credit cards

ZYNC from American Express

Thursday, Jan. 7
Posted: 11 a.m.

American Express launched a beta test last month for ZYNC, a new charge card targeted to individuals in their 20s and 30s. Charge cards differ from credit cards in that users must pay monthly balances in full by the due date. Unlike debit cards, charge cards build credit history.

Company spokeswoman Desiree Fish explained in an e-mail that people in this age group "are using debit cards, looking for financial control, are scared of getting into debt or want to avoid it, but still want perks, rewards and benefits."

Anyone can apply for the card, though.

The low-risk product comes at a price -- the basic card has an annual fee of $25. Cardholders then have access to the Membership Rewards Program. Users earn one point per dollar spent.

The addition of a lifestyle-themed rewards pack may cost extra. Currently, American Express offers four packs to choose from -- ECO, GO, CONNECT and SOCIAL. Except for the "green" ECO pack, which is free, the others will cost you some green, at $20 each.

Here's a list of the features each pack offers:

ECO Pack

  • Double Membership Rewards Points on purchases made at "green" merchants listed in Greenopia.
  • 25 percent discount when you redeem points on eco-friendly merchandise.
  • Greenopia Eco Concierge, an online service that helps you find eco-friendly products and services in your area.
  • Carbon Offsets Purchase: American Express will purchase $1 of carbon offsets from TerraPass, which funds reductions in carbon emissions at dairy farms and landfills in the U.S.

GO Pack

  • Double Membership Rewards points on airfare.
  • Lost wallet/passport protection.
  • Discounts at Avis, Budget and Hertz rental car agencies.
  • A $50 credit on any American Express Vacation package booked before Dec. 31, 2010.

CONNECT Pack

  • Double Membership Rewards points on mobile phones and cable services.
  • 25 percent discount when redeeming Membership Rewards points for a mobile phon>e at membershiprewards.com.

SOCIAL Pack

  • Double Membership Rewards points for restaurants, concerts or theater tickets.
  • Weekly e-newsletter with advanced ticket sales.

Who can benefit?

With any fee-based rewards card, I recommend calculating how long it would take to redeem points based on your typical monthly spend. Redemption starts at 1,000 points for ZYNC cards. If you have to dramatically spend more to make up for the fee, you might be better off with a fee-free credit card.

If you want a card only for emergencies, go with a credit card that doesn't charge an annual fee. No sense paying a yearly fee to have a card you rarely use.

If you tend to carry a balance, don't bother with a charge card. You have to pay in full.

Readers, what do you think of charge cards? Would you use them over debit or credit cards?

Questions? Comments? E-mail plastic_rap@bankrate.com.

Read all of the Plastic Rap blog posts.

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