Thinking a charge card is what’s been missing in your wallet? There’s no denying the many benefits, the most obvious being the absence of a credit limit. With that, though, comes a few altered rules – the balance is generally required to be paid in full each month. It’s a trade-off, but for those who are most disciplined, it’s a great financial tool and one that won’t cost you in interest rates since you’re paying it off each month.
That’s not all though, generally, each time you use your charge card, there’s the risk that the company will choose to decline your purchase. These decisions are made in real time and are determined by a number of formulas that determine whether or not your purchase makes financial sense. That’s a turn-off to some consumers, but for those with incredible credit histories, it’s usually not anything they worry about.
The confusion comes in when you attempt to understand how these factors play into your credit scores. If there’s no credit limit, then how do you know how your debit utilization ratio is figured? The rule of thumb for years has been to not go over about 25% of your available credit lines. This lets potential creditors know that you have a good grasp on your financial responsibilities. Of course, that’s not exactly possible with charge cards.
Your charge card is reported as an open line of credit, versus a revolving credit card account and your high limit is used as sort of a measuring stick to provide an idea of just how much you can pay off each month. It’s not rocket science, and it’s certainly not etched in stone, but in the final analysis, that’s simply how’s it done and believe it or not, charge accounts are not looked at as closely as traditional installment or revolving accounts. The goal with charge cards, of course, is to ensure the balance is paid in full each month.
Here are a few of the more popular charge cards on today’s market, starting with an exceptional charge card for business owners.
Plum OPEN Business AMEX
Plum Card from American Express OPEN is the right choice for many business owners. The caveat is to ensure a solid credit history to ensure approval. The opportunities associated with with this AMEX are many, including impressive tools that can help business owners of all size grow their companies.
There’s also the option of breaking up your balance into two monthly payments, making it easier for those difficult months, provided you pay at least 10% of the balance as your first of two payments. That said, paying in full within 10 days of making a purchase earns you a 1.5% discount.
There is an annual fee with this business American Express card of $185, but it’s the first year and any additional cards you request for employees will add another $45 to your annual fees (per card).
Another reason this is a popular choice for business owners has to do with the OPEN Savings program. It’s the perfect way to earn significant discounts as you spend and those savings can range from 3% up to to 25%.
If your business requires travel, either domestic or international, you’ll travel easy with travel accident insurance, a card baggage insurance plan, car rental loss and damage insurance and other helpful benefits.
American Express Preferred Rewards Gold Card
The American Express Preferred Rewards Gold is the classic AMEX charge card; it requires an excellent credit score for approval, charges no interest due to its charge card classification and there’s a $125 annual fee, which is waived your first year.
There are many benefits with this offer, including purchase protection, access to hard-to-find tickets for concerns, sports events and other events along with identity theft protection are just a few. All cardholders are enrolled in the Membership Rewards Program. For those who spend $500 during the first ninety days will earn an additional 10,000 bonus points – which can be used for a $100 gift card and other equally impressive perks.
Reward points are earned per each dollar spent and can be used as soon as they’re accumulated.
These are just two examples of today’s charge cards. Be sure you understand the specific dynamics associated with these and any other charge card offers you’re considering. Reading the terms and conditions before applying ensures you’re happy with your decision.
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