American Express Cure For Credit Card Hangover
American Express Cure For Credit Card Spending Hangover
AUCKLAND ( January 9, 2001) – It is easy to overindulge on spending during the Christmas and New Year holiday periods, so American Express has come up with a cure for the traditional New Year’s Credit-Card-bill hangover.
To combat the weighty seasonal flow of credit card statements, American Express is suggesting people take advantage of its Balance Transfer option for Cardmembers.
Balance Transfer allows credit card holders to transfer the outstanding balance from other major credit card accounts to an American Express Credit Card at an interest rate of just 9.99% for the first six months. This low Balance Transfer interest rate is nearly half the average standard Credit Card interest rate of 19.2 % currently charged by major credit card lenders in New Zealand.
Anna Hynes, country manager for American Express, said it made perfect sense to transfer balances from higher-rate credit cards.
“People can halve their cost of credit for six months with a balance transfer, so it is well worth doing so after a period of heavy spending,” Ms Hynes said. “There’s really no need to keep a balance on any other card where on average the interest rate is going to be much higher,” she said.
American Express launched a Credit Card in New Zealand in January 2000, and its business has grown significantly over the past year.
“At the time we launched our credit card we suggested our competitors would sit up and take notice. That has happened, and as a result New Zealanders are getting a better credit deal. Our balance transfer offer is an example of the sort of advantages credit card users now receive result of greater competition,” Ms Hynes said.
The standard interest rate on the American Express Credit Card is 16.99%, which continues to be more than 2 percentage points below the average rate as measured by the Reserve Bank of New Zealand.
American Express also continues to operate a significant Charge Card business in New Zealand. Charge Card’s require the repayment of outstanding balances in full each month, unlike a credit card where only the minimum amount is payable with interest charged on the remainder.
Ms Hynes said American Express Charge Card members could also seek relief from the holiday spending blues. Charge Card members can utilise a Line of Credit account to repay their monthly Card bill, with the account then payable in minimum monthly payments of 5% of the outstanding balance or $50, whichever is greater.
Unlike other overdraft accounts, there are no account fees and no transaction fees (except for ATM withdrawals) payable on American Express Line of Credit Accounts.
Ms Hynes said the Balance Transfer and Line of Credit options were just two of the services available to Cardmembers who needed to manage their holiday-period spending.
“It is very easy to get caught up in the hype of Christmas and New Year spending, and it is easy to overestimate the ability to pay all bills,” she said.
“We always encourage our American Express Cardmembers to talk to us if they are in financial trouble and can’t make their payments. The worst thing they can possibly do is to ignore requests for payment,” Ms Hynes said.
American Express also suggests the following three steps to avoid serious card debt problems.
1. Always pay at least the minimum amount due if you have a credit card.
2. Contact credit providers as soon as it appears you have difficulty in meeting your credit card bills. They will work with you to ensure your credit history remains good.
3. If you have unpaid balances which will take some time to pay off, consider moving them across to a less costly card.
The American Express Company, which is celebrating it 150th anniversary this year, is a diversified worldwide travel, financial and network services company. Founded in 1850, it is a leader in charge and credit cards, Travelers Cheques, travel, financial planning, investment products, insurance and international banking. For more information about American Express, visit the worldwide web site at http://www.americanexpress.co.nz.