Q: My goal is to eventually get an AMEX Gold, but I have a long ways to go because my credit is awful. How can I get a secured credit card from them that I could use to get my foot in the door? I figure it could be beneficial to establish a relationship with them now so that when my credit score improves, I will have a better chance at getting the Gold.
A: On a somewhat regular basis, I will see someone ask on the forum “Does American Express have a secured credit card?” or “How can I get their card with bad credit?” Unfortunately the answer for both questions is the same… it’s not going to happen.
They’ve never offered a secured credit card before. And when it comes to their unsecured cards, as you can imagine their requirements are picky. You can’t have any recent history of major delinquencies/charge-offs AND you need to already have an established history.
Your best approach is this…
Step One: Open a secured card
So you can’t get an American Express secured credit card, but of course you can get one from another bank. Doing that is your first step to improving your credit.
Need some good recommendations? Check out this review.
You also may want to try this tool out. Who knows? The results might surprise you.
Step Two: Manage your card the right way
There’s no escaping the past (until it drops off your report) but you can still think of today as Day 1 of doing things right. After your new card is open, make sure you do the following:
- Always pay on time. Aim for a perfect payment history moving forward.
- Keep your credit utilization low. Utilizing too much of your credit limit can actually harm your score. It’s ideal to never use more than 20-30% of your limit at any given time. For example if you have a $1,000 credit line, then never have more than a $300 balance on your card at any given time.
Step Three: Try applying for an entry-level unsecured card
After you’ve had your secured card open for 4-6 months, I would recommend applying for a basic no-frills unsecured card. Go here to see my recommendations.
If approved, you will now have at least two active accounts on your file; the secured card and now the unsecured one.
Step Four: Apply for the right AmEx (if you have okay credit)
After a 9-12 months of having 2+ cards on file, try applying for an entry level American Express card. That does not mean the Platinum charge card, but rather something like the Delta SkyMiles Gold (which is surprisingly rumored to be the easiest to qualify for, based on all the feedback I have received).
Step Five: Move up the ladder
After you’ve had your AmEx open for 6-12 months, you can try applying for a higher level card, such as the Gold or Blue Cash. If they don’t approve you, call and ask for a reconsideration. Some on the forum have reported a favorable outcome when they do that.
Another strategy to consider…
Even though you can’t get an AmEx secured credit card, you can get a prepaid debit card from them! It doesn’t build credit, so why would you want one? Because of their “Make Your Move” program:
There’s no guarantee it will help you (they only say it “may” lead to you being invited). For that reason I wouldn’t count on it as being your only strategy, but considering the fact that the prepaid card is free, it’s worth getting.
November 8, 2013 update: The “Make Your Move” benefit has been discontinued. For that reason, the only thing I’d recommend right now for those with bad credit is a secured card so they can use it to build/rebuild credit.