Take Charge of Your Credit, Debt Solutions

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We charge up a lot of debt with credit cards and debit cards, but have you purchased with a charge card yet? Not a credit card. Not a debt card. Yes, a charge card.

The primary plastic pusher of charge cards is American Express (AMEX). AMEX charge cards require cardholders to pay off their balance in full each month and-or billing cycle. There is usually an annual membership fee for the charge card but no interest or other monthly fees like regular credit cards as the account holder is not able to hold an outstanding balance for more than the month it was charged on the account. This also, for the more disciplined, reduces the ability for impulse purchases and fast spending habits credit has graciously provided at the cost of your home and happiness.

AMEXs campaign –Take Charge- intends to capitalize on consumers consumed by annoying outrageous creditor fees. The way it goes, the campaign boasts the benefits of charge cards as a way to control debt during a period where such is much needed and desired by the average Joe. AMEXs goal is to spark that furious fire within consumers against harsh creditor fees and never ending debt.
As stated earlier, for the more disciplined, the charge card is not for everyone. Aside from being in control of your spending habits, in order to get a charge card you must show that you have a good history of controlling your spending habits. Yup, it takes credit to get a charge card and rest assured you have to have a pretty solid score to be approved by AMEX.

And then comes the fees. While you may not be charged interest monthly we brushed upon annual fees in the start of this. Annual fees can range from $25, to $40, to $450 and it depends on what card you choose from AMEX so read your terms carefully when applying. The good news? These fees also cover membership to the rewards program and additional perks per plastic.
One of the hardest things people have with using a charge card instead of credit is their spending habits and the realization of paying the balance in full each month. Like any other creditor, late fees will be applied to your account if the balance is not paid in full every month. AMEX late fees range from $35 to 2.99 percent of the balance (whichever is greater) …yikes.

PRO: Unlike the majority of credit cards, you have 40 to 50 days to satisfy your bill. Regular credit cards give 25 to 30 days for the billing cycle.

PRO: A flexible payment option is also available that allows you to carry a balance for travel purchases over $200. In this instance though, minimum payments and interest fees are applicable…so you may as well just consider it a credit card should you need to make payment options.

PRO: There are no cash advance options with a charge card. Foreign exchange transactions are charged a 2.7 percent fee. On the other side, Citi and BOA charge 3 percent. 

Your spending limit is adjusted via your spending habits and AMEX monitoring your credit report. You are not advised what your cap is but can speak to a service rep for tips regarding your accounts and spending abilities. 

Even though the rules of charging are different than credit the game is still the same when it comes to how your credit score is affected. Both are considered revolving credit on your credit report. 

For the right person a charge card is a great alternative to –Take Charge- of ones credit and avoid incurring massive amounts of credit debt with credit cards. If you have a decent credit score and can be disciplined with your spending, check out the options available through AMEX charge cards. Consolidate your other credit cards for  lower interest rates and get out of the credit game altogether. With raising rates and tougher terms maybe it is time we all took charge of our credit card woes. A charge card with AMEX can still help you build a solid credit history without falling deeper into debt with credit cards.

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