Here are five reasons why your old standby might be past its prime.

Karen Baird has owned an American Express green card since 1989, and, like a good customer, she never leaves home without it. The 42-year-old New Yorker loves the fact that she must pay her AmEx balance in full each month, since it's a charge card rather than a credit card. This helps her stick to a budget — something that isn't always easy on a high-school teacher's salary.

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."

Myth #2: Always paying off my balance helps my credit history.

Reality: Your AmEx might be lowering your credit score.

You might think that since you pay off your balance in full each month on your green AmEx card, you're doing wonders for your credit score. You'd be wrong.

Your debt load is indeed one of the four major determinants of your FICO score, the number used by lenders to determine your interest rates. With revolving credit cards, your perceived debt load essentially amounts to the ratio of your balance to your credit limit. The smaller percentage of your balance you're using, the higher your credit score will be.

But the green AmEx, along with the other AmEx charge cards, has no official, preset spending limit, so American Express doesn't report one to the credit bureaus. Like with all other credit card accounts, it reports your high balance, which is the highest amount ever charged on the card.

So how does the FICO model determine your credit usage? If there isn't a credit limit reported for an account, the FICO model uses the high balance number as if it were your credit limit, says Craig Watts, spokesman for Fair Isaac, the company that calculates credit scores. This will drive your FICO score down if you tend to charge the same amount on the card each month, because the difference between your high and current balances will be very small. To what extent this affects your score depends on many factors, including the length of your credit history and how you handle your other accounts. The longer and better your credit history, the less of an effect the green AmEx will have, says Watts. But if your credit history is short or has a blemish or two, the seemingly high credit usage on the green AmEx might lower your score enough that you are denied credit or are offered only loans with high interest rates.

American Express says it's working with consumer advocates and government agencies to ensure that other creditors understand the difference between a high balance and credit limit. But unless a lender is willing to hear you out, you might find these efforts to be of little use to you as a consumer.

Myth #3: Because it forces me to pay in full each month, it helps me to budget.

Reality: Have you noticed its Payment Flexibility feature?

Many folks like using an AmEx card because they're forced to pay off their balance each month. But the company is quite happy to let people carry balances.

Since 1965, American Express has offered the option of paying off certain travel or entertainment purchases over time through its Sign & Travel program. In 1996, it launched its Extended Payment program, which allows you to revolve purchases of $200 or more.

Here's how it works. When you enroll in either of the two programs, all of your travel-related purchases or those of $200 and greater, respectively, are automatically moved into a separate, flexible-payment balance. Each month, you must then pay your regular charges in full, plus the minimum payment (the greater of $20 or 1/50th of the balance) for the revolving charges. The remaining flexible balance accrues interest charges at a variable rate, typically the prime interest rate plus 9.9%, or 15.4% based on today's current prime rate of 5.5%. That's more than the average for variable-rate credit cards, which these days carry an average APR of 13.5%, according to Bankrate.com.

Myth #4: It has the best rewards program around by far.

Reality: Competitors are quickly catching up.

Launched in 1991, American Express' Membership Rewards program quickly became the richest and most generous such program in the marketplace, well worth its annual fee. But with the explosion of rewards programs over the past few years, plenty of no-fee credit cards now offer steep competition.

One formidable competitor is Citibank's ThankYou rewards network, according to Robert McKinsey, publisher of CardWeb.com, a credit-card information Web site. The program's rewards include merchandise, gift certificates, frequent-flier miles with any airline, and so-called experience rewards such as baseball camp or the services of a personal shopper. Better yet, the program allows members to earn five or more bonus points on certain purchases, vs. a maximum of just two points for Membership Rewards purchases. The program is available, free of charge, with the Citi Diamond Preferred Rewards Card and the Citi PremierPass Card. Unlike the green AmEx card, neither of these cards carries an annual fee.

Another close competitor is MBNA's WorldPoints program, which is available only on its WorldPoints cards. Its concierge service, which offers a personal assistant's help with anything from running errands to party planning, is similar to that offered by the AmEx Platinum and Centurion cards. But with the MBNA cards, some of these services come free of charge. With the AmEx card, the annual fees are $395 and $2,500, respectively. (That said, the American Express program offers complimentary memberships to Delta, Northwest and Continental's airline clubs — the others don't. For more details, see table.)

It's worth noting that you can get the Membership Rewards program with the no-fee American Express Blue, which is not a charge card like the green card but rather a traditional credit card with a revolving balance. The only difference is that you won't earn double points for any purchases.

Myth #5: It offers the strongest consumer protections.

Reality: Visa and MasterCard are quickly catching up.

The biggest advantage to carrying an American Express card, according to CardWeb.com's McKinsey, is the company's international network. If you lose your card or have a problem with your credit line, for example, you can call the company from anywhere in the world and get the help you need. With a Visa or MasterCard, you might be switched back and forth between the card company and the bank issuer, depending on your problem. "That's the big difference with AmEx cards," McKinsey says. "You get consistent customer support anywhere in the world."

But other consumer perks are readily available with many other cards. Do you still hold onto your green AmEx for the complimentary car-rental or baggage-insurance policies, which give you the peace of mind that if your bags are stolen at the airport or you crash your rental car, American Express will cover your expenses? Time to wake up: These days, most Platinum-level or higher MasterCard and Visa cards — offered by many bank issuers without fees — also offer these benefits. Even AmEx's praised GlobalAssist hotline that helps you in emergency situations abroad isn't unique. MasterCard has TravelAssistance services on all Gold-level cards and above (for details, click here). Visa offers Travel & Emergency Assistance Services on all Signature cards.

After Sumiantoro's embarrassing experience with American Express, she has become an active participant in credit-related Internet community boards, and is trying to persuade other participants to avoid the green card. "I ask, Why would you want to have a card that charges you annual fees, makes you pay in full monthly, is not as widely accepted as Visa or MasterCard, and doesn't tell you upfront what your limit is?"

Then again, who said love was rational?

American Express
CardAnnual FeePerksDrawbacksAlternative Solution
American Express Rewards Green Card$65; $30 for each additional cardMembership Rewards program. Earn one point for each dollar spent and two points at standalone gas stations and supermarkets; travel-related benefits such as auto rental and lost luggage insurance, GlobalAssist hotline for travel emergencies, $100 travel bonus when you buy a $2,000 vacation package with AmEx.To redeem for free airfare, you have to convert Membership Rewards points into miles at a two-to-one rate. (To convert miles at a one-to-one rate, get AmEx Preferred Rewards Green, with a $110 annual fee.)

Late fee for all AmEx charge cards varies by state, and could be as high as 2.9% of the delinquent balance, no cap.
See Citi Diamond Preferred Rewards or for frequent travelers, Citi Premier Pass Card.
American Express Rewards Gold$90; $35 for each additional cardMembership Rewards. Same benefits as AmEx Green, plus $150 travel bonus with any $2,500 AmEx vacation package, and access to concert/ sports events tickets in advance of their release to the public.Two-to-one points conversion for air travel rewards. For one-to-one conversion, get AmEx Preferred Rewards Gold with a $130 annual fee.) Larger fee might not be worth the additional benefits compared with AmEx Green.See Citi Diamond Preferred Rewards, Citi PremierPass Card or MBNA Visa Signature.
American Express Platinum$395; $175 for each additional cardMembership Rewards (receive one frequent flier mile for each point), all benefits available to AmEx Gold members, plus free airport club access, concierge service, access to by-invitation-only events.This is an expensive card targeting people with expensive lifestyles. Unless you travel a lot and plan to use the card's concierge services and airport club membership, the $395 fee isn't worth it.See Citi PremierPass Card, MBNA Worldpoints Visa or MBNA Visa Signature
American Express Centurion (AmEx Black) $2,500Everything you have with the AmEx Platinum. Plus: your own personal shopper and private concierge service; travel assistance from agents with 20+ years of experience; the oohs and aahs of restaurant managers and sales people sweet-talking you world-wide.

Owners of the AmEx Black have even formed their own club (not affiliated with American Express), through which they can network with other Black Card holders and get invited to exclusive events, like the Grammys.
Card is available by invitation only. One of the requirements is a history of at least $150,000 annual spending on an American Express card.See MBNA Visa Signature
Visa/MasterCard
CardAnnual FeePerksDrawbacksAlternative Solution
Citi Diamond Preferred RewardsNoneThankYou Rewards program. Earn one point for each dollar you spend, five points at supermarkets, convenience stores and gas stations. Currently, one of the most generous rewards schedules, according to Cardratings.com. Built-in security and travel services: car rental and travel accident insurance, emergency assistance, discounts from Hertz.N/AN/A
Citi PremierPass CardNoneThankYou Rewards program. Earn one point for each dollar you spend and one point for each mile you fly (tickets must be purchased with the card). Great for frequent travelers. Built-in security and travel services: car rental and travel accident insurance, emergency assistance, personal concierge.

Also, you have no preset spending limit, although you do have a revolving credit line. Just pay in full the amount over your revolving line that appears on your billing statement.
Bonus points for flight miles are earned at a three-to-one rate. To earn one point for each mile you fly, get the Citi PremierPass Elite Card, which has a $75 annual fee.N/A
MBNA WorldPoints VisaNoneWorldPoints rewards program.The cash-back options and gift certificate rewards come a bit pricey: you need 5,000 points for a $25 check or 13,000 points for a $100 gift card. (With most cash-back cards, you get $25 for 2,500 points, most rebate cards, including AmEx, offer $100 gift certificates for 10,000 points.N/A
MBNA Visa SignatureNoneWorldPoints rewards program. Visa Signature cards include high-end perks like free concierge service, help with event planning, hard-to-get dinner reservations, as well as comprehensive roadside assistance and insurance worldwide. No preset spending limit, while you still have a revolving credit line. MBNA will approve purchases above credit line on a case-by-case basis and may contact you before approval.Targets individuals with incomes of $100,000 or more.N/A