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American Express credit cards

Tom Martin
Written by Tom Martin, Content editor

19 December 2018

What is Amex or American Express? How do they differ from Visa and MasterCard credit cards?
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American Express credit cards
American Express credit cards

American Express credit cards, or Amex cards, may not be as well known or as well used as other credit cards in the UK, but they are still popular. So what are the pros and cons of American Express, and why Use American Express cards to shop and spend?

American Express credit cards

Compare American Express credit cards and other airline cards that reward you when you spend.

American Express credit cards

Debit and credit transactions in the UK are dominated by MasterCard and Visa, so what is American Express and should you consider an American Express card?

The history of American Express

Historically American Express was associated with wealthy customers, but the business has morphed into providing all sorts of cashback, Air Miles and extras with its cards.

For customers, the American Express advantages include great perks and in some cases, high spending limits. The drawback is that some retailers are less keen on accepting an Amex card because of the higher cost.

The majority of our everyday financial transactions happen via banks, but there has to be a financial organisation to bridge the gap between the payment you make, whether it be online or on the high-street, and the banks receiving and sending your money.

That’s where payment networks, the biggest of which are Visa and MasterCard, come in. Visa and MasterCard are the networks that process your payments, but they don’t issue your debit and credit cards. These cards are issued via banks and other lenders and financial services companies.

American Express is a little different in that they issue their own cards, they finance the payments you make, and they process the transfers.

They charge you interest or fees to do this, and will charge retailers a fee to process their payments. While Visa and MasterCard charge merchants between 1.5% and 2.5% per transaction, American Express charges between 2.5% and 3.5%. This is why merchants, particularly small businesses, may not accept an Amex charge for payment.

The advantages of American Express

American Express used to be a statement of luxury, offering its big-spenders extremely high credit limits and allowing them access to exclusive events and circles.

For instance, the famous American Express Centurion card, commonly referred to as the Amex Black Card, is an invitation-only credit card that costs £1,000s of pounds a year in fees.

In return members are enrolled in prestigious airport lounges and car rental gold clubs, as well as personal shoppers at high-end shops and complimentary companion air tickets.

American Express has now expanded into other segments of the credit card market and caters to a wider variety of customers. For example, the no-fee American Express credit cards offer cashback on shopping, or Air Miles for every amount spent. They also often offer higher tier customers extras like travel and car insurance.

If you want to understand how a credit card works, read our guide What is a credit card?

Why use American Express?

American Express also has a reputation of offering high-quality customer service should you need it.

The best American Express cards currently available offer up to 5% cash back on purchases, as well as Nectar points and Air Miles. Such cashback schemes are typically limited to an introductory period, or require a minimum annual or monthly spend in order to qualify.

Some other American Express cards are linked to particular airlines or retailers. American Express also offers charge cards, whereby any spending has to be paid off in full at the end of the month to avoid charges or fees.

If you are unsure that you want to use an Amex card, but you like the idea of premium cards, you can check out the other options with our Guide to Premium credit cards.

American Express credit cards - card close up

The disadvantages of American Express

The main disadvantage of an American Express card is the cost – not to you, but to the businesses it processes the payments for.

Unlike Visa or MasterCard, American Express operates its own network, which means it charges vendors an additional fee to use the card.

That means that you won’t be able to use your American Express card everywhere. In particular, smaller retailers will decline an American Express card, and if you’re buying anything online with it, you may be charged extra, so take that into account when looking at the rewards.

American Express cards that offer nice extras, like cashback or Air Miles, also tend to have limits on the offers. For instance, the cashback offers may be limited in time, or you only receive your Air Miles if you spend a minimum amount.

While this is fine in principle it means that it can also be very easy to miss out on rewards if you miscalculate, although the same is true for all rewards cards.

What’s more, if the offers are time-limited the card simply becomes a standard credit card after that offer expires. As these reward cards often have high interest rates it makes the card potentially expensive to use after the offer expires.

American Express credit cards

Compare American Express credit cards and other airline cards that reward you when you spend.

What are the pros and cons of Amex?

Pros: Amex offers perks, rewards and special deals which may be particularly useful if you travel frequently on business, or if you need a card that allows you a high spending limit.

Cons: Not all retailers accept Amex cards. Watch out for high interest rates and fees and make sure you are using the perks that you are paying for.

If you are not sure you will make the most of the perks available from an American Express credit card you could use the Uswitch comparison tool to find the best deals on other Credit cards.

If you are unsure as to which card you might want to apply for, you can use our Credit card eligibility checker.

MasterCard issues many of the credit cards in the UK. You can compare MasterCard credit cards with our Uswitch comparison tool.

How to use American Express credit cards

The key to using American Express, like any other credit card, is to use it sensibly, paying off your debts, and taking advantage of the extra offers and features.

For example, you may be offered a credit card from American Express with extra car insurance cover and access to member’s clubs, but if you already have car insurance for the year, or if you don’t travel much and are unlikely to take advantage of special member’s clubs, then the extra cost may render an American Express a more expensive option.

Likewise, if the card offers you Air Miles contingent on a minimum spend you should make sure you adjust your spending to take advantage of the offer.

When you receive your introductory offer, consider carefully if you want to, or need to, keep the card.

Finally, like all credit cards make sure you pay off the balance in full within the interest free period to avoid sky-high fees.

Amex and other cashback or reward cards tend to have high interest rates and fees which is how they make their money.

If you fail to clear your balance and end up paying interest it could quickly wipe out the financial advantage of having the card in the first place.

Other bonus cards

Amex is by no means the only provider to offer cashback, rewards or other incentives. There are a huge range of both debit and credit Visa and MasterCard offerings from a range of high-street banks that offer similar rewards.

For more you can take a look at our best reward credit cards page or our cashback credit cards to see our full table of great deals and offers.

If you’re planning on covering the minimum repayments by setting up a Direct Debit payment for example, as you should, then the interest rate shouldn’t worry you too much. Rather, focus on the rewards on offer and whether they fit with your usual habits or spending patterns.

Use our comparison tool to Compare Visa Credit cards

Gold American Express Cards

The American Express Gold card credit card gives perks and rewards that are designed to appeal to travellers. It offers extra points on American Express Travel purchases and travel booked directly from airlines, and complimentary passes to airport lounges. However, it comes with hefty charges: an annual fee of £140 (although this is waived in the first year), and an APR (annual percentage rate) of 59.9% variable ( 24.5% variable for purchases). This is much higher than a traditional credit card interest rate, so be sure you are going to make the most of the card's perks if you are going to take out an American Express Gold card.

Find out more about APR and how it works with our guide: What is APR?

Platinum American Express Cards

The American Express Platinum card credit card is a prestigious credit card made of metal with no spending limit and a range of benefits. Unlike many other credit cards, you must pay your balance off in full each month. The card carries an annual fee of £575 and you get membership points for every pound you spend and redeem with a range of shopping, travel and lifestyle partners. It also gives you complimentary access to over 1,400 airport lounges across more than 140 countries worldwide, worldwide family travel insurance, and cashback on purchases at Harvey Nichols.

Find out more about Premium Credit cards

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