What Credit Score is Needed for an American Express Credit Card?

Jun 16, 2017 | 1 Comments

American Express Personal credit cards

Of all the credit cards I’ve carried in my wallet over the years, my favorites are issued by American Express. I love the rewards I can earn, the offers Amex provides, and the access to great benefits and service.

In fact, I have two of them on me right now. I use an Amex cashback card for business, and an American Express travel rewards credit card for personal use.

Amex is well known for attractive, high-value credit cards. They’re also recognized for the excellent customer service they give to cardholders. I know I feel reassured when I use American Express credit cards because if anything happens, experience tells me that the company will be there to help me sort through the problem.

What You Should Know About American Express Cards

While carrying Amex credit cards comes with many perks and benefits, there are downsides. Many cards come with annual fees in exchange for those great services and rewards.

This isn’t necessarily a bad thing, but you need to use the card enough to justify those fees. If you don’t spend in a way that allows you to maximize what the account offers, an American Express credit card may not make the most sense for you.

Another issue is as well-known as the many positive aspects: not all merchants accept American Express. In addition to requiring customers to pay high fees, the merchant fees on Amex cards tend to run higher than with other issuers.

If you carry an Amex, it’s always smart to carry a backup credit card from another issuer just in case your American Express isn’t accepted.

That being said, the benefits outweigh the negatives for many folks -- myself included. If you count yourself in, too, then you need to know what’s required to get one of these cards in your wallet.

Specifically, you want to focus on what credit score is needed for an American Express card.

Your Credit Score and Why It Matters So Much

Your credit score is one of the biggest deciding factors in whether or not you can qualify for an AMEX card. This is particularly true if you’re looking at one of the higher-value cards, like an American Express travel card or another kind of rewards card.

When we talk about credit scores and what you need to qualify for any card, a line of credit, or loan, we need to look specifically at FICO scores. Your FICO credit score is the one used by 90% of lenders to determine what you can qualify for when you ask for credit (be it a card or money borrowed).

FICO doesn’t release the details on exactly how they arrive at that magical three-digit number. But they do explain the five areas of your financial life that they look at to calculate a score for you:

FICO Credit Score Factors and Their Percentages

FICO credit score factors Percentage weight on credit score: What it means:
Payment history 35% Your track record when it comes to making (at least) the minimum payment by the due date.
Amounts owed 30% How much of your borrowing potential is actually being used. Determined by dividing total debt by total credit limits.
Length of credit history 15% The average age of your active credit lines. Longer histories tend to show responsibility with credit.
Credit mix 10% The different types of active credit lines that you handle (e.g., mortgage, credit cards, students loans, etc.)
New credit 10% The new lines of credit that you've requested. New credit applications tend to hurt you score temporarily.

To understand this a little better, let’s take a step back and ask: what is a credit score? It’s a three-digit number that ranges from 300 to 850. The credit score range goes from flat-out bad (or subprime) to fair, average, good, and excellent, with “bad” being anything that falls below 560.

The average credit score falls in the, well, average credit score range. It’s 687, just a shade below a good score.

And what is a good credit score, exactly? Think anything at 700 or above. If your credit is good to excellent, you likely won’t have a difficult time qualifying for most credit cards, lines of credit, and loans that interest you.

Credit Score Ranges and Quality

Credit Score Ranges Credit Quality Effect on Ability to Obtain Loans
300-559 Very Bad Extremely difficult to obtain traditional loans and line of credit. Advised to use secured credit cards and loans to help rebuild credit.
560-649 Bad May be able to qualify for some loans and lines of credit, but the interest rates are likely to be high.
650-699 Average/Fair Eligible for many traditional loans, but the interest rates and terms may not be the best.
700-749 Good Valuable benefits come in the form of loans and lines of credit with comprehensive perks and low interest rates.
750-850 Excellent Qualify easily for most loans and lines of credit with low interest rates and favorable terms.

If you’re not sure what your credit score is, check it before you apply for any cards. CreditKarma and Credit.com both offer access to free credit scores. These numbers aren’t your official FICO score, but they give you a good estimate of what your credit looks like by category (so you’ll know whether it’s bad, fair, good, or excellent).

Check out your other credit cards, too. Many issuers now provide your actual FICO score on each statement you receive. If this isn’t an option for you, contact the institution you bank with. They may be able to provide your free credit score for you as well.

The Credit Score You’ll Need for American Express Credit Cards

Again, AMEX is known for being on the exclusive side. They don’t release the exact credit score range required to qualify for any specific card.

But in most cases, you may need a higher credit score to qualify for their cards than you would if you sought a credit card for another company. Aim to get your credit score in the mid- to upper-600s if you want a basic, lower-end American Express credit card.

And if you’re interested in the higher-value cards that carry big fees (but also offer big rewards, perks, and benefits)? You need good credit or something that hits at least 700.

AMEX also offers premier cards aimed at a select market segment with big budgets and deep pockets. For these cards, most users bring excellent credit on the top end of the spectrum to the table.

Plan to reach good credit status before you pick up an American Express credit card application. You’ll increase your chances of approval for the card you want. And you’ll also be more likely to secure a lower APR on the card, too.

Going Beyond Credit Scores: What Else You Need to Qualify

As important as credit scores are, they’re not the end-all, be-all when it comes to getting the American Express card you want. AMEX will also look at your income, expenses, and existing debt.

This gives a more complete picture of your current financial situation and shows your reasonable ability to repay what you charge to an AMEX card. The company will also use this to help determine your credit limit if you are approved for the card.

Get Your Foot in the Door with the AMEX Charge Card

Credit score not quite where it needs to be in order to get an AMEX? Before you get too bummed out, check out a potential way to increase your likelihood of getting approved in the future.

American Express offers both credit cards and charge cards. These are two different products, and it’s a little easier to qualify for a charge card since your credit score doesn’t need to be as high.

Charge cards are unsecured lines of credit, just like credit cards. But the major difference is that charge cards don’t come with a credit limit. That sounds exciting at first, though it means you can get into serious trouble if you’re not careful with how much you purchase on the card.

Charge card statements are issued at the end of every month, and you owe the full balance when it hits. Fail to pay back what you charged, and AMEX will charge you about 3% of whatever you put on the card.

AMEX could also cancel your card if they feel you exceed your reasonable ability to repay your balance. So be careful if you apply and receive one of these cards.

If you can’t qualify for an AMEX credit card -- or don’t think your credit score is high enough to get approved -- you can try a charge card first. This helps you get your foot in the door with the issuer, since you’ll have an account with them.

That, in turn, could help increase your chances of getting approved for a credit card in the future. Just track your spending and card usage carefully, so you never spend more than you can afford to repay and maintain a good history of on-time, in-full payments.

How to Get a Good Credit Score

Of course, there’s always the option of taking a step back from that American Express credit card application and working on your score before you try to get a new account. This is probably the financially savviest way to go, since improving your score does more than get you the credit card you want.

The actions you take to raise your score can benefit other areas of your financial life. First, you need to ensure you make all payments -- on balances, bills, and any anything owed -- on time. You also need to make a full payment, not just a partial one.

Doing this over time will raise your score. But it can also help your cash flow right now since you won’t get hit with fees for late or missed payments. You’ll also keep interest at bay if you pay off charges immediately instead of carrying balances, which saves money too.

Knocking down existing debts and reducing credit card balances will give your credit score a boost. And from a big financial picture, reducing debt means reducing liabilities. It also frees up more money to put to better use; instead of paying down debt, you can start saving or investing.

You can also keep an eye on how much of your available credit you use each month. If you have a $1,000 credit limit, keep charges to $300 or less each statement cycle. This keeps your credit utilization low -- exactly what you want to get a good credit score over time.

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Sunday, 17 Sep 2017 2:29 PM
<p>I'm looking for a credit card</p>