Recently American Express announced a new and unique service that provides American Express Charge Cardmembers with the ability to set spending limits for additional cards on their account. This allows them to control expenditures in for instance a household with kids, nannies and helpers.

How does it work? The primary card holder allows others (people who are at least fifteen years old) to spend only the amount they’ve approved. He can modify the spending amount anytime, online or over the phone.

The primary card holder can sign up to receive emails or text messages to alert them when a set spending amount is being approached or has been reached on one of their additional cards. All charges made on additional cards are listed separately, so the primary card holder can easily track and manage household spending.

Other benefits
There are other benefits to the new service. For those over the age of 18, being an Additional Cardmember on a parent’s account, allows them to build a credit history – a tool in creating a strong financial future. Further, card holders can earn points faster because all additional cards are linked to the primary card holders’ Membership Rewards account. Lastly, card holders pay no interest or finance charges because all charges are immediately paid for in full at the end of the billing cycle.

Although this service is new and unique, Disruptivebanking.com recently reported on BillMyParents, which is a service with a similar purpose. BillMyParents allows children to shop without actually giving them access to the credit card number. The primary card holder can accept or decline every purchase, giving them an even higher level of control.

Is the service offered by American Express a good alternative? Which of the two services would you prefer? And should more banks and credit card companies offer these services? Let us know.