One thing not discussed is the relationship between AmEx's big purchases and its fees. American Express puts a lot of effort into keeping its paying consumers happy because they are both American Express customers (because they pay fees) and because customers really want to use American Express cards at merchants (and so American Express can charge those merchants higher fees).
I'll give you an example. Years ago, I bought a fancy sofa online. The merchant sent periodic "don't worry, we're just behind schedule" every week or so for months, and then sent one last email saying they had declared bankruptcy. I was way out of my chargeback window, but when I called American Express, they instantly refunded me my purchase anyway. That experience meant that, if I ever make another big purchase online, I will go out of my way to use an American Express card, including switching merchants if necessary.
Keeping customers who make big purchases happy costs money, both in losses and in administrative overhead, but it pays out on both the customer and merchant side in the long run.
AmEx was my first card, and I've stuck with them. Despite some decline, their customer service is still top-notch. I always put major purchases on there.
Their Platinum travel insurance has been a lifesaver. When a volcano stranded us, AmEx covered our stay at the TWA hotel in JFK. Lost luggage? They reimbursed $400 in clothes, no questions asked. Disputes? I haven't had many but they were always resolved in my favor.
I experimented with having a Chase card when they launched the Reserve. Europcar defrauded me, and Chase wouldn't even let me file a dispute. I eventually won by sending a written complaint (FCBA), but I ditched the card right after. Plenty of reports online suggest Chase discourages disputes heavily.
My experience with Chase chargebacks has been stellar.
I have the sapphire preferred card, and the Amazon card.
I use the sapphire preferred card for almost everything, it is my “daily driver”. I never touch my Amazon card, but I have it tied to my Amazon account, and it gives 5% off. Anyone who spends serious money at Amazon should have it just for that benefit alone.
Anyway, a couple of years ago I noticed that it felt like I was paying more on my credit card, and had been for awhile. I wasn’t really paying very close attention to my finances unless something “felt off”.
Well, something felt off, and when I investigated, I saw that there were hundreds of Amazon purchases that I hadn’t made, going back almost 2 years.
Because all my Amazon purchases go through my Amazon chase card, and because I make so many purchases on Amazon, when I see AMAZON on my credit card statement my eye just skips over it.
Well, I noticed a purchase that didn’t line up, and when I investigated, I saw that it was also on the wrong credit card, it was on my sapphire card and not the Amazon card.
Using the tools to dump your entire purchase history to CSV, it was easy to find all of the fraudulent purchases, because they all used the wrong card.
The purchases stretched back over 2 years, for a total price of almost $30,000. It was sort of a perfect storm of me ordering lots of stuff on Amazon, not really looking at Amazon fees on my credit card listings, and doing a couple of remodels during this time so funneling large amounts through Amazon and Home Depot were not out of the norm.
I thought I was screwed when I saw that it had gone on for more than 2 years and 30k, but when I called up Chase they took care of it almost instantly. I was amazed. They definitely earned a loyal customer that day.
My wife passed away and made a recurring membership-type charge using my credit card. The merchant won't let me cancel without a court order, which is difficult because the estate is closed. Chase told me to go fuck off until they re-bill me, but won't prevent that from happening, and resolved my dispute in the merchants favor.
I ended up using public shaming to get the desired outcome.
My problem with Chase: they stopped integrating with bill pay so I couldn’t automatically pay off the balance. It was always manual.
I talked to customer service and that was a unique experience. After about trying to blame me for 99% of the call, they finally admitted it was a feature.
Tangent but this makes me feel sad at the customer service I lost when first republic went tits up. Ugh. They were just like this and the best customer service I've ever had with a bank
What you describe works a lot like insurance from the customer's point of view.
Normally for insurance the suggestion is that you should 'self-insure' smaller risks, and only purchase third-party insurance for catastrophic risks. The theory being that insurance has extra overheads and on average has to cost you more money than you get out. But that for catastrophic risks, you can't rely on averages.
(Of course, that only applies in the absence of tax or regulatory arbitrage. Eg I hear in the US your employer can buy health insurance from pre-tax money, but you'd have to use post-tax money for paying out-of-pocket.)
Similar for a company like AmEx you have to weigh whether the occasional wins you describe are worth the constant drain. Or whether you should just put the winnings in a piggy bank, and use a small part of that to finance the replacement for the never-arriving fancy new sofa.
Credit cards let you externalize the cost, since merchants raise their prices to account for credit card fees, but raise their prices for everyone, not just credit card users. In other words, the cost of better consumer protections from credit cards is subsidised by those not using credit cards (and those who carry a CC balance and pay interest, but that's another matter).
Alternatively, maybe practically everyone uses credit cards, so the "subsidy" is negligible, and everyone loses slightly on average. But then you'd lose even more if you didn't use a credit card and subsidised everyone else.
It's basically a big version of the Prisoner's Dilemma.
> US your employer can buy health insurance from pre-tax money, but you'd have to use post-tax money for paying out-of-pocket.
Ya, what’s up with that? It is totally true, but I’ve never been able to figure out why it’s true like that, given its huge unfairness. Is it just punishing people who get laid off from their job and have to go on Cobra? Likewise, are independent contractors just SOL?
That practice of continually saying "Just a little longer..." is also illegal [0] unless they gave you the option to cancel the order and receive a refund...but not that you care about the FTC if you're circling the drain.
Huh, I wish I'd known about this. I tried to chargeback something from a scam company I mistakenly ordered electronics from who never delivered. I'd paid using a CashApp debit card, and when I disputed it they permabanned me from CashApp.
I’m not sure how this works in US, however certainly in UK, and I know of comparable experiences in several other countries, credit card companies are legally required to do this. It’s not a perk of AmEx, it’s a perk of using a Credit Card.
Specifically in UK, the credit card provider is jointly and severally liable for any breach of contract or misrepresentation by the vendor.
When I was working for Microsoft China, we had cases where a Chinese restaurant in Bellevue would go after Chinese coworkers visiting the states because ICBC AmEx didn’t offer the same fraud protection as an American or European sourced AmEx (then they would use the numbers somewhere else and create bogus charges). Countries have different rules and protections, and China puts the burden on the cardholder proving fraud took place (rather than the merchant that fraud didn’t take place).
> I’m not sure how this works in US, however certainly in UK, and I know of comparable experiences in several other countries, credit card companies are legally required to do this. It’s not a perk of AmEx, it’s a perk of using a Credit Card.
I'm pretty certain this is not how it works in the UK, or anywhere else.
I had the exact opposite experience with them, and cancelled my card.
I returned something, and the company didn't credit the return. I rarely return things, and this was the only return I had ever had with amex. Amex asked if I had contacted the company, and I did, but following up was slow and involved tracing the package and verifying the signature. In the end the company didn't resolve it.
So then I contacted american express again and they did not process a chargeback. They said it took too long, even though I had done as they asked. I was really fed up with it, and disappointed because I thought they were different. So I could not in good conscience continue with them and cancelled my card.
(I've actually had lots more positive results from visa before and since)
Amex isn't very popular in my country but they meet a really good intersection between the old school white glove service and an easily usable hassle free modern service
I also have similar AmEx stories where they took care of me on purchases that didn't go as planned. It will have paid for the annual fee, for many decades.
When I was a kid, I remember my parents used to try to pay for everything with their Discover card and would only use their Visa as a fallback. I was too young to understand the differences between credit cards at the time, but I remembered my parents always asking "do you take Discover?" everywhere we went. I never realized this wasn't just something only my parents did until I saw the Futurama joke about this years later: https://www.youtube.com/watch?v=2-nSwKOVZyk
Fry: Do you take Visa?
Cashier: Visa hasn't existed for 500 years
Fry: American Express?
Cashier: 600 years
Fry: Discover?
Cashier: Sorry, we don't take Discover
> Moreover, Discover cards come with no annual fees, while American Express keeps increasing its card fees with every card “refresh”.
Not all Amex cards have fees.
Also it would have been nice if the author went a little into the history like how Discover was once part of Sears. Not sure if this is still the case or not, but the classic Green, Gold, and Platinum cards are charge cards and have to be paid in full each month. Some of these things may explain why Amex is more affluent.
My Discover card has actually benefitted me more than my (entry -level) AMEX. Discover has 5% cashback categories every quarter, and most of them are for common charges. I've had the bonus on "gas" two or three times already. Also Amazon, grocery stores, paypal.
Not all charges can be PoT'd, though. In general you still have to pay the entire statement balance each billing cycle (it's a good habit to have when using credit cards anyway).
To add to this as well, this can be disabled, but it's on by default for new applicants. They can put a limit on the charge cards as well, so it can be almost an ambiguously limited credit card now. That said, I don't think being given a set limit is very common, or very impactful for the average person unless you're a large spender.
> in 2023, Amex cardholders (U.S. consumers only) spent, on average, $13,945 per year, or almost 4 times more than Discover cardholders
Honestly, not surprised. AXP/AMEX marketing team and superior customer service in the early days of the programs made it the top card to own amongst wealthy individuals.
The once coveted "black card" or Centurion product was invite only to existing card holders with the platinum card and met a certain annual spend criteria (some 6 figure amount). Card holders of this product paid some couple thousand dollar "initiation fee" and of course the annual fee. AXP got paid and then double dipped on the merchant side with even higher fees (the "no limit" cards charge a higher transaction fee).
Its exclusivity and hype has died down, especially when it started to issue centurion for businesses. Very easy to hit the required spend limit and use it as a weird flex at your next dinner party or restaurant outing with friends/family.
Honestly, if it wasn't for the centurion product. AXP would just be another credit card company and credit card network out in the wild (maybe it would have just been like "Diner's Club")
> use it as a weird flex at your next dinner party or restaurant outing with friends/family.
Went to a dinner with some of my gfs friends and her in NYC recently during my latest trip to the US (they work for Amex apparently). At the end of the dinner they suggested we all just pay separately because it is more simple. It confused me but I didn't mind. I understood it when the waiter held down a silverplate for us to put our credit cards on, and they pulled out their gold and platinum cards respectively, my gf also followed with her platinum card.
Then there was me, the only Europoorean at the table, and I put my regular card with a picture of a small kitten on the plate. The waiter complimented me on my card with a smile and I kinda cherish that. American flexes are weird to me, lol.
I don't really get it, except for the access to airport lounges with free food/drinks, if you do fly a lot.
> Then there was me, the only Europoorean at the table, and I put my regular card with a picture of a small kitten on the plate. The waiter complimented me on my card with a smile and I kinda cherish that. American flexes are weird to me, lol.
A true German would have put down cash, and seen that as a flex perhaps. (Or at least would have done so in the past. I haven't lived there in a while.)
Doing something out-of-context also reminds me how the English put each other firmly into their class system by their accents. So how / where you grew up will follow you around your whole life and colour your interactions.
However, if you come in with a foreign accent--say German-- that overrides this clue, so it's easier for you to interact with both working class and upper class people with less weirdness than the natives have to endure.
This doesn't seem like a flex situation, as the Gold and Platinum aren't difficult to get and are extremely common. The gold in particular earns a large bonus on restaurant spending so I always pay with that, and it never crossed my mind that anyone would be impressed.
As for why, for me and a lot of people, it is the points/cash back. Since European fees are capped, there isn't much opportunity for credit cards to bribe customers with perks. I make about 4% back on my credit card spending and pay off my balance every month, so no interest payments. I imagine people living in NYC are probably making 6 figure incomes, so the amount of points/cashback would be a lot more than the annual fees. Then of course you also get lounge/hotel/ etc. benefits.
I went to the malls and I balled too hard
"Oh my god, is that a black card?"
I turned around and replied,
"Why yes – but I prefer the term African American Express"
I wonder if the AMEX cards historically being "charge cards", which have to be paid in-full at the end of the month, encouraged healthy habits and better credit scores.
I credit my first AMEX with helping to keep my spending in-check when I started high-paying jobs because I always had in the back of my mind that the balance had to be paid-in-full. Take a lavish vacation? Make sure you have the savings to pay it off. In the end it was always paid off monthly.
> encouraged healthy habits and better credit scores.
Like you said, it required the habits or else they'd close your card, so it enforced better habits. Also the charge-cards don't impact your spending in your credit report, so it definitely helps the holder's credit score.
The charge cards don't even have to be paid in full anymore. They offer "pay over time" for charges on platinum/gold/green/etc which effectively makes them credit cards.
I worked on credit card processing at a Visa Level 1 merchant, 2001-2003. Amex was far more difficult to handle than any other type of card. 13 digits in a card number, 4-digit CVV, other weird problems that other card types didn't have. Small businesses dislike taking Amex because the per-transaction processing fees are bigger.
As a consumer who got in trouble during the 2008 depression, I will note that Discover is less forgiving, and quicker to sell your debt to debt collectors than any other bank.
My take is to avoid both as a consumer, if you can.
My dad worked at a hotel and he noticed that anytime Amex card holders did a charge back, even if their signature matched their ID, they'd always pull the funds, and the hotel would lose money.
We got Amex after that, since it means if we ever have a true theft/card skim issue, chances are high they will back us, instead of putting the debt on us. If that ever changes, I'll ditch them. The small shops might not take them, but every gas station does, and I rather not pump gas with my debit card.
Putting aside whether the points & benefits value are the best in the business anymore (I think they all got a lot worse post ZIRP)..
Amex gets the majority of my spend because they are cardholder friendly and easy to deal with. I never spend time in opaque phone trees, waiting for callbacks, on hold or having to argue/escalate any issue.
Their website is good, their phone support is good, and I feel protected using the card vs having to deal with some random issuer of a branded Visa / big dumb bank / etc.
Anecdotally, Discover took less than 10 minutes from dialtone to ending the call to return $1k back to my credit after having been hacked and texting "ACCEPT" at 4AM to an insane $ amount that I assumed was a bill.
why would you ever use a credit card if you have funds available for purchase on your debit card? especially for small purchases like gas, seems like an unnecessary way to build up debt.
EDIT: I was unaware of all the below listed advantages for using credit cards, especially about % cash-back opportunities, no idea if my bank also supports something alike. Anyway, thanks, I have to investigate/rethink how I pay from now on.
EDIT2: I just learned my country does not support cashbacks, not in any one of the banks.
As a consumer in the UK, I would wholeheartedly recommend Amex... they've always taken my side and even actively argued my case against "rogue" retailers and companies whenever I've had a problem... their customer service is
exceptional compared to almost any other company I've had a card with.
> As a consumer who got in trouble during the 2008 depression, I will note that Discover is less forgiving, and quicker to sell your debt to debt collectors than any other bank.
Discover does lots of subprime lending so that makes sense, sell the debt off quickly to get the most pennies per dollar for the bad debt.
> 13 digits in a card number, 4-digit CVV, other weird problems that other card types didn't have.
> Discover is less forgiving,
> My take is to avoid both as a consumer, if you can.
These don't seem like equal complaints. I would recommend Amex if you are a high-spender and pay your bills on time every month. They have way better customer service and perks.
I have been an Amex card holder for nearly 30 years. It's one of the few brands I have real loyalty to because they've saved my bacon so many times while traveling and in other ways.
The conclusions of this analysis match my own personal experiences discovering that friends and others I had success with in business were also Amex cardholders. Amex cardholders are generally more affluent and better at understanding and handling their own finances compared to cardholders of other brands. I chalk that up mostly to Amex being more selective about who they issue cards to.
As an investor that means there's a lower risk (or higher risk adjusted return) for every dollar Amex holds on its books compared to other card issuing lenders.
Also have a fierce loyalty to AmEx as a customer. I use it as often as I can to pay for things. Their customer services is phenomenal, and its nice to have an arbiter between you and a merchant when things come up. Anytime I've had an issue with a merchant, I try to work with them first, and then jump to Amex if they aren't willing to work with me. In every instance Amex has been able to fix the problem, typically by refusing payment to the vendor after an investigation. It's like having insurance for your purchases.
I say this as a generic green card member of 25 years. I know a lot of people pay for higher tiers for travel benefits, but the base service has been excellent for my needs.
All credit cards provide this, though. Certainly not all will have exemplary customer service but I have a Chase card I've successfully disrupted transactions through as well.
This doesn't sound like something a rational, financially-savvy person would write - instead, it sounds like the opinion of someone who is easily manipulated by a few sales-driven anecdotes. The comment just sounds like a shabby advertisement.
Also, are most Europeans financially illiterate and poor since they aren't AmEx customers and have general disdain for the debt-driven economy of credit cards?
Wow, being accused of a shill at the same time as the most uncharitable take on my comment possible.
I'm in no way associated to AmEx other than being a customer. I'm a frequent traveler and formerly digital nomad (78 countries and counting), and so have had many opportunities to see the benefit of my card. I've even mentioned one particular instance before on HN: https://news.ycombinator.com/item?id=36624867 Since HN skews towards people who work in the tech industry, I imagine I am not alone in that many of us are likely folks who both travel often and have an AmEx.
I didn't say anything about Europeans, and I didn't say people who don't have an Amex are financially illiterate or poor, I said the folks who Amex has as customers are affluent and better at handling their finances (read: better at paying off their debts). This is reflected in the data, including what is shared in the post. It's not at all a controversial statement, and espousing the positive side of that coin does not indicate in any way that I believe or hold the views from the other side of the coin.
I don't think they meant anything about Europeans since Amex is primarily an American brand. I think the data proves it out and it could also have something to do with their history as a charge card (i mentioned in another comment).
A charge card means that if you decide to put $10k on the card to buy a new big thing, you need to have 10k to pay it off at the end of the month.
That would logically self-select for people who have the financial ability to pay off a card that has an 'unlimited limit'. As the card levels go up, you've also got hefty fees ($500+) which again select for people who view $500 as a small price compared to the benefits.
I think the OP was rational in their conclusion. Sidenote, it also has nothing to do with 'debt fueled economy' -- there's no debt accrued with charge cards.
AmEx, at least classically (though less so today) is a “charge card”, not a “credit card”. It’s a subtle distinction, since they do extend short-term credit, but until Pay Over Time became a thing recently, your AmEx bill had to be paid in full every month.
As they made no money from balances carried, they have traditionally had higher merchant fees and annual fees for cardholders. The flip side, for the merchant, is that wealthy American cardholders vastly prefer using AmEx, so if those are part of your target market, you are much better off accepting it.
I think your tone is not helpful here. The parent isn't attacking you.
Clearly US & ROW card markets are wildly different due to various regulations; the structure of the US market and related incentives are pretty unusual. A statement about a US-based experience doesn't & can't translate toe Europe.
They really are selective. In my 20s I once missed a single payment to a department store card that I owed $60 to (Not an Amex card) and Amex abruptly closed all my accounts in response. I'd never been late paying Amex, nor did I have anything else negative on my credit.
It took me a decade or so to get over my grudge against whatever algorithm triggered that, but I have an Amex card again.
Those signs are generally outdated. I've had cashiers tell me they don't take Amex, and when I tell them to try and run it regardless it almost always ends up working. PoS systems have evolved a lot in the last decade.
Lot of places take Amex now. I see most POS taking it. There are some holdouts who only take Visa, Mastercard but pretty much everywhere in my small town take Amex without any comments.
On their investor day in May, Amex said international acceptance was one of their highest priorities. And they have been making impressive progress in target markets.
Readit News
I'll give you an example. Years ago, I bought a fancy sofa online. The merchant sent periodic "don't worry, we're just behind schedule" every week or so for months, and then sent one last email saying they had declared bankruptcy. I was way out of my chargeback window, but when I called American Express, they instantly refunded me my purchase anyway. That experience meant that, if I ever make another big purchase online, I will go out of my way to use an American Express card, including switching merchants if necessary.
Keeping customers who make big purchases happy costs money, both in losses and in administrative overhead, but it pays out on both the customer and merchant side in the long run.
Their Platinum travel insurance has been a lifesaver. When a volcano stranded us, AmEx covered our stay at the TWA hotel in JFK. Lost luggage? They reimbursed $400 in clothes, no questions asked. Disputes? I haven't had many but they were always resolved in my favor.
I experimented with having a Chase card when they launched the Reserve. Europcar defrauded me, and Chase wouldn't even let me file a dispute. I eventually won by sending a written complaint (FCBA), but I ditched the card right after. Plenty of reports online suggest Chase discourages disputes heavily.
I use the sapphire preferred card for almost everything, it is my “daily driver”. I never touch my Amazon card, but I have it tied to my Amazon account, and it gives 5% off. Anyone who spends serious money at Amazon should have it just for that benefit alone.
Anyway, a couple of years ago I noticed that it felt like I was paying more on my credit card, and had been for awhile. I wasn’t really paying very close attention to my finances unless something “felt off”.
Well, something felt off, and when I investigated, I saw that there were hundreds of Amazon purchases that I hadn’t made, going back almost 2 years.
Because all my Amazon purchases go through my Amazon chase card, and because I make so many purchases on Amazon, when I see AMAZON on my credit card statement my eye just skips over it.
Well, I noticed a purchase that didn’t line up, and when I investigated, I saw that it was also on the wrong credit card, it was on my sapphire card and not the Amazon card.
Using the tools to dump your entire purchase history to CSV, it was easy to find all of the fraudulent purchases, because they all used the wrong card.
The purchases stretched back over 2 years, for a total price of almost $30,000. It was sort of a perfect storm of me ordering lots of stuff on Amazon, not really looking at Amazon fees on my credit card listings, and doing a couple of remodels during this time so funneling large amounts through Amazon and Home Depot were not out of the norm.
I thought I was screwed when I saw that it had gone on for more than 2 years and 30k, but when I called up Chase they took care of it almost instantly. I was amazed. They definitely earned a loyal customer that day.
My wife passed away and made a recurring membership-type charge using my credit card. The merchant won't let me cancel without a court order, which is difficult because the estate is closed. Chase told me to go fuck off until they re-bill me, but won't prevent that from happening, and resolved my dispute in the merchants favor.
I ended up using public shaming to get the desired outcome.
I talked to customer service and that was a unique experience. After about trying to blame me for 99% of the call, they finally admitted it was a feature.
Normally for insurance the suggestion is that you should 'self-insure' smaller risks, and only purchase third-party insurance for catastrophic risks. The theory being that insurance has extra overheads and on average has to cost you more money than you get out. But that for catastrophic risks, you can't rely on averages.
(Of course, that only applies in the absence of tax or regulatory arbitrage. Eg I hear in the US your employer can buy health insurance from pre-tax money, but you'd have to use post-tax money for paying out-of-pocket.)
Similar for a company like AmEx you have to weigh whether the occasional wins you describe are worth the constant drain. Or whether you should just put the winnings in a piggy bank, and use a small part of that to finance the replacement for the never-arriving fancy new sofa.
Alternatively, maybe practically everyone uses credit cards, so the "subsidy" is negligible, and everyone loses slightly on average. But then you'd lose even more if you didn't use a credit card and subsidised everyone else.
It's basically a big version of the Prisoner's Dilemma.
Ya, what’s up with that? It is totally true, but I’ve never been able to figure out why it’s true like that, given its huge unfairness. Is it just punishing people who get laid off from their job and have to go on Cobra? Likewise, are independent contractors just SOL?
The protection that Amex has given me, when it comes to chargebacks for purchases that didn't work out has easily justified the annual fee.
And that's before any perks like miles or cashback or anything else.
[0] https://www.ftc.gov/business-guidance/resources/business-gui...
[1] https://www.ftc.gov/business-guidance/blog/2020/04/93-millio...
Specifically in UK, the credit card provider is jointly and severally liable for any breach of contract or misrepresentation by the vendor.
> I’m not sure how this works in US, however certainly in UK, and I know of comparable experiences in several other countries, credit card companies are legally required to do this. It’s not a perk of AmEx, it’s a perk of using a Credit Card.
I'm pretty certain this is not how it works in the UK, or anywhere else.
That's what the "chargeback window" is used for.
I returned something, and the company didn't credit the return. I rarely return things, and this was the only return I had ever had with amex. Amex asked if I had contacted the company, and I did, but following up was slow and involved tracing the package and verifying the signature. In the end the company didn't resolve it.
So then I contacted american express again and they did not process a chargeback. They said it took too long, even though I had done as they asked. I was really fed up with it, and disappointed because I thought they were different. So I could not in good conscience continue with them and cancelled my card.
(I've actually had lots more positive results from visa before and since)
How many months, out of curiosity? The window for “goods and services not received” is surprisingly long (more than a year in some cases).
Fry: Do you take Visa? Cashier: Visa hasn't existed for 500 years Fry: American Express? Cashier: 600 years Fry: Discover? Cashier: Sorry, we don't take Discover
Dead Comment
Not all Amex cards have fees.
Also it would have been nice if the author went a little into the history like how Discover was once part of Sears. Not sure if this is still the case or not, but the classic Green, Gold, and Platinum cards are charge cards and have to be paid in full each month. Some of these things may explain why Amex is more affluent.
Airport lounges, concierge, exclusive books on Michelin star restaurants (also via Tock acquisition), etc.
They changed this a few years ago with the "pay over time" feature on those cards.
Honestly, not surprised. AXP/AMEX marketing team and superior customer service in the early days of the programs made it the top card to own amongst wealthy individuals.
The once coveted "black card" or Centurion product was invite only to existing card holders with the platinum card and met a certain annual spend criteria (some 6 figure amount). Card holders of this product paid some couple thousand dollar "initiation fee" and of course the annual fee. AXP got paid and then double dipped on the merchant side with even higher fees (the "no limit" cards charge a higher transaction fee).
Its exclusivity and hype has died down, especially when it started to issue centurion for businesses. Very easy to hit the required spend limit and use it as a weird flex at your next dinner party or restaurant outing with friends/family.
Honestly, if it wasn't for the centurion product. AXP would just be another credit card company and credit card network out in the wild (maybe it would have just been like "Diner's Club")
Went to a dinner with some of my gfs friends and her in NYC recently during my latest trip to the US (they work for Amex apparently). At the end of the dinner they suggested we all just pay separately because it is more simple. It confused me but I didn't mind. I understood it when the waiter held down a silverplate for us to put our credit cards on, and they pulled out their gold and platinum cards respectively, my gf also followed with her platinum card.
Then there was me, the only Europoorean at the table, and I put my regular card with a picture of a small kitten on the plate. The waiter complimented me on my card with a smile and I kinda cherish that. American flexes are weird to me, lol.
I don't really get it, except for the access to airport lounges with free food/drinks, if you do fly a lot.
A true German would have put down cash, and seen that as a flex perhaps. (Or at least would have done so in the past. I haven't lived there in a while.)
Doing something out-of-context also reminds me how the English put each other firmly into their class system by their accents. So how / where you grew up will follow you around your whole life and colour your interactions.
However, if you come in with a foreign accent--say German-- that overrides this clue, so it's easier for you to interact with both working class and upper class people with less weirdness than the natives have to endure.
As for why, for me and a lot of people, it is the points/cash back. Since European fees are capped, there isn't much opportunity for credit cards to bribe customers with perks. I make about 4% back on my credit card spending and pay off my balance every month, so no interest payments. I imagine people living in NYC are probably making 6 figure incomes, so the amount of points/cashback would be a lot more than the annual fees. Then of course you also get lounge/hotel/ etc. benefits.
and now I want to know which card...!
it even made it into pop culture, Ariana Grande's song 7 Rings has the lines
Black card is my business card The way it be settin' the tone for me I don't mean to brag, but I be like, "Put it in the bag,"
but yeah the US Amex platinum has most or better perks than the Centurion now
I credit my first AMEX with helping to keep my spending in-check when I started high-paying jobs because I always had in the back of my mind that the balance had to be paid-in-full. Take a lavish vacation? Make sure you have the savings to pay it off. In the end it was always paid off monthly.
Like you said, it required the habits or else they'd close your card, so it enforced better habits. Also the charge-cards don't impact your spending in your credit report, so it definitely helps the holder's credit score.
As a consumer who got in trouble during the 2008 depression, I will note that Discover is less forgiving, and quicker to sell your debt to debt collectors than any other bank.
My take is to avoid both as a consumer, if you can.
We got Amex after that, since it means if we ever have a true theft/card skim issue, chances are high they will back us, instead of putting the debt on us. If that ever changes, I'll ditch them. The small shops might not take them, but every gas station does, and I rather not pump gas with my debit card.
Putting aside whether the points & benefits value are the best in the business anymore (I think they all got a lot worse post ZIRP)..
Amex gets the majority of my spend because they are cardholder friendly and easy to deal with. I never spend time in opaque phone trees, waiting for callbacks, on hold or having to argue/escalate any issue.
Their website is good, their phone support is good, and I feel protected using the card vs having to deal with some random issuer of a branded Visa / big dumb bank / etc.
EDIT: I was unaware of all the below listed advantages for using credit cards, especially about % cash-back opportunities, no idea if my bank also supports something alike. Anyway, thanks, I have to investigate/rethink how I pay from now on.
EDIT2: I just learned my country does not support cashbacks, not in any one of the banks.
Discover does lots of subprime lending so that makes sense, sell the debt off quickly to get the most pennies per dollar for the bad debt.
I think you mean 15?
> Discover is less forgiving,
> My take is to avoid both as a consumer, if you can.
These don't seem like equal complaints. I would recommend Amex if you are a high-spender and pay your bills on time every month. They have way better customer service and perks.
Even some larger ones. I keep getting emails from Ebay saying they're not going to accept Amex soon.
The conclusions of this analysis match my own personal experiences discovering that friends and others I had success with in business were also Amex cardholders. Amex cardholders are generally more affluent and better at understanding and handling their own finances compared to cardholders of other brands. I chalk that up mostly to Amex being more selective about who they issue cards to.
As an investor that means there's a lower risk (or higher risk adjusted return) for every dollar Amex holds on its books compared to other card issuing lenders.
I say this as a generic green card member of 25 years. I know a lot of people pay for higher tiers for travel benefits, but the base service has been excellent for my needs.
All credit cards provide this, though. Certainly not all will have exemplary customer service but I have a Chase card I've successfully disrupted transactions through as well.
Also, are most Europeans financially illiterate and poor since they aren't AmEx customers and have general disdain for the debt-driven economy of credit cards?
I'm in no way associated to AmEx other than being a customer. I'm a frequent traveler and formerly digital nomad (78 countries and counting), and so have had many opportunities to see the benefit of my card. I've even mentioned one particular instance before on HN: https://news.ycombinator.com/item?id=36624867 Since HN skews towards people who work in the tech industry, I imagine I am not alone in that many of us are likely folks who both travel often and have an AmEx.
I didn't say anything about Europeans, and I didn't say people who don't have an Amex are financially illiterate or poor, I said the folks who Amex has as customers are affluent and better at handling their finances (read: better at paying off their debts). This is reflected in the data, including what is shared in the post. It's not at all a controversial statement, and espousing the positive side of that coin does not indicate in any way that I believe or hold the views from the other side of the coin.
A charge card means that if you decide to put $10k on the card to buy a new big thing, you need to have 10k to pay it off at the end of the month.
That would logically self-select for people who have the financial ability to pay off a card that has an 'unlimited limit'. As the card levels go up, you've also got hefty fees ($500+) which again select for people who view $500 as a small price compared to the benefits.
I think the OP was rational in their conclusion. Sidenote, it also has nothing to do with 'debt fueled economy' -- there's no debt accrued with charge cards.
As they made no money from balances carried, they have traditionally had higher merchant fees and annual fees for cardholders. The flip side, for the merchant, is that wealthy American cardholders vastly prefer using AmEx, so if those are part of your target market, you are much better off accepting it.
Clearly US & ROW card markets are wildly different due to various regulations; the structure of the US market and related incentives are pretty unusual. A statement about a US-based experience doesn't & can't translate toe Europe.
It took me a decade or so to get over my grudge against whatever algorithm triggered that, but I have an Amex card again.
https://www.theverge.com/2024/6/6/24173108/ebay-american-exp...
https://www.americanexpress.com/en-us/newsroom/articles/comp...