Calling all jetsetters – looking for some of the most competitive travel perks? 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 Charge Card boasts the chance to fly long-haul with its 25,000-first purchase bonus. 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 offering, 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 similar in many ways to their credit counterparts, 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 AMEX Gold Rewards racks up 30 per cent 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.
Click here to learn more about how charge cards work.
Another key difference with a charge card is lack of features such as balance transfer or cash advances. To qualify, applicants must have a pristine credit score (good credit and no bankruptcies for the past seven years), and a minimum $20,000 personal or household income. Also note that this card does come with an annual fee of $150, which is waived for the first year.
Sign Up Bonus: Great
This card offers a huge draw for freebie-seeking travellers, offering 25,000 American Express Membership points when $500 is charged to the card within the first three months. This is one of the largest signup bonuses on the market, equivalent to a long-haul round trip in Canada or continental United States. While the $500-purchase requirement is steep, consider this – at a two-points-on-the-dollar earning rate, it would cost cardholders $12,500 in purchases to earn the bonus value.
Earning Potential: Good
You’ll earn 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 earning travel purchase potential).
Point Redemption: Average
This rewards program is catered toward travellers, as transferring points to Aeroplan or Avios will give cardholders the most bang for their buck; 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 toward 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 will cost you 6,000 Membership points… not exactly worth a fifth of a flight.
Travel Insurance: Great
This card offers a full suite of travel coverage including:
Emergency Medical for the first 15 days outside your home province.
Trip Interruption which covers un-refundable parts 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 of up to $500 for all insured persons
Hotel / Motel burglary insurance up to $500
Travel Accident coverage of up to $500,000
Click here to learn more about the American Express Gold Rewards Travel Card>