no?

By: aua868s

aua868s — Tue, 01 Dec 2009 20:42:41 +0000

seems like charge cards are for the road warriors who could spill out out thousands of dollars every week on flight, hotel, rental car and entertainment…i was one among them for a while, but glad to be done with that spend time at home.

By: Jim

Jim — Tue, 01 Dec 2009 16:49:21 +0000

Ha, so do I. I didn’t realize the annual fee on some of these cards was that high!

By: hoht

hoht — Tue, 01 Dec 2009 16:42:05 +0000

Thanks for the post Jim, I always learn something new every time I come to your blog.

By: Jim

Jim — Tue, 01 Dec 2009 15:35:15 +0000

No that’s my fault, I didn’t look close enough and I didn’t realize the cards had such a high annual fee. I added a paragraph to the post to clarify the fees, thanks aua868s!

By: jsbrendog

jsbrendog — Tue, 01 Dec 2009 15:33:39 +0000

he does, just not the specific amount

“Finally, there is usually an annual fee. Since the credit card company isn’t earning revenue from interest on revolving balances, they turn to annual fees to make up the difference. You have to decide whether the rewards from the card, and the other benefits, can overcome the fee and the other drawbacks.”

By: jsbrendog

jsbrendog — Tue, 01 Dec 2009 15:33:00 +0000

i never knew this was an option. one i would never consider, but itneresting nonetheless…

By: James

James — Tue, 01 Dec 2009 14:52:41 +0000

there’s also the standard American Express green card, which is also a charge card, and i believe, annual fee less than 100 a year

By: Soccer9040

Soccer9040 — Tue, 01 Dec 2009 14:29:33 +0000

Thanks for bringing this up Jim. I hadnt even thought about charge cards. I wouldnt know where to find one even if I wanted to, but it could be an option for people who like credit cards, but lack the discipline to pay in full.

I pay in full, but I like the option of not having to pay if I couldnt. It hasnt happened in 10 years, but I like knowing that in a crunch I could get by just making my min payment.