Reviewed by Sep 30, 2020| Updated on
American Express cards are either credit cards or charge cards issued by the publicly-traded financial services company—American Express. These cards are also referred to as AmEx cards and are quite unique in the way they operate.
While banks process most of the transactions, not every part of the process is controlled by the banks. Payment companies, such as Mastercard, Rupay, and Visa help banks in managing the transactions between the seller and the banks.
On the contrary, American Express issues their own cards to individuals, corporate consumers, and small businesses. Also, the transactions are completely controlled and managed by American Express.
However, the transactions processed by the financial service company, i.e. American Express, attracts a service charge from both the card owner and the seller. The company generates substantial revenue from this service.
Eligible individuals can avail both debit and credit cards from American Express. The company also offers individuals with charge cards, which make them eligible for a monthly credit. However, the cardholders are required to clear the card balances each month. Failure to do so can attract interest on the balances.
American Express cards are known for the wide range of benefits that come with it. They also offer reward points on the transactions, which can later be converted to flier miles.
AmEx partners up with other financial institutions to come up with attractive offers and rewards in a move to woo customers and avail their services.
One disadvantage of AmEx cards is that they charge both the seller and the buyer for processing a transaction. Since they do not rely on financial companies, such as Rupay, Mastercard or Visa, and have their own payment network, they charge additional fees on the transactions. This is one of the primary reasons, small businesses generally do not accept these cards.
The perks these cards offer last only during a specific time period. The benefits offered as introductory offers tend to expire once that period of time is over.