How can I spend wisely with airfare purchase using AMEX/Discover card?

Question

I've recently applied for and was offered two AMEX cards: One (charge card with 14.24 APR option, 1% cashback directly deposited into a savings account) and Blue ($2,00 credit limit, at 0% promotional APR, 1 percent cashback I think). I was also approved for a Discover Platinum ($4,000 limit, at 0% promotional APR, 5% cashback).

I'm about to make a big airfare purchase for about $2,000 and want to make monthly payments and pay it off before interest charges accrued. My goal is to establish credit with these new prime creditors. What is the best plan for making this purchase using one of the cards (or multiple cards)? Pros and cons? Should I call to convert Blue into Blue Cash for their 5% cashback offer? Should I request credit limit increases for Blue and/or Discover just in case I use one of these cards and my credit utilization won't look "maxxed out" from the onset?

Answer 1

Well, if your airfare purchase is $2k and your AMEX Blue only has a $2k limit, you shouldn't put it on there. The AMEX charge card will start charging you interest right away if you don't pay it back within a month, so if you want to make monthly payments on the airfare, you should put it on the Discover card.

If you are using these cards for very little else, then you probably don't need a credit line increase at the moment, since you would only have $2k used out of $6k total available.

Answer 2

First...credit cards are never a good way to finance a trip :-) If you can't pay cash for it, postpone your trip until you have the money for it. Then it doesn;t matter which card you have since you'll be paying it off at the end of the month.

Second...I am not a "don't have credit cards" person. I always purchase airline tickets, car rentals, big ticket items, etc with a credit card since it has protection (i.e. travel insurance, car rental collision insurance). Personally I have the CitiBank AAdvantage (American Airlines) card. It ha sa yearly fee (waived for first year) plus 20,000 bonus miles after your first major purchase and 10,000 bonus miles for the first two years each.

Finally, the AmEx cards are not a good choice. The 5% cash back is only on supermarket/drugstore/gas station purchases that EXCEED $6,500 dollars per year. So if you spend less than $600/month on gas and groceries, you will never see the 5% cash back.

Discover is not accepted as widely as an AmEx, Visa, or MasterCard so avoid them

Answer 3

I agree with aj485

Just an FYI --

I wanted to add that AMEX is, and has been for the last couple of years, creating a habit of locking account(s) without notice and requesting financial reviews. They will not unlock the account(s) until the person complies and sends the info.

There seems to be no rhyme or reason what triggers the FR's, but they are happening. It looks like it's not a matter of IF a person will be FR'd, it's a matter of when.
(lately it looks like they have beefed up their FR dept. and are running it 24/7)

It hits people who are on the low end up to people who are on the extreme high end.

People have been known to be on trips, in restaurants, etc., etc., etc., and when trying to pay finding that AMEX has the account locked.
So if you are planning on using AMEX, especially on a trip, be sure to have a back up non AMEX card just in case.