In June 2011 American Express launched a prepaid card. I’ve noticed many hailing it as their first prepaid card, but actually there’s the AmEx Pass that’s been out for a while now, although that is mainly geared towards teens.

Is it a debit or credit card?

American Express prepaid credit cards? Or debit cards? Actually… neither!

Since this new card doesn’t allow you to buy anything on credit, it’s definitely not a credit card. Most stories I’ve seen so far has referred to them as being prepaid AmEx debit cards. That’s a closer description but if you want to be nit-picky about it, these aren’t exactly debit cards either by definition.

But that’s all semantics, let’s get into the good, bad, and ugly aspects of this new card.

The Good

Almost no fees
Let’s be honest here… most of the prepaid card issuers are famous for nickel and diming customers with fees, fees, and more fees. I’m not claiming all are rotten but a lot of them definitely are.

With AmEx’s new prepaid reloadable card you won’t be shook down with a million different fees. In fact, getting the card itself is completely free and you can order it online. There are no activation fees, no fees for calling customer service, no monthly or yearly fees, no purchase fees, and no overdraft fees.

So how is American Express making money you ask? Well, since your purchases are processed the same as a credit card, the merchant has to pay those credit card processing fees. AmEx is hoping your purchase volume brings in enough processing fees to offset the costs they have to pay to advertise, issue, and manage these prepaid accounts.

Better customer service (probably)
I haven’t gotten any feedback or reviews from customers since the card just came out, so I can’t conclusively judge the card’s customer service yet. But given that it’s American Express, I expect it will be a heck of a lot better than the service you get with most other prepaid debit cards. According to the AmEx website, service is available 24 hours a day via 1-866-207-7970.

Several good benefits for free
If you have an AmEx charge or credit card, chances are you already know about these great benefits:

• Purchase Protection: Covered items which are lost or stolen during the first 90 days will be reimbursed.
• Fraud Protection: The AmEx website says they will refund charges if your card is lost or stolen.
• Global Assist: In a nutshell this is a help line you can call when you are traveling more than 100 miles from home. They won’t actually pay for the help you need, but they will provide free guidance/advice in how to get that help. For example, if you need help finding an emergency dentist overseas or you lost your passport, they should be able to direct you to the right people.
• Arranging Roadside Assistance: This benefit isn’t that exciting since AmEx is not actually paying for the roadside assistance, but they will arrange the service for you without charge. You can use this up to 5x per year.

The Bad

ATM fees
You do get one free withdrawal per month with an AmEx Prepaid Card but anything beyond that and you will be charged $2.00 per withdrawal. Then you also need to take into account the additional fees the ATM may charge you on top of that, because the two bucks just goes to American Express.

Free reloads may be tricky
If you don’t want to pay any fees to reload, then you have to transfer funds either from a bank account or another American Express card.

The problem with this is that many people who use reloadable prepaid cards don’t have a checking account nor a credit card, let alone an American Express. I’m not claiming that’s the case with everyone who this card would appeal to but certainly a good chunk of people fall under this umbrella.

The Ugly

Reloading with cash
If you don’t have a bank account or an AmEx card, you will need to reload with cash using a GreenDot MoneyPak (which is used for many other prepaid cards, too). You can pick up a GreenDot MoneyPak at drugstores, convenience stores and load money onto it for a fee, which is often $4.95.

Typically the most you can load onto it is $500 so that means right off the bat, that $4.95 equals almost 1% of your money. If you load $250 on it, the $4.95 equals almost 2%. As you see the less you load, the more your fee is percentagewise.

Verdict?

If you can reload your American Express Prepaid Card using a bank account or other AmEx card, then this is definitely a good deal compared to most of the other prepaid cards on the market. However if you need to use the GreenDot MoneyPak the fees definitely suck, but at the same time, they are comparable to what you would be paying on other cards. So overall, this prepaid card from AmEx isn’t perfect but it’s a lot better than most of your other options in the prepaid category.

If the reason you are interested in a prepaid card is because you have bad credit and can’t get approved for a regular credit card, then you might want to consider applying for a secured credit card. Approval is almost guaranteed and yes, the fees are high with them, but at least the account will help your credit if used responsibly.

Q: Which American Express cards come with trip cancellation insurance? Does it mean I can cancel for any reason and get my money refunded?

A: There are a few credit cards on the market that come with trip cancellation and interruption coverage but surprisingly, none of the AmEx cards offer it. You won’t even find it on their high-end Platinum and Centurion cards.

That being said, you can buy American Express trip cancellation coverage from them for a fee, regardless of whether or not you are an AmEx cardmember. The fees and exact level of coverage vary by state. You can’t get refunded “for any reason” but there are quite a few things covered. Here’s a review of the coverage and exclusions with their Global Travel Shield insurance.

You or a Family Member are unexpectedly and seriously sick or injured

What constitutes “seriously” sick or injured? Well the phone rep I spoke to said a doctor usually has to document that you are not well enough to travel. This also echoes the feedback I have heard from forum posters regarding this type of claim.

On the other hand, if you are fine but are making the claim due to a family member’s health, the rep said “they will have to be critically ill or require you to care for them.”

Adverse weather conditions or natural disasters

I told the phone rep that the definition of “adverse weather” is definitely in the eye of the beholder, so she should explain to me what qualifies and what doesn’t.

Her response was that “adverse weather” means that your common carrier travel (plane, train, ship, etc) has to be cancelled for 24 hours or longer due to weather conditions. Coverage doesn’t apply to driving, so if you booked a hotel 500 miles away and a snow storm is preventing you from driving there, you will not be able to make a claim.

A labor dispute affecting travel services

I haven’t heard from any members who have had to make a claim under this one. As to what situations would be “labor disputes” one example would be if your airline went on strike and grounded their flights, and hence, you weren’t able to take your trip. The rep also mentioned that a bankruptcy would also fall under this category.

Your job is unexpectedly terminated

The website for AmEx trip cancellation insurance says “Please see your plan documents for a complete list of covered reasons.” Well, that’s not too helpful in my opinion, because wouldn’t people want to know the details before they buy?!

I had the rep email me the details and as expected, there is quite a bit of fine print with this one. The exclusion I was most surprised by was length of time at job. You must have been at the same job for 2 years. I specifically asked if working consecutively for 2 years at different jobs would count and she said no.

In summary, this benefit may be applicable if you are fired or laid off. But all the rules and fine print vary by state so you should call them directly to find out which circumstances would be applicable in your situation: 1-800-332-4899

Important things to remember

• You will only be reimbursed for the non-refundable portions of your trip. So if your airline ticket is non-refundable, AmEx will cover it. But if your hotel stay is refundable, then you should cancel and get the refund yourself.
• The costs vary based on the state you life, price of travel, and where you are traveling to.
• There are alternatives to paying for this American Express trip cancellation insurance. For example, after the 2% rewards, the Discover Escape card is probably best known for offering a wide array of insurance benefits, including trip cancellation/delay coverage.

This program is very popular overseas, yet I am always surprised to discover how few U.S. cardmembers even know about. In a nutshell, the American Express Selects offers a variety of exclusive opportunities for cardmembers to save money.  I will review with you what I like and dislike about the program.

Dining

As I write this review, nationwide there are 47 different restaurants in the United States with active offers available. If you live in major cities like Chicago, New York, Los Angeles and San Francisco, you will probably find some deals in your area. Speaking of Chicago, strangely enough that’s where 24 out of the 47 are located!

Here are some examples…

• For Chicagoans that just want some pizza, I actually see several deals available. One of which is at Connies Pizza. Through all of 2011 you can get 20% off any dine-in, pickup, or delivery order by using your American Express card. A pretty good deal but if you have a pizza addiction like me, I suppose that might be a drawback.
• For New York City, I see Grace’s Trattoria listed and the offer is for a $10 savings if there are 2+ people eating an entrée for lunch or dinner. That deal ran for 6 months from 12/1/10 thru 6/1/11.

What I don’t like about AmEx Selects is that it basically discriminates against everyone living outside the major cities when it comes to restaurant offers. However I did see one “normal” restaurant that is pretty big in the Midwest and that is Ruby Tuesdays…

Unfortunately American Express makes it very confusing as to which locations this particular coupon can be used at – they don’t list it under any of the cities. Under the “Locations” tab on the deal’s page, it directs you to the locator on Ruby Tuesdays’ website. I assume that means it likely could be used at all locations but don’t quote me on that.

Verdict? Great for Chicagoans and not-so-much for everyone else.

Shopping

The shopping selection is much better than the restaurant options. As I write this there are 228 American Express Selects shopping partners.

Almost every offer is for online shopping and I would consider the deals comparable to what you would find on your run-of-the-mill coupon sites. That being said, there were several that I have not seen elsewhere like…

• $5 off $50+ at Target.com
• $5 off $50+ at Kmart.com

If you used those on orders that were exactly $50, that’s a 10% savings. Then if you stacked them with what you could earn through the AmEx Bonus Points Mall, you could save even more.

Verdict: American Express Selects has a few one-of-kind offers. The rest is similar to what can be found elsewhere.

Entertainment

There were 59 current offers available. Some were very lackluster, like online discounts for booking a “Body Glove Cruise” (why a clothing company is having cruises, I have no idea). However if you are in the right location, there are some nice deals to be had. Here are a few…

As you see, there’s a lot of 2 for 1 deals and ticket discounts.

Verdict: If you happen to live or be on vacation in places the participate, these are some nice offers for sure.

Travel

We all know travel is a strong point when it comes to AmEx credit cards, so it comes as no surprise that they have a nice selection of deals for this category. And unlike the shopping deals which were mostly identical to coupon codes you will find elsewhere, the AmEx Selects US program has savings opportunities that you won’t find anywhere else.

There were 140 when I looked at here are a few random ones to give you an idea of what’s available…

Verdict: This is probably the most useful category out of all the American Express Selects offers because you get some real savings, plus many of these savings can be used by people no matter where they live in the US.

Don’t have a card or itching to get a new one? Find out how to get a whopping 6% cash back with the new Blue Cash Preferred & Everday cards

Written May 2011

The Clear from American Express was first launched back in 2005, hailing itself as the “first credit card with no fees.” At the time, that was a revolutionary concept – consumers were used to being nickel-and-dimed by credit card companies with fees under dubious circumstances (remember folks, we’re talking about the days before credit card reform).

Today in 2011, the American Express Clear card is still available but it is actually one of their least popular cards. It’s not that the customer reviews are bad for it… it’s just that the rewards on the card are nothing exciting and with no money rolling in from late fees, balance transfer fees, etc. is it any surprise that the rewards suck?

But in all fairness, it’s still a good card. After all, you can’t have your cake and eat it too! Here’s a review of the pros and cons so you can decide if it makes sense for your lifestyle:

Pros

• Obviously the biggest benefit is that you have no fees of any sort. That means no annual fee, late fee, no over-limit fees, no cash advance fees, and no balance transfer fee. The latter of which does make it useful for balance transfers but not surprisingly, American Express rarely offers 0% BT for this card since there is no BT fee.
• The Clear credit card does come with the standard benefits you get on other American Express cards such as extended warranty, return and purchase protections, car rental loss and damage insurance, and few others.

Cons

• Because there’s no money being made off fees, the interest rates tend to be a bit steep compared to other guys. As of May 2011, the rates listed on the Clear card’s application were 17.24%, 19.24% or 21.24% depending on the accountholders credit.
• I am actually deliberating whether I should list the rewards under the pros or the cons. The card does give 1% on all spending without any limits (every 2,500 points = $25 AmEx gift card automatically mailed to the account holder). But the drawback or “con” is that 1% is pretty lackluster these days, ESPECIALLY compared to AmEx’s other cards on the market.

Verdict

Ultimately I think it all depends on your lifestyle. For someone that makes late payments, uses cash advances, etc. then I could definitely see the Clear card making sense. Because if that’s you, the amount of money you pay on fees probably exceeds what even the best cash back credit cards would be giving you.

However if you are someone that consistently has good credit management habits and doesn’t encounter late fees, then what’s the point of applying for the AmEx Clear and its 1% rewards? I can’t think of any. You would be much better off with one of their others like the Blue Cash card which gives excellent rewards and has no annual fee.

With an American Express business card you can score some serious savings on AirTran flights…

As a holder of the AmEx Simply Cash card, I received a brochure mailed to me a few days ago promoting two different ways you can get a discount on AirTran flights. Here they are…

• OPEN Savings – automatic 5% discount
  All of the AmEx Business cards are included in the OPEN Savings network, where you get automatic statement credits from participating merchants. Back in 2010, AirTran Airways joined the program and business cardmembers get an automatic 5% discount from them. What’s so great about this offer (as well as all OPEN Savings merchants) is that the discount you get is on top of any other coupons or promotional codes you may be using.

• $100 statement credit for AirTran purchase of $500+
  Through July 31st, 2011 American Express is offering a great opportunity to their business cardmembers: spend $500 or more on purchases directly from AirTran airlines (either through their website, 1-800-AIR-TRAN, or at the airport) and you will receive a $100 credit on your statement.

When you combine both of these discounts together, in theory you could be saving up to 25% off your flight. Let’s say your roundtrip ticket cost you $500. After you deduct the 5% discount ($25) and the statement credit ($100) the net amount you would end up paying is $375… that’s a savings of 25 percent!

What’s in the fine print?
This $100 offer appears to be pretty straightforward without any surprises in the fine print. Each charge or credit card account can get the $100 rebate one time during the promotional period. Of course, the 5% savings through OPEN is unlimited and you can get that all year long, all the time. I have flown AirTran Airways a few times in the past and liked them (good prices and service). I was surprised to see a more recent map of their routes: 62 destinations covering the continental United States plus Cancun and a few Caribbean islands. So there’s a good chance you could use them.

Which AmEx cards can participate?
As mentioned, I received this offer for my no annual fee Simply Cash card but other American Express business cards are eligible, too. If you would like to compare their cards side-by-side, check out my business credit card reviews. Even if you don’t have a LLC or corporation you can still apply for their cards as a sole proprietor using your Social!