Calling all jet setters and potential credit cardholders – looking for a quick and easy way to get away? Turns out, one of the market’s largest sign up bonuses and comprehensive roundup of perks comes not from a travel rewards credit card – but a charge card.
The American Express® Gold Rewards Card boasts the chance to fly long-haul with its 25,000 Welcome Bonus points (for a limited time). It also offers great travel insurance coverage and premium security features such as purchase protection and buyer’s assistance. As well, being an American Express offer, cardholders will have access to their Entertainment Access features suite, including Front of the Line and Reserved Seating perks.
However, charge cards are not for everyone. They require serious discipline and the ability to pay the balance in full each month – misuse can lead to a deep debt trap. Read on to see if this card is a good fit for your wallet.
How is a charge card different from a credit card?
While charge cards are quite similar to credit cards, the glaring difference is how debt is accrued; a regular credit card allows users to carry their balances forward indefinitely, known as revolving debt. Charge cards must be paid in full each month, or will incur steeper-than-average interest charges.
The American Express® Gold Rewards Card racks up 30% interest on lingering balances.
So why use a charge card? They offer the same flexible spending power as a credit card, include perks and protection, and the ability to earn rewards on your purchases – a step up from simply using your debit card.
To qualify for the American Express® Gold Rewards Card, applicants must have a pristine credit score (good credit and no bankruptcies for the past seven years). Also, note that this card does come with an annual fee of $150. Each supplementary card is $50 annually, though the first supplementary card is free – meaning more reward-earning potential and savings if you and just your spouse, for example, share the account.
And as mentioned before, the card has a 30% interest rate if you don't pay your balance off in full upon your monthly statement due date.
Another key difference between a charge card and a regular credit card is the fact that a charge card lacks certain features like the ability to do balance transfers or get cash advances.
Sign Up Bonus: Great
For a limited time, this card offers 25,000 Membership Rewards® points as a welcome bonus, but only after $1,500 is charged to the card within the first three months of card membership. This is one of the largest signup bonuses on the market, equivalent to a long-haul round-trip flight within Canada or the continental United States. While the $1,500 purchase requirement sounds steep, consider this – that breaks down into spending just $500 a month, and at a two-points-on-the-dollar earning rate, it would cost cardholders $12,500 in purchases to earn 25,000 points.
Earning Potential: Good
The American Express® Gold Rewards Card earns two points on the dollar at eligible retailers. American Express defines this as stores where gas, grocery, pharmacy or travel is the primary product sold. Purchases at other retailer types will earn one point on the dollar, including third-party providers (e.g. if you’re buying a travel package through a deal site, you won’t get your full travel purchase earning potential).
Point Redemption: Average
This rewards program is catered towards travellers, as you can also transferring points to Aeroplan or Avios and benefit from their travel-focused programs. Cardholders can possibly get the most bang for their buck by transferring points to Aeroplan or Avios as points are transferred one for one with these programs. Another nice perk is the ability to pay for travel on the card, and immediately put points earned towards the balance.
However, booking must be done through Aeroplan, which still uses a per-capacity model for rewards seating; an increasingly outdated process compared to rewards programs that allow bookings through any airline, and only require that purchases be made on the card in order to qualify.
American Express also features an online mall where points can be redeemed for merchandise, gift cards, and other swag. However, compared to the value of an Aeroplan flight, the redemption rate is steep; for example, a glass tumbler set could cost you about 6,000 Membership Rewards® points… not exactly worth a fifth of a flight.
Insurance Features: Great
This card offers a full suite of travel coverage including:
- Emergency Medical Insurance for the first 15 days outside your home province.
- Trip Interruption Insurance, which covers non-refundable expenses associated with your trip in the case of cancellation. Coverage is $1,500 per insured person, capped at a total of $6,000.
- Car Rental Theft and Damage Insurance.
- Lost or Stolen Baggage, up to a total of $500 for all insured persons.
- Flight Delay coverage up to $500 for all insured persons.
- Hotel/ Motel Burglary Insurance up to $500.
- Travel Accident coverage of up to $500,000.
This post has been updated.