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To Zync Or Not To Zync?

by Jason Steele

ZYNC is a new card from American Express that is marketed to “young adults”.   In the library, the term young adult used to mean Nancy Drew or the Hardy Boys (yes, I am old), but today it probably means Harry Potter or something vampire related.    My hunch is that to American Express, young adult probably means the college age to mid 20s crowd.     Their idea is that this is a charge card, and you are therefore required to pay your bill in full every month.

Why A Charge Card?

I have previous compared a charge card to driving a car with sharp objects placed on the dash.   You dare not screw up, as the results can be painful.     In the case of a charge card, carrying a balance means that you are in default, and there are much steeper penalties and interest rates than a typical credit card.     Really, the point is not the comparison to a credit card, the point is the comparison to a debit card.    Debit cards are growing in popularity these days, especially among the younger set.   Short of overdraft fees, you can’t really go into debt with a debit card like you can with a credit card.    According to Ron Lieber at the New York Times, Amex believes that a charge card is an attractive offering that combines the positives of a debit card with the credit building potential of a credit card.

The Pitch

The marketing of the card is all about customization of it’s features, which is, like, you know, all the rage these days.    The card features a low $25 per year annual fee, but you can add up to four custom “packs” for additional benefits, for $20 each (the “Eco Pack” is free).   They have cool names such as “on the go” and the most important features of each pack are double Membership Rewards points in various categories.     Amex promises there will be more “packs” in the future.

What Do I Think?

First, I invite you to check out MrCreditCard’s earlier review of the card.   I am not much for flashy marketing and buzzwords,  but I already disclosed that I am not part of the target market.    I am also not a fan of debit cards, as I like the rewards and protections that credit cards offer, not to mention the free float, the interest free period before payment is due.    I am a fervent devotee of always paying my balance in full, so charge card vs. credit card is a meaningless distinction for me.    However, if holding a charge card is the difference between paying your balance in full and saying, “What the heck” and racking up interest, then a charge card is definitely for you.     If you are the kind of person who just can’t manage to keep your spending below your ability to pay your entire balance every month, you should probably stick with a debit card.

As for the rewards aspect, the Membership Rewards program is top notch in both flexibility and value.    Sure, some rewards have more value than others, but they are second only to the Starwood Amex in the number of airline transfer options, which is their highest value reward option in my opinion.     As for the “packs”, these are a neat idea, but choosing one or more brings the annual fee up to or beyond where their other charge cards are.   The question you need to ask yourself is, will the additional points gained in the particular pack justify the $20 spent.    I would figure that a Membership Rewards point is worth about 2 cents each, so you would need to spend over a $1,000 a year in the particular category to get your money’s worth.

Just remember, Membership Rewards is a proprietary point program owned by Amex.    Cancel your card, get canceled by Amex, or run afoul of their rules means you could forfeit all of your rewards.    With a program like the Starwood Amex, the points are with Starwood Hotels.   Like other airline and hotel loyalty points programs, they really don’t care if you and Amex aren’t getting along.    This is one of the reasons I remain loyal to the Starwood Amex.     That said, Starwood works for me and my spending and reward needs.    The Membership Rewards program is still great, and may work better for you and your needs.

Consider that a qualified endorsement of Amex’s newest offering.

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One Response to “To Zync Or Not To Zync?”

  1. Joshua Heckathorn Says:

    Another important thing to note is that charge cards can have an unintended affect on your credit score.

    Since they have no credit limit, the highest amount you’ve ever charged on your card is generally reported to the credit bureaus as your limit, which can really hurt your credit utilization ratio if you spend about the same amount each month.

    Say the most you’ve ever spent is $1,000, and you’ve already spent $750 this month, then you have a CU ratio of 75%. Ouch…

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