Credit card company helps consumers rein in spending

06.27.09
By Nicholas Storie

For American families having trouble managing household budgets on their own, one credit card company is now offering to help.

American Express has announced a new service that provides current cardholders with the ability to set spending limits on additional cards opened on the account - perhaps cards that are used by teenagers in the family or another member of the household.

The thinking behind the new service is simple - cardholders were asking for extra control features to keep family spending down and American Express could easily implement this restriction.

One of the benefits, says the card company, is that parents can teach their kids how to use credit responsibly. By opening a credit card at an early age, young adults have the opportunity to build not only a solid credit history, but a lengthy one. The major downfall could be if they don't use the card in a responsible way.

"I hear from parents who feel like an ATM, handing out cash to family members and household helpers - not able to easily track where the money goes," said Ralph Andretta, general manager of card member services at American Express.

"This new service is an added control feature that acts like a chaperone, allowing card members to set and track the amount that can be spent at any time," he added.

The new tools from American Express also give primary cardholders the ability to change spending limits at any time and to receive alerts and text messages when a limit has been hit.

While the card company touts the many benefits - including the ability to earn reward points faster with an additional card outstanding - consumers should always be careful not to get carried away and let credit card debt mount. Late payments on bills can wreak havoc on credit scores.

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Card company tries to help financially stressed families