Can You Improve Credit History with an American Express Gold Card?


The answer to “does AmEx Gold Card improve your credit history” may depend at least in part on what your credit history is.

For many years, American Express cards were due in full each month and they did not help build a credit rating because they did not establish a timeline of proper payments.

Today, American Express does offer revolving charge accounts but the answer to “does AmEx Gold card improve my credit history” is valid as the Gold Card from AmEx is not a revolving account but must be paid in full each month.

Advantages

The American Express Gold Card offers some good benefits for users. You can earn 10,000 membership reward points when you spend $500 in the first three months after opening your account. Points can be redeemed for select gift cards and can be used for travel, shopping, dining and entertainment venues.

You can apply online and have approval in 60 seconds but excellent credit is a requirement. You will need a credit score of 750 or higher to qualify for an American Express Gold credit card.

This is a credit card for those who want spending power without the limits and interest rate concerns of standard credit cards.

There is no preset spending limit for this credit card. That does not mean charge privileges are unlimited, however. Card holders planning to make a significant purchase can call customer service to learn what limits might be applied to their account as the unstated limit will depend on income and previous credit.

Disadvantages

The no-limit accounts carry a level of uncertainty for some consumers who are wary of having a transaction denied because they don’t know the limits that might be applied to the account. As stated above, this problem can be avoided with a phone call.

Does Gold card from AmEx improve your credit history? The answer may be “yes” and “perhaps”. Credit rating agencies will be aware of your application for the new card because your credit file will be accessed by American Express. Thus, there will be information indicating you have been granted an AmEx Gold Card.

As this is not a revolving charge account, the benefit to your credit file will simply be the absence of bad information. As long as you pay your statement in full monthly you will show as an account in good standing.

Traditionally, American Express credit cards have been discounted by lenders as a good indication of creditworthiness. This is because if you do not pay in full, the card will quickly be cancelled. Anyone who continues to have an American Express Gold Card is obviously in good standing.

Does an American Express Gold Card improve credit history – or might it do damage to your credit file? There is a problem with having no credit limit or standard monthly reporting procedures.

Your credit file may list the highest balance on your Gold Card as the credit limit in your file. Rating agencies dislike not having numbers to plug into their forms and it seems credit bureaus have chosen to use the highest amount you have charged on your Gold Card as an estimate of your spending limit.

This is not a problem unless you are applying for a mortgage or other large loan where debt to income ratio is a critical factor.

If you have charged $8000 on your American Express Gold Card that amount may show as an open line of credit even though you paid the $8000 two days after receiving your monthly statement.

Fees

There is no APR for this credit card as it is due in full each month. There is a $125 annual fee which is steep if you do not plan to use this account frequently.

The annual fee is waived for the first year. In addition, there is a foreign transaction fee of 2.5% of each transaction after conversion to U.S. dollars.

Other fees are a $35 late fee and a returned payment fee of up to $35. Should you fail to pay for two billing periods, your late fee will be 2.99% of the past due amount or $35, whichever is higher.

Summary

If you need the convenience of a no-limit credit card, the AmEx Gold Card is a great choice for those with excellent credit. Does an American Express Gold Card improve credit history?

It can help build a history as there is information about your application and approval but the no-limit feature can also cause problems in your credit file in some cases. This card will not damage your credit file but it is not the best choice if you want to improve your credit rating.