American Express Zync Card Review

Notice: The Zync card from American Express has been discontinued; this article is for historical purposes only!

I have been a fan of Amex charge cards and used one myself for a while.

So what’s the Zync Card all About?

You may have noticed that American Express has been running ads to renew interest in the product that made Amex famous to begin with—charge cards.

Basically, Amex is betting that as consumers wrestle with the recession, try to spend wisely, and face credit cards that have raised rates and slashed credit lines, Amex’s charge cards will look attractive. Why is that, exactly? Charge cards like the American Express Green, Gold or Platinum card work like credit cards, with some key differences…

• Charge Cards Are Always Due-in-Full: You must pay your balance, in full, every month. Failure to pay results in steep late fees and the suspension (if not cancellation) of your card. That’s not pretty, but it’s actually better than getting caught in a credit card debt spiral for years.
• Charge Cards Do Not Charge Interest: There are no finances changes, but they do charge an annual fee.
• Charge Cards Do Not Have Credit Limits: That is, you don’t have a predefined credit limit. You can spend a reasonable amount per month based upon your income and history with American Express. If you want to make a big purchase, you should call them first to avoid the embarrassment of having your card declined.

Plus, unlike most debit cards:

• Charge Cards Protect You: They provide fraud and protection so that if your card gets stolen or you make a purchase from a sketchy merchant that doesn’t deliver, you won’t lose any money.
• Charge Cards Reward You: Just like rewards credit cards, charge cards pay rewards points for purchases. These rewards can typically offset these cards’ annual fees.
• Charge Cards Help You Build Credit: It’s something your debit card simply can’t do, and if you ever want to buy a home someday, you’re going to need to build credit some how.

Although Amex charge cards enjoy a classic, sophisticated image, to many young people they mind as well be their great-grandfather’s credit card. Amex is looking to change all that with the Zync Card.

Behind the Amex Zync Card

The American Express Zync Card works just like all its other charge cards:

1. You apply for it like a credit card. So although this card is aimed at youngish adults, you do need the beginning of a good credit history.

2. You make monthly charges to the card. There’s “no pre-set credit limit”, but you generally won’t be able to spend more than what Amex thinks you should be spending in a month based upon your income. Then, you pay the balance, in-full, the next month.

3. As with all American Express Charge Cards, the Zync Card has an annual fee. Good news is, at $25, it’s a bargain. The Green Card charges $95, the Gold Card $125 or $175 depending on your rewards program, and the Platinum Card charges $450. Although there are some benefits with each level of card, I have concluded that spending more for the various levels is mostly a prestige thing.

For the $25 annual fee, the Zync Card comes with the Amex Membership Rewards program, but users can also choose to pay an additional $20 a year for four different “packs” that yield additional rewards. For example, the Go pack doubles the points you earn on airfare; the Social pack doubles points at restaurants and on concert and theater tickets. Amex says it may add or adjust these pack benefits according to user feedback.

Should You “Go Charge”?

I started using an American Express charge card about two years ago. Personally, I enjoyed having the protection of a credit card without the temptation to rack up debt. I could avoid paying an annual fee and either use a fee-free credit card or my debit card, but I choose to pay a little bit to combine the convenience of both.

Eventually, however, I swapped my charge card for the Chase Freedom Flex℠ because I was out of debt and used to paying off my balance every month. I chose the Chase Freedom Flex℠ because a) it’s accepted everywhere, b) it pays straight cash back rewards which amounts to huge savings and c) there’s no annual fee.

I miss Amex’s great website and customer service, but charge cards aren’t perfect.

Even though you have to pay them in full every month, you can still spend money on a charge card when you don’t have the cash in your checking account, making it possible to overspend.

Plus, there’s the “no pre-set spending limit” thing. As I’ve written before American Express cards do have spending limits. Amex takes your credit history, your income (albeit the one you provide to them), and your spending history to calculate how much they think you can spend in any one month. If you exceed that amount, your card can be declined. I ran into this problem when I was using my card for business travel. Traveling for business, I was spending far more than I would’ve on myself, but Amex didn’t see the distinction. That said, I haven’t had a problem since I started using my card just for personal purchases.

What do you think? Do you use a charge card? Would you be interested in this new American Express Zync Card? Or does the idea of paying a fee something that is neither credit card or debit card seem crazy?