Pros: Great long term balance transfer rate
Cons: Mix up purchases and transfers and you will pay through the nose

Recommend to potential buyers: yes

Full review
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American Express Blue Card.

First of all, this is a credit card. Nothing more nothing less. The same concept as Visa or Mastercard under a different name.

So, what does it do?

Well, firstly, it has a snob value! The AMEX name is possibly up there with Harrods and Coutts & Co, but this is definitely a card for Mr Average to play with.

There are in the region of 30 credit card providers in the UK offering somewhere in the region of 500 different cards! So, what makes AMEX Blue special?

Well, here are the features:

Cashback! I like cashback. Every time I spend money, they give me money. 2% of the transaction value in the first two months and 1% after that! In other words, if you have a big purchase coming up, apply for this card now and you effectively get a 2% discount! A word of caution, the cashback is paid 12 months after opening so keep the account running for at least a year! This is just about the best deal on the market from a cashback perspective. The GM Card pays 3%, but you a restricted to buying a new Vauxhall car with that money. AMEX Blue money can be spent anywhere you can use your AMEX card! If you pay your credit card bill in full every month, AMEX Blue could be for you! Miss two payments in a year and you forfeit your cashback.

4.9% balance transfer rate for life! This is actually an excellent offer on the surface. Transfer your existing plastic debts (perhaps you are paying 18.9%!) to AMEX and you pay a fixed low rate until the debt has gone. Brilliant! To benefit from this you do have to arrange the transfer within 6 months of opening an account, otherwise the rate for life of transfer jumps to a still not bad 9.9%. There is a catch with this, as is typical of most credit cards. If you transfer a balance and spend at the same time, then make a modest payment to your account, the modest payment is made against the part of the balance that is charging the lowest rate! In time, you will be paying the AMEX Blue standard rate of 18.9% on all your balance, as the bit you transferred is paid off first! In other words, DO NOT MIX BALANCE TRANSFERS AND SPENDING! By all means transfer a balance at 4.9%, but do not then spend on this account, use an alternative credit card! You should also note that you do not earn cashback on balances transferred, interest charged or cash advanced.

The minimum repayment is 3% of the total balance outstanding each month. This is higher than alternative cards (market leaders Halifax, Bank Of Scotland and MBNA typically ask for 2%) but does mean your debt will take less than 6 years to repay if you do not carry on adding to it! You must also make your monthly payment within 25 days of the date on the statement, so while they can claim you have up to 56 days interest free credit, you need to allow time for postage / BACS transactions to reach the account to avoid nasty little charges. As with all credit cards, allow extra time for weekends and bank holidays!

The literature mailed to me states NO ANNUAL FEE. The small print says there is a SERVICING CHARGE OF £15 if I fail to spend £500 or more a year on the card. In plain English, there is an annual fee of £15 waived if you spend £500 or more with the card. There. I can say it. Could they?

There are other frilly niceties. Refund Protection Insurance refunds you the cost of any purchase (terms and conditions apply) over £25 where the retailer refuses to. In reality, I understand they lean heavily on the retailer to cough up before they have to! Nice, but not essential. Online Fraud Guarantee means if your card is used fraudulently on the net you get your money back. Again, this is the same with most card companies, and where it is not, your liability cannot exceed £50 anyway by law! You get offered lots of nice goodies (eg buy 12 bottles of wine at twice the normal price and get 12 free -sorry, cynical me) that you could get offered anywhere else, but the reality is they do not make it a deal worth buying on there own.

So, is it worth ringing 0800 700 787 to get one?

Well, if you want to transfer a sizeable balance from another card or two that you know will take you more than 9 months to repay, the answer is yes. But do not actually use the card. Simply make payments to clear your debt over time. (I recommend Morgan Stanley if you could clear the debt within 9 months as it is interest free!).

If you clear a balance in full every month and do not intend to buy a Vauxhall car, it is also an excellent deal. But carry a Visa or Mastercard too (Goldfish or Halifax Cashback leap to mind) as you will find an annoying habit for certain retailers of varying size not to accept AMEX cards! This is due to additional costs AMEX heap on retailers compared to Visa and Mastercard. This is the same in Europe, Asia and, surprisingly, USA. The Yanks are not as keen on AMEX as common myth would have us know. Oh, and make sure you spend at least £500 a year with it to avoid that naughty £15 fee.

As with just about every credit card, never mix balance transfers AND purchases. It is a recipe for profitable banks.

I cannot recommend using a credit card to draw cash, and AMEX, in line with the market, charge you for the privilege (the higher figure of £1.50 or 1.5%). They do have a sneaky little rule though that restricts you to only £200 every week. If you are caught short in the middle of Kabul high street, this is not what you need!

Late payment fees hover around the £15 mark, steep, but better than most of the competition. Credit protection insurance is 72p per £100 and covers against death, redundancy and illness. It will only pay 5% of your balance each month if you claim though. Some cards (Halifax for example) may charge a little more but pay off 10% of your balance each month when you claim.

I am now waffling, so I recommend you check out the small print on the AMEX website www.americanexpress.co.uk for details of refund scheme exclusions and any other points you want clarity on.

It has its uses ... but not for everyone.

This card has its place. But make sure it fits your needs properly before you apply!