American express card (non credit)

[jingles]

Hi guys,

Just wondering about the non credit based American express cards.

How exactly do they work?
Is it just like a normal credit card where you are issued with a statement giving you ~2-3 weeks to pay the statement however the payment must be received before the statement is due (whereas on a credit card you can optionally pay before the statement is due)

 

[notzac]

Charge card - Wikipedia, the free encyclopedia

As I understand it, you're sent a statement that must be paid in full each month. I don't know what the payment terms are for AmEx charge cards - I imagine you'd have two weeks to pay - but you wouldn't have to pay before a statement is issued.

 

[serfty]

They are called "Charge" cards and work as you described.

With Amex the amount is payable on statement issue but in reality they give you around 2½ weeks.

 

[Diesellife]

Amex card is a charge card.

In short, it provides credit facility up to the max statement period (Roughly 45days??)

At the end of each month, a statement is issued and is required to pay in full (Balance) before the due date.

Example: Used $1000 in the month of Apr, you will required to pay the balance of $1000.

Normally there is no interest charged at all for charge card as you pay in full every month. Heavy penalty interest / late charge can be imposed if you do not pay in full.

There is no specific limit for charge card or rather like a hidden limit.
So long you keep a good payment history etc, you will be able to spend more every month before having a decline on transaction.

Hope this helps.

 

[oz_mark]

Normally there is no interest charged at all for charge card as you pay in full every month. Heavy penalty interest / late charge can be imposed if you do not pay in full.

or 'liquidated damages' !

 

[Diesellife]

liquidated damages - This is a term of common law.

Your knowledge sounds extensive... are you a lawyer Oz_mark??

 

[oz_mark]

Not a laywer - just what the T&C's of the product refer to it as

If we do not receive full payment of the new Charges
billed on your monthly statement by the date of the
next monthly statement, the unpaid balance will be
identified on your next monthly statement as “Previous
​

​

​

Balance”. If this occurs, you are in default and you
agree that we may charge you liquidated damages as
specified in the Schedule. Liquidated damages may
themselves be included in a Previous Balance in any subsequent statement until paid in full.​

 

[Keith009]

I've often wondered - is there a "hidden" limit for charge cards? I mean, could I just put a car on a charge card for instance? I'm suspecting not as the website says that you have to prove your ability to repay AMEX, whatever that means. How does one know what kind of limit they have?

Getting quite annoyed by having credit tied up by hotel pre-auths, and wondering if having a charge card would be useful for those instances.

 

[serfty]

... Getting quite annoyed by having credit tied up by hotel pre-auths, and wondering if having a charge card would be useful for those instances.

This is an extremely useful facit of charge cards.

In April I pre-authed everything on a Gold Business charge card, then paid on my 1½ pp$ earning Amex Plat.

The most I ever spent at one time on this charge card was over $7K for two LONE4's last year.

 

[Homer]

I've often wondered - is there a "hidden" limit for charge cards? I mean, could I just put a car on a charge card for instance? I'm suspecting not as the website says that you have to prove your ability to repay AMEX, whatever that means. How does one know what kind of limit they have?

Good question. I have asked AMEX this same question several times and they usually respond with something like "the level that you have demonstrated you are able to repay". But an AMEX rep once told me that they do have some sort of limit recorded which flags transactions for further, human intervention. Obviously this has to be the case with a "no limit" card and I know that if I ever did try to use my card to pay for a shiny, new Quattroporte then it would definitely attract their attention...

 

[Diesellife]

Just as Homer said...

Last time in HK, my card bounced just a little over 11000.Then I called AMEX and told them that I'm traveling overseas...

At the end of the trip, the balance was about 37k and had not called again during my trip. So in theory, my limit jumped from 11000 to >37k for 2 weeks or so...

Also, my friend (Who worked in Amex before) told me that different categories of transactions will affect the approval system.

Eg. Hotel (Accommodation) / Food / Beverage transactions will be more likely to get approved compared to cash advance...

 

[Nutcase]

Yes there is a limit - There has to be but its more fluid than a credit card

"No pre-set spending limit" doesn't mean Unlimited credit

 

[docjames]

Or just get the CC (or 2!) with a high limit (works for me).

 

[jingles]

Thanks for all the info guys

They are called "Charge" cards and work as you described.

With Amex the amount is payable on statement issue but in reality they give you around 2½ weeks.

2½ weeks, so it is pretty mush the same as a credit card which you always pay off before the due date.

 

[Evan]

J<..>
Eg. Hotel (Accommodation) / Food / Beverage transactions will be more likely to get approved compared to cash advance...

But also to add that with Amex i have had no issues getting cash advances in the thousands of dollars, even 000's if you write a personal cheque to yourself to cover it. But there is a limit of how many 000's per card you can take as a cash advance and its not that high each month, i think about 5k from my memory on my plat chg card.

 

[aschmid]

To my understanding the payment terms for a charge card is 51 days versus the usual 55 days on a credit card - so a difference of 4 days.

What I have found though that on the statement you receive from AMEX it won't tell you that, just "ask to pay immediately after you receive the statement.

However if you use their internet banking you can go in and on your charge card it will tell you when the payment is due same as on the credit card.

As I have both charge and credit card and both cut of at the same date I can clearly see that the charge card payment terms are shorter by 4 days.

Also as others said before you have to pay the card in full every month, which means that whatever you spend is stated as the amount due. In comparison to that the credit card only requires you to pay the minimum repayment amount - of course incurring interest for the rest, but not necessary to pay all.

I had previously an offer from AMEX where they gave me a kind of line of credit attached to my Gold Charge Card which was basically a good idea if you didn't want to pay full every month but he issue with that was if i remember correctly is that only transaction over a certain amount ($200) would automatically go into the loan and the rest on the card. Then your repayment would first pay of the card and secondly the loan. The automatic payment however would only take what's on the card, but not what's on the loan ....

Anyway, not sure if i get this correct now but it was some weird setup that surely end up costing you a lot of interest and it was setup that you would in some way or other fail to pay the full amount and they can charge you interest. Not very helpful for customers in my opinion.

Ooops, rambling on and getting of topic ...

 

[NYCguy]

Anyway, not sure if i get this correct now but it was some weird setup that surely end up costing you a lot of interest and it was setup that you would in some way or other fail to pay the full amount and they can charge you interest. Not very helpful for customers in my opinion.

They're not in the credit business to save their customers money!

 

[aschmid]

They're not in the credit business to save their customers money!

That's probably right, but from their behavior also not in the business of keeping loyal long term customers!

Which makes me think they must have a signup rate that is higher than their attrition rate otherwise they wouldn't act like that or nobody is really looking at such business metrics?

 

[AnonymousCoward]

Anyway, not sure if i get this correct now but it was some weird setup that surely end up costing you a lot of interest and it was setup that you would in some way or other fail to pay the full amount and they can charge you interest. Not very helpful for customers in my opinion.

You had the basic description correct.

However the "line of credit" is effectively the same as using a corresponding credit card (interest rates are the same etc) and not paying in full. I had to use this facility for a couple of billing cycles whilst I was finishing some renovations and almost immediately starting a world trip.

I had a few unbudgeted expenses on my trip, and a few delays organising funding from my bank for the renovations (compounded by being overseas).

I don't think you're being charged any more than if you put the same on your credit card. Though the break out of the items in the statements are a little confusing, there is a clear set of items at the top that indicate how much you owe in total, and how much of that total doesn't have to be paid right now (which you can elect to pay interest on).

 

[serfty]

It's termed the "Flexible Payment Option" or FPO.

For my business account any charge of $500+ automatically goes against it.

While there is a "credit limit" it is not automatically enforced - last year I puchased two LHONE4's which totalled more then the "Limit". It went though ok.

Of course, with the next statement, that balance over the credit limit was transferred back and had to be paid in full that month.