Get Rid of Your Green AmEx Card!

The card has been so helpful, in fact, that when her son turns 18 in May she plans to pay an extra $30 (in addition to the card's $65 annual fee) to make him an authorized user — just so he'll get in the habit of paying off his debts immediately.

Baird is one of at least 15 million Americans who carry a green AmEx in their wallets, according to an estimate by the Nilson Report, a trade journal. (American Express doesn't break down the number of users for its various credit cards, which at the end of 2004 totaled 39.9 million.) This ranks American Express a distant fourth to Visa (295.3 million cards), MasterCard (271.5 million) and Discover (54.5 million).

But what AmEx may lack in volume, it makes up for in customer loyalty. Many of its members have carried the green card for decades, and some have stayed with it since it was first launched in 1958, according to Desiree Fish, an American Express spokeswoman. "They really have a sense of pride of having that card and that relationship for so long," she says.

In the Cardholder Reviews section of Cardratings.com, a credit-card information Web site, the green AmEx earned the highest average rating (3.77 out of 5) of the 25 most-reviewed credit and charge cards, as of March 11. There were twice as many positive reviews as negative ones, which, according to the site's founder Curtis Arnold, is unusual: Consumers typically use the reviews section to complain about bad experiences with their credit cards, he says — not to rave.

But is their love justified?

Not according to Arnold, who cites the green card's high fees. The card might have been a great deal in the past, when most other cards also had annual fees and few came with the rewards program or additional consumer perks that distinguished AmEx charge cards. But times have changed. "[The green card has] become a dinosaur of the past," he says. These days, consumers can often get similar benefits with other credit cards, without fees.

Not convinced? Here are the five most common reasons why people love their green AmEx cards — and five reasons why those advantages might not be as great as you think.

Myth #1: It doesn't have a preset spending limit.

Reality: It does. And you may find out the embarrassing way.

In February 2003, Tessy Sumiantoro and her husband were fast asleep in a Virginia hotel room when the receptionist called her downstairs to tell her that her green AmEx card had been denied. When she called AmEx to ask why the $100 charge didn't go through, she was told she had to pay down her $3,000 balance before she could use the card again.

"That was the first time I realized there was a limit on the card," she says. "I'd never gone through a credit-card rejection before. It was embarrassing and very upsetting." Afterward, she did some research on consumer credit discussion groups and discovered that many other people have experienced the same situation. After the incident, she closed her account, and now uses other credit cards. "Now, I don't pay an annual fee at all, and I know upfront what my limit is."

American Express confirmed that they may occasionally stop a charge or freeze the account if the card balance is greater than is typical for the card member. "No preset spending limit does not mean you don't have a limit," says AmEx spokeswoman Fish. "Every person kind of has a limit based on their risk criteria." That risk criteria includes a person's FICO score and history and relationship with American Express. "We can't say [to] everybody [there's] no preset spending limit, you can spend as much as you want," explains Fish. The longer your relationship with American Express, and the better your payment history, she says, the more you will be allowed to spend on the charge card. Otherwise, she says, "there are going to be times we're going to ask you to prepay the bill so we know you can cover these charges before we can approve future ones."

For Sumiantoro, who had always paid her bills on time, this was dismaying. "If I can't be sure that every charge that I make will go through, it makes me wary," she says. "It makes me wonder when it will happen again."