Review: American Express Essential™ Credit Card

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In August, American Express introduced the American Express Essential™ Credit Card to the Canadian marketplace. This brand new low-rate card differs from its competitors because of its 8.99% annual interest rate, whereas the majority of products within this category have rates ranging from 9.90 per cent to 14.99 per cent. It also has no annual fee, unlike many of its competitors. Additionally, new cardholders can take advantage of its low 1.99 per cent interest balance transfer rate for the first six months.

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Card Features: Average

The American Express Essential™ Credit Card is mainly aimed at giving cardholders a bit of a break on long-term balances by offering a much lower-than-average annual interest rate. And because it’s an American Express card, it offers plenty of other features, including:

  • A balance transfer option at the time of application
  • The Front of the Line program, giving cardholders advance or special access to events, reserved tickets, e-updates and special offers
  • 24/7 customer service
  • Apple Pay
  • No fee for supplementary cards

Annual Interest and Balance Transfer Features: Average

Cardholders must take advantage of the 1.99 per cent balance transfer at the same time as applying for the American Express Essential™ Credit Card or that rate won’t be available going forward. You are allowed to transfer up to half of your assigned credit limit to a maximum of $7,500. If that balance is not paid off within the six-month period, the rate goes up to 8.99 per cent – the same as the regular annual interest and cash advance rates.

In addition, the annual interest rate goes up to 23.99 per cent if the cardholder misses two minimum monthly payments within one year, and jumps up to 26.99 per cent if a minimum payment is not made for more than two consecutive billing periods or if three payments are not made within one year.

While this card does carry a lower interest rate than many others, the interest charges that come into play if you don’t make the minimum payment in time are quite steep. Our recommendation is always making the minimum payment – or more – each month, to avoid these charges.

The Fine Print: Average

We’re reading and deciphering the fine print for you! For the American Express Essential™ Credit Card:

  • Extra fees: While there’s no fee for balance transfers at the time you sign up for the card, both these and Amex cheques incur a fee that’s three per cent of the full amount if you decide to take advantage of these features at a later time. Overlimit fees come in at $29 per billing period, while dishonoured payment fees are $25 each.
  • Minimum payment: This is the lesser of EITHER the total of $10, interest, overlimit fees, dishonoured payment fees, installment amounts and fees and any previously billed and still unpaid minimum payments, OR the entire new balance on the billing statement.

Those can become hefty charges – and more reasons to make at least the minimum payment each billing cycle.

Interest Savings: Good

We did some number-crunching and when measured against other cards in both the low interest and low balance transfer categories, the American Express Essential™ does pretty well. For example, making just the minimum payment on a balance of $2,660 over a two-year period, cardholders could save up to $423.74 in interest in comparison to the average credit card.

Over a one-year period with the same balance on the card, the balance transfer feature can save you $366.03 over a comparable average card.

Insurance and Other Features: Average

The American Express Essential™ Credit Card also offers a few extra perks, including:

  • Up to $100,000 in travel accident insurance when charging your plane, train, ship or bus trip to the card
  • Buyer’s assurance protection plan
  • Purchase protection plan
  • Fraud protection guarantee
  • Emergency card replacement

Our Final Word

The American Express Essential™ Credit Card is a solid card to add to your wallet if you tend to carry a balance and your goal is to pay off debt within a short period of time. However, it’s absolutely essential – no pun on the name intended – to keep up with all your payments, or the extra charges can have you spiraling into further debt. Also keep in mind that just like the majority of low interest cards, the Essential does not earn rewards, and it has few perks outside of the Amex Front of the Line program.

How to Qualify for the Card

  • You are a Canadian resident and you have a Canadian credit file
  • You are the age of majority in your province or territory of residence
  • You have a personal annual income of $15,000 or more
  • You have not filed for bankruptcy in the past seven years

Are you carrying the best credit card for your spending habits? Check out the Credit Card Rewards Calculator and find out!

Related Topics

Credit Card Debt / Credit Card News / Credit Card Reviews / Credit Cards / Credit Cards 101 / Lifestyle / Lifestyle News / Personal Finance / RSM News / Using Your Credit Card / Your Budget

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