Why applying for an “American Express Backed Credit Card” is the smartest thing you will do today.

Posted by Noob Master on Sep 4, 2012 in American Express, Amex, Credit Cards, credit score, Uncategorized | 4 comments

Wow, that’s a long title. But there’s truth in it. Applying for an American Express backed card could be the smartest thing you do all day. I was emailing with a reader the other day about the advantages of Amex cards, and I realized I’ve never blogged about Amex’s backdating policy. My bad, but here ya go.

Credit score is important.

You may already know this, but your credit score is important. Another thing you might know is that there’s incredible value in rewards cards. So, we want to keep our credit score in good condition so we can take advantage of these offers. Also, it goes without saying, but I’ll say it anyway, you want to keep your credit score in great condition so you can save $$$ on any loans you take out.

If you’re thinking about applying for a mortgage, don’t apply for any rewards cards 4-6 months before you apply for a loan. Just to be safe. True story: Luke recently closed on a house and he had just applied for 5 cards three months before. The 10+ cards he has applied for this year never came up, and he was still able to get the most competitive rate out there. But everyone’s situation is different, so I always suggest 6 months to be safe.

Average age of account.

Average age of account plays an important role in your credit score. You want a long history of positive credit activity and long average age of accounts. This is why I always try for a retention bonus or downgrade my cards to a no annual fee card, and then I keep them forever. Here’s my full post on when and how to cancel rewards credit cards. 

Also, keeping your cards and their credit limits is a good thing. This will decrease your credit utilization or debt to credit ratio. Of course, I always suggest paying off your bill in full at the end of every month, but I know life throws you curve balls. No matter what, you will need to keep your debt to credit ratio under 20% to maintain a good to great credit score.

Amex’s backdating.

This is where American Express cards come into play. American Express will backdate all your credit cards with them to the earliest date you applied for one of their cards. For example: Kevin applied for a basic American Express card when he was in college and has had that card for 5 years. This is great, but now that Kevin is out of college and has a steady job and income, he wants to apply for two more Amex rewards cards.

What’s great about this is the two cards that Kevin just applied for will be backdated to his original card’s date. That means instead of having 1 card with 5 years history, he will now have 3 American Express cards with 5 years of account age. This is great and will increase his average age of credit accounts across the board.

All my American Express cards have been backdated to the date of my very first American Express card, automatically. You can see on the front of your card where it says “member since.” If your American Express cards aren’t being backdated, you can call in and speak to a rep and they will do it for you.

This only works on American Express backed cards- not cards that are backed by other banks and happen to be Amex. For instance, the Citi AAdvantage Amex will not qualify for American Express backdating, but the American Express Starwood Preferred Guest card would.

What to do?

Well, if you don’t have an American Express card, get one or two. During my last App Party, I signed up for the American Express® Premier Rewards Gold CardCard and the Amex Hilton card (expired). Both were backdated. I love it! Reaping rewards and helping my credit score.

Of course, you all know by now that the Starwood Preferred Guest® Credit Card from American Express is dropping its sign-up bonus from 30,000 to 25,000 on September 4th, aka “today.” Just another option. If you’re looking for an Amex card with little spend (like $500 in 3 months), there’s the Gold Delta SkyMiles® Credit Card from American Express.

Starting your relationship with American Express will help your credit score in the long run by building a nice long positive credit portfolio, and it just keeps getting better with time. Plus, you get to take advantage of their great products and rewards. Win, win.

Only apply for cards with minimum spends you’re comfortable with and if your credit is in good condition. If you’re using an Amex with Amazon payments, be careful and make sure you’re doing other purchases as well.

I do receive a referral credit for the cards mentioned in this post. A huge air high five if you support the blog by applying through one of my links.

Disclaimer: This content is not provided or commissioned by American Express. Opinions expressed here are author’s alone, not those of American Express, and have not been reviewed, approved or otherwise endorsed by American Express. This site may be compensated through American Express Affiliate Program.

— Noob Master