Why are American Express Credit Cards So Expensive? (2024)
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So Why Does American Express Have Higher Processing Fees? The American Express business model is based on the rewards they offer for using their card brand to pay for purchases. And because they believe they attract a more affluent customer, they claim their cardholders make more purchases and buy higher priced items.
The main reason why Amex cards are so expensive is that many American Express credit cards offer generous rewards rates and high-end perks, which warrant steep annual fees. Amex cards are targeted toward people with good credit and high incomes who are likely to charge large amounts to their cards every month.
American Express is one of the leading card issuers in the United States. It's known for its top-notch customer service and some of the best rewards available. From ultra-elite business travel cards to everyday rewards, American Express has credit cards that are a good choice for many different types of cardholders.
“They charge a premium to their merchants to take their cards,” said Lisa Ellis, a senior analyst at MoffetNathanson. “And merchants are willing to pay that premium because American Express is bringing them the most affluent, biggest spenders.”
If you determine that the majority of your spending is done on restaurants, groceries and travel, this card might be a good fit for you. The bonus this card offers for these categories is substantial and will net you significant rewards. Assuming, of course, that you spend enough to outweigh the $250 annual fee.
Due to higher transaction fees than other cards, some merchants won't accept Amex cards. You can't get an Amex card without at least a good (670 or higher) credit score. Annual fees for Amex cards can be high. You must pay the balance on Amex charge cards in full each month, so you can't use them to “borrow” money.
A rating of 5 is the best a card can receive. Why it's one of the hardest credit cards to get: The hardest credit card to get is the American Express Centurion Card. Known simply as the “Black Card,” you need an invitation to get Amex Centurion.
The most prestigious credit card is the invitation-only Centurion® Card from American Express (Amex Black Card), as well as The Platinum Card® from American Express, and the Chase Sapphire Reserve® card.
American Express has its own ecosystem of rewards and benefits. What sets it apart is the consistency of the rewards, depending on the level of credit card. It also offers points collection (called Membership Rewards) or cash back, hotel upgrades, travel insurance and lounge access.
The different fees often make or break a deal for a merchant. This is why many merchants, especially small businesses, don't accept American Express. American Express' interchange fee is just too high. Providers like Visa and Mastercard charge between 1.15% and 2.5%, while Amex charges merchants between 1.43% and 3.3%.
American Express's main direct credit card competitors are Mastercard, Visa, and Discover. While Mastercard and Visa have a different business model than American Express, they all compete in the credit card space. Financial institutions that issue credit cards also compete with American Express for consumer business.
Places Where American Express is Not Accepted: Cuba, Sudan, South Sudan, Iran, Syria. Major Retailers That Accept American Express: Amazon, IKEA, Sears, Target, Walmart, Lowe's, Apple, Best Buy, Staples, CVS. Major Retailers That Don't Accept American Express: Costco, small non-chain stores/restaurants.
While it may seem hard to believe, there are two ways to avoid the annual fee on this premium card.
Open the Morgan Stanley version of the card and a Platinum CashPlus account. There are multiple versions of The Platinum Card® from American Express. ...
If you're active-duty military, American Express waives the fee.
Amex Platinum ultimately offers more value if you travel frequently, though. For example, its benefits include airport lounge access, while the Amex Gold Card's perks do not. When it comes to ongoing rewards on purchases, Amex Platinum has a higher maximum earning rate and better travel rewards.
If you're on the fence about whether it's worth continuing to pay the fee, you can call and ask Amex to waive or lower it. You might not be successful at having the fee waived, but American Express is known to offer generous retention bonuses instead.
While it may seem hard to believe, there are two ways to avoid the annual fee on this premium card.
Open the Morgan Stanley version of the card and a Platinum CashPlus account. There are multiple versions of The Platinum Card® from American Express. ...
If you're active-duty military, American Express waives the fee.
It is hard to get an American Express credit card because all cards offered by American Express require good credit or better for approval, which may be out of reach for the average consumer. Applicants need a 700 credit score and a steady income to have good approval odds for an American Express credit card.
The most prestigious American Express card is the Centurion® Card from American Express. You need an invitation to get it and an income of at least $250,000 a year to merit consideration, according to online reports. Note that Amex doesn't disclose the requirements for this card.
Introduction: My name is Annamae Dooley, I am a witty, quaint, lovely, clever, rich, sparkling, powerful person who loves writing and wants to share my knowledge and understanding with you.
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