Amex to Parents: We’ll Cap Kids’ Cards
American Express (Stock Quote: AXP) is doing something highly contradictory for card issuers – turning down money. Amex is doing so by allowing parents to cap their kid’s credit card spending limits.
Here’s what Amex is doing. On June 22, the card giant rolled out a new program that enables Amex cardholders (or “Cardmembers” as Amex puts it) to set spending limits for any additional cards that the cardholder might have.
Loosely translated, the program is geared toward parents of teenage or college-aid kids who might “flood the gate” and spend more than they’re normally allowed with a card with no preset limits. Amex allows additional card for family members 15-years-old-and-up.
The new Amex programs changes all that. As the company says on its web site, “Now, instead of providing cash to their teenagers, other family members, the nanny, or other household helpers, Cardmembers can set, manage and track spending credit limits on additional cards, helping them to maintain a tighter household budget and track all family expenditures billed to their Card.”
Any Amex cardholder – Green, Gold, Platinum, and Centurion – is eligible for the new program.
Amex says the “limits” program is in response to demand from adult consumers who are looking to cut household costs, anyway they can. By capping junior’s Amex card, that can’t hurt, and probably will even help with family spending habits, forcing kids and other family card holders to a predetermined spending limit.
In a nice wrinkle, Amex also lets primary card holders go online and track the spending track record on additional cards taken out in their name. In addition, parents can sign up for an email alert telling them that the card limit is being approached. Also, the cardholder can modify the limit whenever they want
Parents who want to help teach their kids abut credit card responsibilities, and help them earn a good credit score at the same time, may well bite on the new Amex limits program.
Call it the best of both worlds – more financial protection for your family – and less trips to the ATM to shell out cash for the kids.
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