How to Build a Credit History with American Express

The American Express Credit Card, also known as AMEX, is a well-established and reputable company. It began as a shipping company in 1850 and gradually expanded into the financial sector, issuing its first credit card in the 1950s. Because of their excellent reward programmes, its cards are now among the most sought-after. As a result, they may be difficult to obtain. To obtain one, you must first improve your credit score. You’ll want to build a solid credit history with your card to get the best rates and benefits.

Method 1 Establishing a History with American Express

1. Fill out an application for an American Express Prepaid Card. A prepaid card is almost identical to a debit card in that you receive no credit and can only charge what you have deposited in the account. Because American Express does not report prepaid card transactions to credit bureaus, they have no effect on your credit score. However, American Express does keep an internal record of your prepaid card transactions. If you use the card frequently and deposit money on it on a regular basis, American Express may invite you to apply for a card with more stringent requirements.

This card may be the only way for many people with bad credit to get a foot in the door at American Express, but it will not improve your credit score. To make significant progress toward obtaining American Card’s high-end products, you will need to build your credit score with other companies.

Prepaid cards are typically a bad investment because they charge monthly fees as well as fees for each transaction you make with them. An American Express prepaid card, on the other hand, has only a $2 ATM fee, making it possibly the best product of its kind on the market.

2. Make an application for a USAA Secured American Express Card. This card is only available to military veterans and their families, but it can be a valuable resource for those who qualify. As with other secured cards, you must submit a deposit as collateral, and your credit limit will be limited to the amount of your deposit. However, your deposit will earn interest (currently 0.54 percent), and the card has a low APR ranging from 9.9 percent to 19.90 percent with numerous benefits.

If you qualify, this is a better option than the prepaid card because it not only establishes a history with American Express, but it also builds your credit score.

After two years of responsible use, the card will be converted into a regular credit card.

3. Apply for a charge card from American Express. American Express offers a variety of credit cards, including the Gold Card and the Green Card. The term “charge card” refers to the fact that all of your debts are due at the end of the month. A charge card cannot be used to pay over time.  Because this is less of a liability for the company, average or slightly above average credit will usually suffice when applying for a charge card. It will not improve your credit score as much as a regular credit card, but it will help you establish a history with American Express and has some of the best reward programmes available.

A credit score in the high 600s is usually required for a charge card such as the Gold Card.

You do not pay interest on your purchases because you pay the full balance every month.

American Express charge cards have an annual fee that ranges from $95 for the Green Card to $450 for the Platinum Card.

You can use a charge card to make purchases and pay them off. Paying your bill on time will help you build your credit history.

When credit bureaus calculate the frequency of on-time payments and the length of credit history, a charge card can have an impact on your credit score. However, because charge cards have no credit limits, they are not included in your debt utilisation ratio. 

4. Apply for a credit card from American Express. Unlike a charge card, a credit card allows you to carry a balance and pay over time. As a result, in order to be approved for an American Express credit card, you usually need a higher credit score than you do for a charge card. (American Express does not disclose information about credit scores required to be approved for a card.) American Express provides a variety of credit cards with various features such as travel miles, cash back, and business accounts.

American Express has a “Choose a Card” feature that can assist you in determining which card is best for you.

If you apply for an American Express credit card through your bank, where you have an active account, you may have a better chance of being approved. American Express cards are issued by Bank of America, Citi, Wells Fargo, USAA, First National Bank, Barclays, and PenFed.

Method 2 Building your Credit Score

1. Examine your credit score. You should check your credit score before applying for a credit card. This is especially true if you have no credit history or believe you have a bad credit history. (If you have a poor credit history, read these emindsca articles: Improve Your Credit Score or Get a Higher Credit Score Quickly.)

Annualcreditreport.com allows you to request a free credit report from each of the three credit bureaus once per year. Your credit score, on the other hand, is not included in your credit report. It does, however, contain information that can assist you in managing your credit score. It’s not uncommon for information to be mixed up, so someone else’s late payment or delinquent account may appear erroneously on your credit report. Correcting these errors will help you improve your overall score.

Equifax, Experian, and TransUnion each calculate your credit score separately. You should double-check all three. Because some smaller lenders will only report to one of the three, your credit score may vary from one to the other.

Credit scores range between 300 and 850. Depending on the credit bureau, the average credit score ranges between 650 and 700.

2. Apply within your financial constraints. If lenders notice that you have applied for credit on multiple occasions, your credit score will suffer and you will be less likely to be approved for a card. This can lower your score by as much as 10%. You should be aware of what your credit score qualifies you for and only apply for cards that you are likely to be approved for. American Express does not disclose which credit scores are required for which cards.

A credit score of 700 or higher will qualify you for the majority of cards, including some with excellent benefits.

If your credit score is between 600 and 700, you can probably get an average credit card, but you may have some difficulty. It is unlikely that you will receive a card with significant benefits. If available, look into the average credit score of those who have received a card that you are thinking about applying for. Do not apply if the average is significantly higher than your own credit score.

If your credit score is less than 600, you are unlikely to be approved for a credit card. Instead, you should begin by becoming a cosigner on someone else’s credit card or by obtaining a secured credit card. It is important to note that you cannot become a cosigner on an American Express account.

3. Conduct some online research. While American Express does not publish the average credit score ranges required for card approval, you can sometimes find out the scores of others who have been approved for a card. Lists of credit cards for people with “fair” and “average” credit are frequently posted on websites such as NerdWallet and Credit Karma. Members of the community on this site will occasionally post when they have been approved and what their credit scores were. This is not definitive information or a guarantee, but it may help you determine whether you have a good chance of getting a card.

4. Get a secured credit card. If your credit score is less than 600, a secured card can help you build it up to the point where you can apply for an unsecured credit card. You will need to deposit cash into your account as collateral for a secured card. Your spending limit will be close to what you deposited, making it almost like a prepaid card, except that the money you deposit as collateral will not count toward your payments.

Unless you are a military veteran or the family of a veteran, American Express does not offer secured credit cards. If you have bad credit, you should probably start building it with another company before establishing a history of transactions with American Express.

5. Create a linked account. If your parent or spouse trusts you, you can request to be added to her account. If they have good credit and use the card responsibly, it can help your credit score. American Express, unlike many other credit cards, does not accept co-signers. You can, however, become an authorised user on another person’s American Express account.

An authorised user can use a credit card but is not responsible for payments and can be removed from the account at any time. The parent can even set a customised spending limit for children under the age of 21 who are using their parents’ card. However, in recent years, some accounts have stopped reporting authorised user information to credit bureaus. American Express, fortunately, only reports positive information about authorised users, making it one of the better companies for increasing your score with an authorised account.

6. Make use of your international experience. Unfortunately, credit bureaus do not take into account any transactions conducted outside of the country. If you are moving from another country, you will have to start from scratch when it comes to building a credit score. You may be able to use your prior credit history to establish a line of credit in the United States, however.

If you have credit card records from another country, you can try to bring print reports of these along with proof of income to a local bank. Based on this information, some local institutions may be willing to offer credit cards.

Alternatively, if you had a credit card issued in another country and were a good customer, the company might be willing to issue you an American card to start building your credit with. Try to work with a company with which you have a history.

Method 3 Using Your Credit Wisely

1. You must pay your bill on time. The consistency with which you pay on time accounts for 35% of your credit score. Paying early or exceeding the minimum required payment has no direct impact on your credit score, but it may be noticed by some particularly savvy lenders. It is critical, however, that you do not allow your debt to accumulate to the point where you are unable to make on-time payments. Paying more than the bare minimum is frequently required to accomplish this.

Credit card companies are not allowed to report late payments to credit bureaus unless they are 21 days late, and most companies will wait until 30 days after the due date.

However, your credit card company is allowed to charge late fees for any payment that is even a day late, and two months of consecutive late payments can cause your interest rate to rise. This may have an impact on your ability to make future payments on time.

2. Maintain a favourable debt-to-credit ratio. The ratio of your debt to your maximum credit limit accounts for 30% of your credit score. Ideally, your debt should be less than 30% of the credit limit that you have been approved for.

This is where only paying the minimum balance is likely to harm your credit. If you only pay the minimum amount due, your debt is likely to grow over time, lowering your credit score.

This means that the higher your credit limit and the less you use it, the higher your credit score. Avoid department store credit cards, which frequently have very low credit limits. As a result, if you use it at all, you will exceed the ideal 30 percent ratio and harm your credit score.

3. Keep your credit card open. The length of your credit history is used to calculate 15% of your credit score. This is determined by the length of time your oldest account has been open, the length of time your most recent account has been open, and the average age of all of your accounts. This effectively means that you should keep your account changes to a minimum. Keep them open and don’t take out too many new cards.

4. If there is a problem, contact American Express right away. Examine your statement for any erroneous or incorrect charges. If you find charges on your statement that you believe are incorrect, contact American Express and request that these charges be reviewed and, if necessary, removed. If you are unable to make the required minimum payment, contact American Express immediately to arrange for a special payment arrangement.

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