Charge card vs. credit card questions

[spacedog]

Hi all.

I have a couple of questions regarding the Amex Platinum I’m hoping someone here might be able to advise me on.

1) If you kept the charge card rather than switching to the credit card, are you protected against fraud the same way? I understand there’s no official Section 75 agreement regarding you and a retailer you purchase from, but what about if your card or details are cloned and someone goes on a spending spree? This happened to me once years ago on an old MBNA credit card and it was dealt with swiftly with no loss to me. Do charge cards work the same way?

2) If you only use the charge card and not a credit card, is there any way at all to make an educated guess as to what sort of limit you’d be offered if you switch to the credit card?

Thank you.

[mindspit]

1 – Taken from Amex website:

Unlike the Charge Card, the Credit Card is regulated by the Consumer Credit Act, which gives you a range of rights. For example, if you buy goods or services on your Credit Card, Section 75 of the Consumer Credit Act can give you extra protection if things go wrong. This is because the Credit Card company is jointly and severally liable for any breach of contract or misrepresentation by the retailer. This means you can also put a claim to the Credit Card company. You don’t get this protection with a Charge Card.

You still get Amex purchase protection with the charge card.

2 – In the app there is a button “check spending power” you put the amount in and it will give you an instant response if you can spend that amount. The FAQ’s for this section says that this does not involve a credit inquiry and does not affect your credit score.

[mindspit]

Sorry I misread your second question. I don’t know if you can fine out your credit limit if you switch. I downgraded my charge card recently and enquired about moving to the free rewards credit card and was told there was no direct path I would have to apply for the credit card as new application with all the checks that go with that and then close the charge card account.

[JDB]

There is no formal path to move from a charge card to a credit card. That’s the law, not Amex being difficult. Amex is required to ask you to make a new credit card application that is run through its standard credit and eligibility checks. There is also no way of identifying in advance what your credit limit will be as that will depend on the precise information supplied in your credit card application. The credit card limit will bear no relation to the theoretical max spending power on your charge card. There really isn’t any educated guessing of the limit you might get but other limits you already have with Amex and other cards will have an impact.

In respect of s75, you technically don’t have that on a charge card but Amex’s terms and conditions essentially say they will replicate what s75 offers. That then becomes a matter of contract rather than law, so you have to trust Amex. The terms of s75 are incredibly onerous on card companies and great for the consumer so if you had a big s75 case that Amex disputed, you are potentially worse off.

[spacedog]

Thank you mindspit and JDB, really appreciate your help. I’m trying to decide if the switch is worth it, I like the spending power and flexibility of the charge card, but after some (luckily minor) fraudulent activity on another credit card, and how good they were at dealing with it all, it got me thinking about potentially switching to the credit card.

Thanks again!