Disappointed with my broker, I’ve been shopping around for a new one lately. While researching Morgan Stanley, I noticed they have a couple new credit card offers out which were launched in 2012.

There is no application online and the website only provides very basic details about the two cards. For example on the first card, all they say is “Get Membership Rewards points on all eligible purchases” in regards to the rewards program… not very informative, right?

So I called up cardholder customer service to find out the nitty-gritty on both of the offers.

Morgan Stanley Credit Card from American Express

• Annual Fee: $95 but the first year is free.
• Rewards: 1 MR point per dollar spent. There are no bonus categories.
• Anniversary Bonus: For each year $25,000+ is charged to the card, an anniversary bonus of $100 is given. The year starts/stops on the date of which the account is opened.

In a nutshell this is the same as the Green Card from American Express. However it does come with one extra benefit, which is the anniversary bonus for spending $25k or more. Other than that, you’re essentially applying for a Green Card.

Morgan Stanley American Express Platinum Card

• Annual Fee: $450, this is NOT waived for the first year.
• Rewards: Same as the non co-branded Platinum Card, which gives 1x points on regular purchases, 2x thru American Express Travel Services website, and additional points through the Bonus Points Mall/Partners.
• Anniversary Bonus: For each membership year $100,000+ is spent,  a $500 bonus from Morgan Stanley is given.

In a nutshell this card is the same as the traditional Platinum, with the exception of two key differences – the anniversary bonus and an additional Platinum Card (under the same account) can be ordered for no additional charges. For everything else, you can read about the Platinum Card benefits on the traditional version for comparison.

Who should (and shouldn’t) get them?

If your brokerage account is with Morgan Stanley, then a strong case can be made for getting one of these cards if you spend enough to earn the anniversary bonus each year. It’s a pretty compelling reason when you consider that it basically will offset the cost of the annual fee on both cards. To apply for these cards, you will have to call Morgan Stanley’s customer service because there are no online versions of the application. Either of these offers beat the ol’ Morgan Stanley MasterCard, which was 1 point per dollar and flimsy when it came to benefits.

However the regular Morgan Stanley credit card (Green equivalent) I don’t think is worthwhile, even when you take into account the $100 bonus for spending $25k/year. Why? Because the AmEx Premier Rewards Gold is $80 more per year and it gives you double and triple points on categories, plus the ability to earn 15k bonus points each calendar year you spend $30k.

In short, compare spending $30k on the PR Gold Card vs. the $30k on the basic Morgan Stanley AmEx. Factor in the bonus point categories and the annual spend bonus (15k MR points is worth a lot more than $100). Despite the higher fee, you’re going to come out ahead substantially with the PR Gold.

Meanwhile going back to the co-branded Platinum, it seems to be a new tread. There is a Mercedes Benz American Express Platinum which was launched back in 2011 (though its annual fee is slightly higher). Whether you get that or the Morgan Stanley Platinum AmEx, just make sure you’re comfortable being married to the co-brand (i.e. If your next car is a BMW or you switch brokers next year, suddenly you may no longer like that aspect of the card).

Written or last updated April 2012

Q: I’m an adult but have never had a need to use credit. I paid for my car in full and use cash, checks and debit to pay for everything. Someday I would like to buy a place and know I need to build up my credit score to do that. What are the best unsecured credit cards for people with no credit history such as myself?

A: There are many Americans out there in the exact same situation as you. I would first like to say that you’re actually not in a bad position – having no credit history is like having a blank slate. That is far better than having a blemished record! Because you have an untarnished credit history, it usually is much faster to build up than someone that is trying to repair their credit.

So that brings us to the question, what is the best credit card for people with no credit history? Well, unfortunately your choices will be limited starting out. Here’s what you should expect:

Low starting credit limit: Since you are just starting out, naturally it shouldn’t be surprising that your credit limit will be on the low side – perhaps something around $500 to $700 to start out with if you’re approved for an unsecured card. However if you go with a secured card (that means putting up a security deposit) you can likely get a limit that’s higher – usually a credit line that matches the amount of your security deposit.

Possible annual fee: If you’re getting a secured credit card, some financial institutions may charge you an annual fee. However after you’ve had the card for 9 to 12 months and used it responsibly, then you will have a little bit of a history established and you can try to apply for an unsecured card with no annual fee from a different issuer. So although you might be paying an annual fee, you don’t have to stick with that card forever.

Here’s a couple different ways you can get started:

Getting a card through your bank or credit union
Do you have a longstanding relationship with a bank or credit union? For example, is there a bank that you’ve had a checking and/or savings account with for a while now? If so, this can be a great place to get your first credit card. It’s best to do this in person – walk in and meet with a banker there. Explain your situation and that you have no credit history and want your first credit card.

When going this route, many times your chances for approval of a card (albeit a basic one) will be better, because you have a relationship with that bank. Another benefit is that local banks are likely to charge an exorbitant fee on their secured cards.

Getting a card online geared towards those with no credit history
There are a number of financial institutions that specialize in credit cards for people with no credit history and those that need to repair their credit history. The best companies charge reasonable fees for these types of cards.

However be warned… there are many companies out there that will charge you way too much. One such example is First Premier Bank, who is famous for charging a laundry list of fees (application fees, processing fees, monthly fees, etc). When combined, those might equal up to $100 or higher just during your first year. To add insult to injury, the credit limits they give can be as low as $300.

Which banks are trustworthy for a good deal?
My current favorite is definitely Capital One® which I proudly advertise:

Q: I was using my Discover card at the grocery store and after swiping, it asked if I wanted cash back. I selected “no” because I don’t know how this works. Will I get ripped off paying cash advance interest rates for using this?

A: The feature you are referring to is Discover Cash Over. Not all stores offer it. Here is a list of Cash Over merchants as of 2012. As you see most of the retailers are strictly supermarkets, but there are others which are not, most notably Walmart and Dollar General.

At these stores, you can get cash back at the register during checkout. The amount you can get depends on the store. But whatever the case may be, Discover has a limit for Cash Over transactions of no more than $120/day per account.

Okay so what’s the catch?

Would you believe me if I told you there wasn’t one?

When you use this feature, it works in a somewhat similar manner to getting cash back using an ATM/debit card.

The extra amount (above the purchase price) will show up on your credit card bill. For example, if you made a $17.24 purchase at Walmart and used the Cash Over benefit to get $40.00, then on your card statement it would show $57.24 ($17.24 + $40.00).

There are no fees for using this. With credit card cash advances, interest begins accruing immediately (no grace period). However the nice thing about the Cash Over feature is that it’s treated the same as a purchase – there’s no interest charged if you pay your credit card bill in full each month.

So should you use it?

Yes! If you need cash, using your Discover for cash back at the register will save you a trip to the ATM. However, my answer is geared towards people who always pay their bill in full. If you don’t, then the Cash Over will accrue interest (the same way any other purchase does) and paying interest on this money wouldn’t be logical.

If you don’t have a Discover or are interested in opening a second account, here are their most popular offers:

• More Card: No annual fee and 5% on rotating categories
• Open Road Card: No annual fee and 2% at gas stations and restaurants
• Escape Card: $60 annual fee and 2 miles per dollar spent.

Remember your very first credit card? Even with zero credit history, an individual can still get approved for a student or secured credit card.

But is there anything similar for new businesses? A basic no-frills card that will approve a company with limited to no credit history?

The answer is both yes and no, let me explain…

Retailer cards?

When I opened my LLC, I figured the easiest business credit card to get would be one from a retailer, such as Staples or Office Depot. Wow… was I in for a big surprise!

You would think that these types of cards would have very loose credit requirements. After all, it’s not like some office supply store is anything special, right? Well apparently they feel otherwise. Upon reviewing the application, here’s what I discovered…

That’s right, just to get approved for a measly office supplies store card, your corporation/LLC needs to be raking in $5 million in annual revenue AND have been around for 3 years. Obviously, this is not a business credit card for a new business to get!

Of course you can still apply for a retailer card like that if you’re willing to co-sign with personal liability (so it’s not just under your business credit). But the question is… if you’re going to do that, why would you apply for such a low-level card? Wouldn’t it make more sense to apply for the Chase Ink or other major business credit card with rewards, benefits, and universal acceptance?

Conclusion? If you think store cards will be a good credit card for your new business, think again.

Major business cards?

As you know most of the big banks offer credit cards for businesses: Chase, American Express, Citi, Capital One, Discover, Bank of America, and others. So how many of those offer cards without a personal guarantee requirement? The answer is zero.

Whether it’s a major bank (such as the above examples) or a small regional bank, they all have one thing in common – in order for you to apply and get approved using only your company’s credit, you can’t be a new business. The qualifications are comparable (and sometimes even stricter) then the aforementioned Staples card.

Out of the major issuers, American Express seems to have the lowest bar to jump over. Back during the Great Recession they imposed a minimum of $5 million in annual sales to be approved (which is comparable to other banks). However after the economy improved, in 2012 they significantly lowered the requirements:

AmEx Green Corporate ($55 annual fee)

Have $10,000 per month in revenue and 6 months operating history.

AmEx Gold Corporate ($100 annual fee)

Have $2 million in annual revenue and 6 months history history

AmEx Platinum Corporate ($395 annual fee)

Have $2 million in annual revenue and 6 months history

Note: By definition, corporate cards are the only ones which do not require a personal guarantee. Regardless of the bank, anything called a “business credit card” or “small business credit card” will require you to co-sign using your Social Security number. If you don’t want personal liability, then what you want is a corporate card.

With all of the above (and any corporate card out there) you will have to prove your qualifications. When I called AmEx’s customer support and asked, they said that during the application you will have to provide your company’s bank account info – they will then call and verify deposit amounts and other information.

As you can see, the Green Corporate is one of the best business credit cards for new business, but not a brand spanking new one. Your LLC/corporation needs to have been around for at least 6 months and pulling in a minimum of $10k per month in sales.

On the other hand, the requirements for the Gold and Platinum Corporate are the same… $2 million in annual sales. If you’re just starting a new business, these probably won’t be options for you until down the road. All the other banks have similar minimums ($2-5 million annually) which makes the Green’s qualifications substantially below average.

Brand new businesses?

Obviously the American Express Corporate Cards are the best to aspire to… but none of them are for new businesses. So what should you do meanwhile?

If you’re comfortable doing so, your best bet will be to get a jumpstart on the credit building process by signing up for a biz card using a personal guarantee. Why? Because that way you can get one, even if your company is only a day old and has zero revenue.

Then once your company has an established operating and revenue history, you can apply for a corporate card (and cancel your business card if you want). The nice thing about doing it this way is that you will have already started to build a credit history for your corporation or LLC, even before you get the corporate card.

So which is best to start with? My vote is for the Ink by Chase and it’s what I use myself. I also have AmEx business cards but the caveat with those is that they don’t report to Dunn and Bradstreet or Equifax Business credit bureau (so while AmEx small biz cards are great for benefits, they’re not useful for credit building).

Compare my favorite business credit cards here

The Express clothing store card recently re-vamped its rewards. Is it worth a look?

Getting a clothing/retailer’s credit card rarely makes sense. There are really just three circumstances when you should apply for one:

1. You can’t get anything better, because you need to get a starter card to establish credit history.
2. The store card operates on a major payment network (like the Sams Club Discover card). That way you will be able to use the card at more than just the affiliated store.
3. The retailer’s rewards program is insanely generous and you spend enough with them to justify the hassle of getting their store-only card.

So unless you meet one or more of those qualifications, a retailer’s card just doesn’t make sense. So that brings us to the question… does the new Express Fashion credit card make the cut? Well here’s the lowdown on the new “Next” rewards program.

Express Next credit card

This is the card everyone starts out with. There’s no annual fee.

Rewards: It pays 15 points per dollar spent. That may sound like a boatload, but every 2,500 points = $10 reward. So that means each point is only worth $0.004 (less than half a penny). However that’s still a good rewards value, because it means the rebate is 6%. Also there are days each month where additional points can be earned.

Birthday: There is also a “birthday gift” but the Express store card application doesn’t tell us what that is. But I did some digging around and according to an FAQ on Quora, it’s reportedly a $10 coupon.

Coupons: Like most store cards, expect to get coupons/promotions in the mail on occasion.

Express A-List credit card

This is also called “Next” but they add “A-List” onto the name to jazz it up. If you earn 7,500+ points in a given year, then the Express A-List upgrade will happen. Since there’s 15 pts/dollar that means this happens after you spend $500. Keep in mind the year resets on the anniversary date of when you opened the account and to maintain the A-List level, you have to continue to spend that much to keep it.

Rewards: Like the other card, this one also earns 15 points per dollar. However unlike the other one, with the Express Next A-List program the points are worth more – every 2,500 points = $15 rewards (versus $10 on the regular card). So each point is worth $0.006 (50% more) and that brings the total rewards to the equivalent of 9%.

Birthday: This version also gives a birthday gift but the application says it’s a “premium” gift. What does that mean? That I couldn’t find the answer to (but if you know, feel free to chime in on the comments). My guess, based on similar store credit cards, is that the coupon is probably around 2x the base level, which would be $20 for this card. But again that’s just my best guess.

Coupons: Ditto as above.

Shipping: Orders on Express.com get free shipping with the A-List card. However keep in mind that you can often find promo codes (w/o the Express credit card) for free shipping, too.

Now for the bad things

Interest Rates: Both of the Express Fashion credit cards are issued by World Financial Network Bank (WFNNB) who are notorious for dishing out ridiculous APRs. With these cards you’re going to pay a steep 24.99% APR. But remember if you pay your bill in full and on-time every month, interest charges can be avoided.

Store-Use Only: It’s not branded with any major payment network, so the only thing this is good for is shopping at Express stores.

Credit Limit: Some reviews I’ve heard say the Express store card’s credit limit can be quite low. One guy said $200. Obviously better credit scores/history will get better limits. But if you get stuck with a low limit keep in mind how that may affect your credit to debt ratio if you don’t manage it properly.

Verdict?

Would I fill out an Express store card application just to get 15% off the first purchase? Definitely not! Using that as a reason to get a retailer’s card is a bad idea, unless maybe you’re shopping at Lowes or Home Depot where your first purchase could be thousands of dollars. Then the one-time 10-15% discount can be worth it.

However if you frequently shop at their stores, then the Express clothing credit card has one of the best programs on the market, in terms of the percentage rebate it gives. That especially holds true if the account is upgraded to the A-List level. But if you only spend a low amount there, say $500/year, it might not be worth that hassle because that would only net you $30 in rewards.

Other good options?

If you don’t spend enough at Express to warrant getting their credit card, then check out these:

• Chase Freedom – 5% on rotating categories + big signup bonus
• Citi Forward – 5x points on multiple categories
• Citi ThankYou Preferred – comes with great signup promotion