Amex Chargecard

bugsies

Hi,

So I'm looking to give myself a solid start in life by living debt free. Been spending the past week or so working out my future finances/budgets etc and definitely have no interest in ever getting a credit card - I have a sister who is the opposite of me with more maxed cards than I have shoes. But I am quite interested in getting an American Express Charge card to help me stay in control of my finances and earn rewards. I'll never spend more on it than I can afford to pay off, so I would be using it more like a suped up debit card . I don't mind the £60 annual fee.
My question is; if I pay this off in full monthly by directdebit will it help build my credit rating? I know having a credit card and paying it off monthly helps build a credit rating.
Any other advice you could give regarding using an Amex - I would use it to pay for everything in order to earn points and of course buy as much as possible through Quidco.

Also, do rewards points carry over each year or is that just wishful thinking? Is it worth going for the Gold or Platinum over the regular green card as I do quite a lot of short haul flying to Europe?

Archi_Bald

There is nothing wrong with having a credit card if you pay it off in full each month.

Paying for a charge card seems rather counter productive, and you can be certain that your benefits will never be higher than what you pay them. They are in the business of making money from you, not of giving money to you.

InsideInsurance

Archi_Bald wrote: »

Paying for a charge card seems rather counter productive, and you can be certain that your benefits will never be higher than what you pay them. They are in the business of making money from you, not of giving money to you.

The first paragraph was true but the above is rubbish.

You have to remember card providers have two revenue streams. The first is from fees and interest from the cardholder but the bigger part of their revenue comes from the percentage of each transaction they retain.

AmEx, Mastercard World, Visa Signature etc all have higher merchant fees than your traditional visa/ mastercard and so gives more money for the card providers to give back to you if they are so inclined.

Look at my Capital One card which is my backup for when AmEx isnt accepted, I pay no interest, I pay no annual fee and last year they gave me ~£85 cashback

bugsies

Does it help build a credit rating though?
I just don't want to own a credit card, it's just a case of principle even if there is benefits to owning one. I will be quite happy with my debit card + amex.

chanz4

amex if no other credit may be hard

boo_star

chanz4 wrote: »

amex if no other credit may be hard

I was going to say the same thing, Amex are notoriously picky.

I don't really see why there's a difference between a CC and Amex if you intend to pay it off in full every month. Why pay Amex (if you can get one of their charge cards) when you can get a CC that's more widely accepted, is free and with a cashback card, would actually pay YOU?

InsideInsurance

bugsies wrote: »

Does it help build a credit rating though?
I just don't want to own a credit card, it's just a case of principle even if there is benefits to owning one. I will be quite happy with my debit card + amex.

Unfortunately the only people that can truly answer are the next lender you apply to. Unlike the USA we do not have a single credit score here and instead lenders see the history and make their own judgement

If you have an AmEx chargecard it explicitly shows up on your CRA file as chargecard and not a credit card. Similarly it doesnt show what the limit is on the card. Contrary to the marketing a chargecard is not unlimited but the limit is more complex than a credit card.

Some may like the fact your history shows that you have a card that you pay off in full each month. Others may hate the fact they dont know how much AmEx will allow you to spend on the card thus making affordability calculations very difficult.

Certainly for mortgages there is increasing focus on affordability and so arguably the uncertainty chargecards create may cause increasing problems.