Q & A With Amex, Part 2 and Comments

Are there any distinctions between the annual fees or other fees on credit cards vs. Charge cards?

Every card has a price, and we are upfront about ours.  Take our Green Card for example. For only $8 a month, less than a movie ticket, you get:
•    The ideal payment tool for people who want control of their finances
•    Rich rewards you can use with no expiration, cap or black out dates,
•    Access to everything from a hot concert to the local theatre
•    Exceptional customer service

Plus having the American Express Card in your wallet is like carrying around a security blanket: your purchases are protected and we are there for you when you are traveling.

We’re also attaching some fact sheets that show the different Charge Cards we offer and the benefits and services that come with each one.

What reward programs are associated with Amex’s Charge card offerings?   How do they differ from the reward card offerings on the credit card products?

Amex: Every Charge Card comes with the Membership Rewards program. The program allows Charge Cardmembers to earn one point for virtually every dollar charged on eligible purchases and provides Cardmembers lots of opportunities to earn double, triple and even up to 10x bonus points on purchases.

With more than 500 partner brands, the program literally offers rewards choices from A to Z—Cardmembers can redeem for everything from an Apple computer to a trip to the zoo.   The rewards options range from the outrageous to the ordinary, meaning you can use points to treat your family to a fancy vacation or for everyday necessities, such as gas cards to fill up the tank or gift cards at merchants like Gap and Old Navy for back-to-school shopping.  The program puts rewards within reach for all types of Cardmembers.

The program is designed to offer Cardmembers rewards that are the most relevant to their lifestyles, which is why partners include some of the best brands and companies that Cardmembers frequent in order to shop, dine and travel. And unlike some programs, Membership Rewards points have no expiration date, and there is no limit on the number of points a Cardmember can earn.

In addition to earning one point for virtually every dollar charged on eligible purchases, Charge Cardmembers have plenty of opportunities to make their spending even more rewarding. And now through March 15, 2010, Charge Cardmembers can earn double points on U.S. standalone gas and grocery purchases up to $1000 dollars of eligible spend each month. To take advantage of the offer, Cardmembers must enroll their existing Charge Cards.

In terms of other rewards programs, American Express offers a variety of products because consumers want choice – we don’t have a one-size-fits-all philosophy.  We have a broad and diverse set of consumer card products and services, including charge cards, credit cards, reward cards and co-brand cards.  All American Express Charge and Credit Cards offer a number of core benefits and services, at no extra cost, as part of the value of being a Cardmember.  Cardmembers also have access to a wide array of rewards, unique experiences and world-class customer service.  Each product offers a different level of travel, entertainment and lifestyle benefits.

My Thoughts

The Charge Card is an old product, and is the fore-bearer of the credit card that we all hold.    The distinction seem to be philosophical and psychological.    It is philosophical in that the card is designed to be paid off in full every month.   This is the foundation of my personal philosophy with regards to charge/credit cards.    And yet, I do not have a charge card among my American Express cards.    It is not that I plan on carrying a balance ever, it’s just that I still fail to see the point.  My favorite Amex remains the Starwood Amex and the Business Platinum which gives me 5% off of gas, for now.   Neither are charge cards, yet I am, of course, free to pay off their balance in full every month.

The psychological difference is the key.   For many, the temptation not pay their balance in full is strong, and the option to incur interest is just too tempting.   Amex keeps referring to their Charge Cards as a “smarter way” to pay.   I am not so sure.   In my view, this is primarily an advantage for customers who need the sense of obligation and the penalties of default to ensure they consistently do the smartest thing, pay their balance in full every month.

In Conclusion

It is good to have a contact at Amex to ask questions, and I did not get any surprises this time around.   I am now trying to speak with someone about their Financial Review process, a subject that I know that many readers would like to have some light shed on.   I hope things get more interesting in the future, and I am willing to direct your questions (not specific to your account)  to Amex as appropriate.

What would you like me to ask them?