Amex is short for American Express. They are among the most popular credit card providers, because they offer a wide variety of cards and several attractive benefits. Here’s an overview of how it works, what the benefits are, and some suggestions on which of their cards to consider.
How it works
As with any other credit card, you want to know about three key aspects: what credit they offer, what charges are made on using it, and how the payments are made.
Credit: American Express directly offers you credit as soon as you apply for their card. You don’t have to juggle any third-party financial institutions. The credit line is between you and Amex, no banks or other cards involved. There are several different programs for American Express cards, so you can choose your priorities.
Some of their cards focus on nice rewards, such as cash back or airline mileage. Others offer low fees or complete fee waiving. This is notably handy if you intend to use Amex’s services as a business owner. A direct link with your credit provider will help you monitor the credit rating of your business and manage its eligibility for any future loans.
Charges: whenever you purchase something with your Amex card, the charges are handled directly between them and the store you just shopped at. First, the transaction information is sent directly to American Express.
They pay the store whatever amount you’re being charged for the goods or services you bought with the card (minus the processing fees for the store). This streamlined process is what sets Amex apart from other card issuers who process purchases through third parties, like banks.
Payments: after a charge, you’ll be making a direct payment to American Express. Any interests and fees are usually added to your bill, but there’s a grace period for most of their cards. During that time, no fee or interest is charged whatsoever.
It’s worth noting that Amex will demand larger minimum payments than its competitors. This might seem daunting, but the trade-off is that your balance is paid off that much faster.
What benefits does Amex offer?
Depends on the card you choose! They’re available from both Amex themselves and reputable retailers like David Jones American Express Card. Retailers usually offer additional benefits when you use the cards for their goods and services, too. Here’s a general summary of the top three Amex cards:
Blue Cash Preferred cards give incredibly versatile cash back rewards. These cover purchases at supermarkets, with streaming service providers, via Amazon, and in transit. Transit purchases award you a 3% cash return, and supermarkets and streaming purchases return 6%. With this card, you get 20% back on Amazon shopping in the first six months. If you spend $3,000 in those six months, you get $200 back.
The Gold card comes with $120 for Uber and a Membership Rewards Points system. Use the card, collect points. Use the points to get membership rewards. If you use your Amex Gold at a US-based supermarket, you get four times the points than you would in a non-Us one. The same happens if you pay with the card in a restaurant, but it applies worldwide. Finally, if you spend $4,000 in the first six months, you get 75,000 membership reward points.
The Platinum card also has a Membership Rewards Points system, as well as roughly $1,000 in credit for various services. Using the card for flight or prepaid hotels earns you five times the reward points of standard purchases, and you get ten times more points if you shop at any of the small businesses listed on the Shop Small Map.
You get either $85 for pre-check with the TSa or $100 of Global Entry credit. You’re given $200 for Uber, hotels, and airline fees each. Another $240 is for digital entertainment, such as Netflix. And, if you spend $6,000 in your first six months of Platinum card ownership, you get 125,000 membership rewards points.
Most American Express cards require an annual fee, but some don’t. The six cards without attached fees are:
- Hilton Honors
- Blue Cash Everyday
- Blue from American Express
- Delta SkyMiles Blue American Express
- Cash Magnet
- Amex EveryDay
These cards also offer nice rewards, but no notable perks. They also have a lower acceptance rate with merchants.
So, let’s recap. Amex cards offer the unique benefit of direct credit. There’s no hassle with banks or other financial institutions serving as intermediaries. You also get a grace period during which you don’t pay any interest or fees on your new card.
The most notable downside of owning an Amex card is the payments. Most of them come with relatively high annual fees. Depending on the card, those fees go from $95 to $695. In return for this investment you get two important perks.
First, with overall larger, consistent payments, you’ll pay off your balance sooner than you would with some other card that charges less but draws it out. Second, each card offers highly useful benefits. You get credit for important services, good cash return on several purchase categories, and can collect membership points for various rewards. You can choose whichever card best suits your priorities and your lifestyle.