Credit cards happen to be the most sought after form of plastic money as they offer the facility of revolving credit. The Amex credit cards go a step further as they enable card members to transfer their outstanding balances from other cards to the American Express credit card. An additional benefit is the offer of a low interest rate of 1.99 per cent per month on outstanding balances. This is significantly lower than the rate of 2.95 per cent charged by mostother banks. As a promotion strategy, Amex is also offering an introductory interest rate of 1.45 per cent per month for the first six months.

But on the Amex card, you have to shell out a minimum of 5 per cent of the balance every month compared to 2.5-3 per cent on other cards. Also, Amex has a higher annual fee of Rs 995.

Says Sanjay Rishi, vice-president & country manager, India, American Express Travel Related Services, ``The launch of the Amex card is in tune with the changing attitudes towards credit. A cardholder feels financially more secure. A credit card also fulfils his aspirations, which have been fuelled by the availability of world class products.''

Amex is banking on its USP of credit transfer and low interest rates to rope in customers. Explains Rishi, ``For a bank, the annual fees generate less than 25 per cent of the revenues, while the balance 75 per cent comes from the interest the consumer pays. Most people are not aware of this fact and with our low interest rates, card memberswill stand to benefit.

Additionally, the balance transfer service will enable card members to cut interest costs by almost 50 per cent.''

Amex cards offer free credit for 51 days, provided there is no outstanding balance. You can also withdraw cash of up to 20 per cent of the credit limit, but this will attract a transaction fee of 2.5 per cent. Service charges for petrol purchases will be another 2.5 per cent.

Amex offers its membership rewards programme as an incentive. The programme provides one point for every Rs 40 spent on the card. These points can be redeemed from a choice of free rewards, including hotel stays, dining and shopping vouchers, travel and holidays, free subscriptions, etc. There is no fee for the non-frequent flyer programme. However, to enroll for the frequent flyer rewards programme, you will have to fork out an additional Rs 800 per annum.

In the final analysis, the Amex card does offer some value-added services. But a prudent card member would do well to work out his ownrequirements before subscribing to any specific bank.