My First Amex: Which Charge Card or Credit Card Should You Get?

American Express offers a wide range of charge cards and credit cards. Charge cards technically don't have a set spending limit, and you must pay them in full each month. Credit cards can be core Amex cards or co-branded cards, and you can carry a balance (although we do frown upon that; pay your cards off each month).

With all the options, which product is the best "first Amex"? 

I recommend getting an American Express card AFTER you've finished obtaining all the Chase credit cards on your wish list due to the 5/24 rule. By the time you finish with Chase cards, you should have a solid credit foundation that will let you apply for premium cards.

People who are not currently American Express members have a higher likelihood to get targeted for increased signup bonuses like the 100,000 point Amex Platinum offer via CardMatch.

My first Amex card was the Amex EveryDay card, and I regret not going for the Amex Platinum first since I lost out on the additional 40,000 points. 

Amex Platinum (as of 2018)

  • Normal offer: 60,000 MR points*
  • Targeted offer: 100,000
  • Difference: 40,000
  • *MR = Membership Rewards

You can be targeted for the 100k offer via CardMatch even if you're already a customer, just less likely.

My Credit Journey Recommendation

The following is my credit journey recommendation. American Express falls into step 4: choose your own adventure. 

1. Student or secured (Card #1)

[let age for 12 months]

2. Chase Freedom/CFU (#2)

[let age for 1-3 months]

3. Finish off 5/24 (#3-5)

4. "Chose your own adventure"

Value of Membership Rewards Points

Membership Rewards points can be worth 0.6-2.0+ cents per point (CPP) depending on how you redeem them.

Redeeming MR points:

  • 0.6 CPP = cash back
  • 1 CPP = travel
  • 1.25 CPP = cash back (only via Amex Plat Schwab)
  • 2+ CPP = transfer partners

The main questions you need to ask yourself are:

1. Do you travel?

2. Do you want the Amex Plat Schwab?

The Charles Schwab Amex Platinum lets you redeem MR points for cash back at a rate of 1.25 CPP.

How much are 40k MR points worth?

If you miss out on the 100k Amex Platinum offer, how much is the opportunity cost worth?

40k MR opportunity cost

a) Cash back

  • 40k * 1 CPP = $400

b) Travel (low)

  • 40k * 1 CPP = $400

c) Travel (high)

  • 40k * 2 CPP = $800

At a minimum, you're missing out on $400 in opportunity cost. If you utilize transfer partners for travel, you could miss out on $800.

Doesn't having Amex EveryDay make it easier to get approved for the Platinum?

The short answer is no. I've seen plenty of people get approved for the Amex Platinum as their first Amex card. 

The main question you need to ask is if one hard inquiry is worth $400 to $800?

Maybe if you're mortgage hunting, in which case you should already have a minimum card base of 3-5 cards set up.

In some cases, it might make sense for to get the Amex EveryDay card. Amex EveryDay is great for:

  1. Supermarket spend (ideally 2+ CPP use case)
  2. Keeping MR points alive
  3. If you "need" an Amex card "right now" and:
    1. Want to travel in the future
    2. Can't get the Amex Platinum due to min spend / high annual fee

Exceptions

The exception for not getting the Amex Platinum first is if you fly on Delta often or you stay at Hilton properties often.

Exceptions list:

1. Amex Delta Gold

  • Lots of domestic flights and checked bags savings are $400-$800 (i.e., worth losing out on 40k MR)

2. Amex Hilton Ascend

  • Need Gold status for work stays. Depending on # of stays, benefits can obviously add up.


Editorial Note: Opinions expressed here are the author's alone, not those of any bank, credit card issuer, airlines or hotel chain, vendors or companies, and have not been reviewed, approved, or otherwise endorsed by any of these entities. 

UGC disclosure: These responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.