ntention of paying back smaller amounts. For instance, you spend $2000.00 the first month and you pay it back in full, on time. The second month, you spend $4000.00 and do the same, and so on. You steadily build your ability to spend without interruption. And yes, there are some card holders who can spend $10,000 the first month, without being questioned. That is solely based on all of the factors I mentioned above (CBR score, debt to income ratio, etc…).

There’s also the option of pre-paying the account if your account is fairly new. Yes, we had customers who had the money (and were smart enough) to figure out that if their account was very new, they could send us $75,000 and charge that much and more. Understand that with a charge card, you are building a relationship of trust. It’s not a nickel and dime sort of account. If any of this frightens you, I’m doing you a favor. There is tremendous prestige in having an American Express account, specifically a charge card. American Exp

I am a former American Express employee. I worked for the company for eleven years, from 1990 to 2001. I then returned last year for a very short stint (about two months-couldn’t handle it- they hired me for collections!) I will certainly never bash them or bad-mouth them. They are an excellent company to work for.

From my experiences there, I have come to realize that many people could use some education about how the American Express Charge card products work. A charge card isn’t like a credit card. A charge card must be paid in full every 30 days. This is great for people who have a good deal of money in the bank, or those who own small businesses. The advantages of using the American Express card as opposed to just using your bank debit card are:

All kinds of great points going towards incentives
Extended warranty protection on purchases (yes, even cars).
You get to keep your money in the bank for an extra amount of time.
They send you a statement at the end of the year if you have certain types of accounts (gold, platinum, small business) that will help you when you get ready to file your taxes. This way you can have the expenses organized in one account. The list goes on.

But, exactly how does a charge card work? How do you know how much you can spend every month? This is the mystery question. This is what this article is about.

A charge card doesn’t have an established line of credit. A big gray area. At American Express, your ability to charge is based upon a few factors. The first one is your established payment and spending history with the company. If you’re new, you don’t have one. So, after that, the next consideration is your FICO score (or CBR score). It’s a number between 350 and 830. The higher you are to 830, the better you are as a credit risk. And last, your debt to credit ratio. This means, how much of the credit that’s been extended to you have you already used. Are you overextended already? American Express will know that.

Do you have a mortgage and you think that proves you’re a good credit risk? Wrong. If you have a mortgage, American Express considers you a greater credit risk because of your large monthly debt.

You’re a small business owner. You have one of those “Open” accounts from American Express. Your first month, you charged $10,000 and paid it back in full within the 30 day grace period. The next month, you’ve already got a balance of $30,000 and suddenly you get a phone call from American Express. They are politely advising you that you can’t put any more charges on your account until they receive a payment. You are astonished. “I thought this card didn’t have a credit limit”. Your bill isn’t even due, you just received it in the mail three days ago.

The poor rep on the phone has to explain to you all of the things I mentioned above (payment history, CBR score, debt to lending ratio, etc…) Now you are furious because this is the only card you intended to use to run your business.

To make it more complicated, you can also have a revolving account attached to your small business account, which allows you to have a line of credit to be used for some purchases. And, guess what? Even if you pay the charge card portion of your account on time every month, if Amex deems that your revolving balance has become too high, you can still receive that phone call.

The bottom line for small business accounts: if you intend to spend at least $150,000 per month, they strongly suggest you go ahead and give them your financials. Meaning, if you have that much in liquid assets, provide proof. You don’t want to run into an embarrassing situation if you can avoid it. God only knows how many times I got chewed out for things like this. But if you don't intend to spend that much, say you want to spend $10,000 a month, you may have to build your way slowly over the space of a few months (maybe three or four) by demonstrating that you have the ability and the good intention of paying back smaller amounts. For instance, you spend $2000.00 the first month and you pay it back in full, on time. The second month, you spend $4000.00 and do the same, and so on. You steadily build your ability to spend without interruption. And yes, there are some card holders who can spend $10,000 the first month, without being questioned. That is solely based on all of the factors I mentioned above (CBR score, debt to income ratio, etc…).

There’s also the option of pre-paying the account if your account is fairly new. Yes, we had customers who had the money (and were smart enough) to figure out that if their account was very new, they could send us $75,000 and charge that much and more. Understand that with a charge card, you are building a relationship of trust. It’s not a nickel and dime sort of account. If any of this frightens you, I’m doing you a favor. There is tremendous prestige in having an American Express account, specifically a charge card. American Expr

of the year if you have certain types of accounts (gold, platinum, small business) that will help you when you get ready to file your taxes. This way you can have the expenses organized in one account. The list goes on.

But, exactly how does a charge card work? How do you know how much you can spend every month? This is the mystery question. This is what this article is about.

A charge card doesn’t have an established line of credit. A big gray area. At American Express, your ability to charge is based upon a few factors. The first one is your established payment and spending history with the company. If you’re new, you don’t have one. So, after that, the next consideration is your FICO score (or CBR score). It’s a number between 350 and 830. The higher you are to 830, the better you are as a credit risk. And last, your debt to credit ratio. This means, how much of the credit that’s been extended to you have you already used. Are you overextended already? American Express will know that.

Do you have a mortgage and you think that proves you’re a good credit risk? Wrong. If you have a mortgage, American Express considers you a greater credit risk because of your large monthly debt.

You’re a small business owner. You have one of those “Open” accounts from American Express. Your first month, you charged $10,000 and paid it back in full within the 30 day grace period. The next month, you’ve already got a balance of $30,000 and suddenly you get a phone call from American Express. They are politely advising you that you can’t put any more charges on your account until they receive a payment. You are astonished. “I thought this card didn’t have a credit limit”. Your bill isn’t even due, you just received it in the mail three days ago.

The poor rep on the phone has to explain to you all of the things I mentioned above (payment history, CBR score, debt to lending ratio, etc…) Now you are furious because this is the only card you intended to use to run your business.

To make it more complicated, you can also have a revolving account attached to your small business account, which allows you to have a line of credit to be used for some purchases. And, guess what? Even if you pay the charge card portion of your account on time every month, if Amex deems that your revolving balance has become too high, you can still receive that phone call.

The bottom line for small business accounts: if you intend to spend at least $150,000 per month, they strongly suggest you go ahead and give them your financials. Meaning, if you have that much in liquid assets, provide proof. You don’t want to run into an embarrassing situation if you can avoid it. God only knows how many times I got chewed out for things like this. But if you don't intend to spend that much, say you want to spend $10,000 a month, you may have to build your way slowly over the space of a few months (maybe three or four) by demonstrating that you have the ability and the good intention of paying back smaller amounts. For instance, you spend $2000.00 the first month and you pay it back in full, on time. The second month, you spend $4000.00 and do the same, and so on. You steadily build your ability to spend without interruption. And yes, there are some card holders who can spend $10,000 the first month, without being questioned. That is solely based on all of the factors I mentioned above (CBR score, debt to income ratio, etc…).

There’s also the option of pre-paying the account if your account is fairly new. Yes, we had customers who had the money (and were smart enough) to figure out that if their account was very new, they could send us $75,000 and charge that much and more. Understand that with a charge card, you are building a relationship of trust. It’s not a nickel and dime sort of account. If any of this frightens you, I’m doing you a favor. There is tremendous prestige in having an American Express account, specifically a charge card. American Exp

know that.

Do you have a mortgage and you think that proves you’re a good credit risk? Wrong. If you have a mortgage, American Express considers you a greater credit risk because of your large monthly debt.

You’re a small business owner. You have one of those “Open” accounts from American Express. Your first month, you charged $10,000 and paid it back in full within the 30 day grace period. The next month, you’ve already got a balance of $30,000 and suddenly you get a phone call from American Express. They are politely advising you that you can’t put any more charges on your account until they receive a payment. You are astonished. “I thought this card didn’t have a credit limit”. Your bill isn’t even due, you just received it in the mail three days ago.

The poor rep on the phone has to explain to you all of the things I mentioned above (payment history, CBR score, debt to lending ratio, etc…) Now you are furious because this is the only card you intended to use to run your business.

To make it more complicated, you can also have a revolving account attached to your small business account, which allows you to have a line of credit to be used for some purchases. And, guess what? Even if you pay the charge card portion of your account on time every month, if Amex deems that your revolving balance has become too high, you can still receive that phone call.

The bottom line for small business accounts: if you intend to spend at least $150,000 per month, they strongly suggest you go ahead and give them your financials. Meaning, if you have that much in liquid assets, provide proof. You don’t want to run into an embarrassing situation if you can avoid it. God only knows how many times I got chewed out for things like this. But if you don't intend to spend that much, say you want to spend $10,000 a month, you may have to build your way slowly over the space of a few months (maybe three or four) by demonstrating that you have the ability and the good intention of paying back smaller amounts. For instance, you spend $2000.00 the first month and you pay it back in full, on time. The second month, you spend $4000.00 and do the same, and so on. You steadily build your ability to spend without interruption. And yes, there are some card holders who can spend $10,000 the first month, without being questioned. That is solely based on all of the factors I mentioned above (CBR score, debt to income ratio, etc…).

There’s also the option of pre-paying the account if your account is fairly new. Yes, we had customers who had the money (and were smart enough) to figure out that if their account was very new, they could send us $75,000 and charge that much and more. Understand that with a charge card, you are building a relationship of trust. It’s not a nickel and dime sort of account. If any of this frightens you, I’m doing you a favor. There is tremendous prestige in having an American Express account, specifically a charge card. American Exp

our business.

To make it more complicated, you can also have a revolving account attached to your small business account, which allows you to have a line of credit to be used for some purchases. And, guess what? Even if you pay the charge card portion of your account on time every month, if Amex deems that your revolving balance has become too high, you can still receive that phone call.

The bottom line for small business accounts: if you intend to spend at least $150,000 per month, they strongly suggest you go ahead and give them your financials. Meaning, if you have that much in liquid assets, provide proof. You don’t want to run into an embarrassing situation if you can avoid it. God only knows how many times I got chewed out for things like this. But if you don't intend to spend that much, say you want to spend $10,000 a month, you may have to build your way slowly over the space of a few months (maybe three or four) by demonstrating that you have the ability and the good intention of paying back smaller amounts. For instance, you spend $2000.00 the first month and you pay it back in full, on time. The second month, you spend $4000.00 and do the same, and so on. You steadily build your ability to spend without interruption. And yes, there are some card holders who can spend $10,000 the first month, without being questioned. That is solely based on all of the factors I mentioned above (CBR score, debt to income ratio, etc…).

There’s also the option of pre-paying the account if your account is fairly new. Yes, we had customers who had the money (and were smart enough) to figure out that if their account was very new, they could send us $75,000 and charge that much and more. Understand that with a charge card, you are building a relationship of trust. It’s not a nickel and dime sort of account. If any of this frightens you, I’m doing you a favor. There is tremendous prestige in having an American Express account, specifically a charge card. American Exp

ntention of paying back smaller amounts. For instance, you spend $2000.00 the first month and you pay it back in full, on time. The second month, you spend $4000.00 and do the same, and so on. You steadily build your ability to spend without interruption. And yes, there are some card holders who can spend $10,000 the first month, without being questioned. That is solely based on all of the factors I mentioned above (CBR score, debt to income ratio, etc…).

There’s also the option of pre-paying the account if your account is fairly new. Yes, we had customers who had the money (and were smart enough) to figure out that if their account was very new, they could send us $75,000 and charge that much and more. Understand that with a charge card, you are building a relationship of trust. It’s not a nickel and dime sort of account. If any of this frightens you, I’m doing you a favor. There is tremendous prestige in having an American Express account, specifically a charge card. American Express also treats those who maintain their relationship in good standing very generously. They highly expect that you will be doing business with them for the next twenty or thirty years (and many customers do). So learn the rules and you can do well with your account, whether it’s to run your business or personal use.