Amex Basic Charge Card.

Maskface

Can anyone explain how these cards work please? I thought it was a credit card and found it odd that it had no credit limit when I logged in. After enquiring they told me it wasn't a credit card but I was a bit confused at how they explained it to me. They said it adjusts to my spending pattern. But what if I only used it for a few small purchases for a couple of months then I need to make a large purchase? Does it mean it would have already adjusted to the previous pattern and reduce my credit limit accordingly? What's best credit or charge? Are there any pros and cons please?

Thank you 🙂

TadleyBaggie

An Amex charge card must be paid in full every month, you are not allowed to make a partial payment and carry a balance beyond the date payment is due. 

Maskface

Ok well I always pay in full so I'll be ok on that one. It's the bit where it adjusts itself to my spending habits I worry a little about in case of the scenario where I only use a small amount for a few months then make a large purchase. Does it mean it adjusts to the previous low usage and won't let me do a large purchase? 

Ebe_Scrooge

A charge card, in theory, has no limit - unlike a credit card, which has a defined limit.  So in theory you can go out any buy a brand new Ferrari with it - but it must be repaid in full when the statement arrives.

I think in practice (I'm willing to be corrected) that there is some sort of unofficial limit, but for most people it's much higher than they would ever use.  Plucking figures out of the air - lets say your normal monthly spend is £500, your limit would probably be something like £50,000.  And even that's not set in stone, if you plan to make a very large purchase then you can contact them.  As long as they're satisfied that you'll be able to pay it off, they'll usually give you the limit you need.

impoverishedtraveller

Read this:

https://www.americanexpress.com/uk/customer-service/faq.how-much-can-i-spend-on-the-charge-card.html

It explains what you should do for unusual large purchases.

The is a link to a spending power utility which you need to login to your account to use.

Also, for future, it’s best to understand what a product actually is/does before signing up for it.

Maskface

impoverishedtraveller said:

Read this:

https://www.americanexpress.com/uk/customer-service/faq.how-much-can-i-spend-on-the-charge-card.html

It explains what you should do for unusual large purchases.

The is a link to a spending power utility which you need to login to your account to use.

Also, for future, it’s best to understand what a product actually is/does before signing up for it.

Thank you. Oddly that link was about travel insurance but wasn't in English but I've found an English version which explains it so thanks for the pointer.

born_again

Just remember NO S75 protection on a charge card 👍

Maskface

born_again said:

Just remember NO S75 protection on a charge card 👍

Ooh good point!

Sandtree

Chargecard operation is very different to a credit card even beyond the having to pay in full each month and it not being a regulated product. Its not that there is a limit that they dont just tell you about because anecdotally appears to be a combination of both current balance and transaction value when deciding if to allow a transaction or not.

I used to use my chargecard for booking work travel (tends to be last minute and so expensive) and when travelling with consultants I would pay for their travel too to avoid the margin they add when recharging it. On one occasion the travel agent messed up and so put the £20k or so for a trip through three times... only 1 collection but 2 other authorisations so the card was showing a potential balance of circa £63k. At that point they contacted me about if I could pay it down at all but after explaining its and error and the £40k will be dropping off/wont be collected they said it was ok but warned a transaction over £1k would be likely to be declined until it did. I did a couple of transactions after that which were individually well below £1k but summed up to well over £1k and all went through fine.

Thankfully the £40k did drop off and my employers at the time were quick at paying expenses so all went back to normal at month end. 

Maskface

Thank you. That's really useful,. I can see I can't really use this the same way as my credit card and need to think carefully what I use it for.

Ebe_Scrooge

Maskface said:

Thank you. That's really useful,. I can see I can't really use this the same way as my credit card and need to think carefully what I use it for.

To be honest, charge-cards are of limited value to the average "Joe Public", in my opinion.  As previously mentioned, you don't get S75 protection, and the limit is usually far higher than what the average person would ever need.  For business travellers where they tend to have high expenses (business-class flights and the like) they are extremely useful - and the company is often settling the bill.  But for most of us mere mortals, an ordinary credit card is far more suitable.  Builds up your credit history, S75 protection, cashback/points/rewards of some kind if you're lucky.  And you have the option of not repaying in full every month (strongly NOT recommended, but the option is there should you need it).