AmEx refers to the American Express card. It is an electronic payment card. A customer purchases using an American Express card, and the transaction takes place directly with American Express. Yet, there are places that don’t accept Amex.
Why Use American Express?
American Express is not acceptable in all places, but yet it is popular among the customers. Amex credit cards feature incredible rewards. You can earn points and acquire great rewards such as hotel stays and free flights. Based on the spending habits, use it wisely.
It is up to each merchant to accept Amex. Most times, paying a higher fee is not helpful. It is because the merchant’s clients are not the users of Amex. Besides, they are unable to earn profit from Amex cardholders. However, some small businesses benefit from accepting Amex cards, depending on clientele and prices.
Why do many retailers deny accepting American Express?
Merchants are expected to pay a fee to credit card companies to accept any type of credit card. Merchants offer this service as it is favorable to their customers and promote their business. However, for every transaction on a credit card, they pay the credit card issuer an interchange fee, and it costs them money. All credit cards charge fees, but the same is not charged by all the issuers. Thus, merchants choose credit cards that they wish to accept. The varying fees make or break a merchant deal. Small businesses say American express is not accepted. The reason is the interchange fee is high.
Regularly, Mastercard and Visa providers charge around 1.5% to 2.5%, and the charges of Amex merchants are between 2.5% to 3.5%. The percentage fluctuates, yet American Express charges more than 2.5%. The difference of 2.5% and 3.5% is small. Yet, in comparison to others charging lesser, the smaller businesses face difficulty. It is a financial strain on small businesses. The extra 1% to 2% for small businesses is not worth spending, as they may or may not gain profit in their business. In fact, even large retailers making hundreds of thousands of dollars could lose money from paying Amex fees.
Businesses consider different factors in deciding to accept American Express or not. The decision lies in the business size, the per day number of transactions, and its markups. As merchants give up American Express, they depend on their customers to pay through some other way; it may be by debit card, Visa, or cash.
Why is Amex not accepted?
A big question is why is Amex not accepted by everyone. The reason basically is its interchange fees charges. These fees refer to the percentage to be paid on each credit card transaction to the payment network. The fee of Amex is higher relatively. It is the reason some merchants do not accept the Amex card, then pay higher fees.
American Express is charging higher fees as per its business model from Mastercard and Visa. American Express earns interest income, though many of its products generate interest. However, each month, the company expects the cardholders to pay in full. Besides, the annual fees of American express is high and are suitable for an affluent client base.
There are surprising places that don’t accept Amex. However, bear in mind to look for appropriate information to know who accepts Amex. It is the only indicative factor; yet check if the information is up-to-date. It is a must to check directly with retailers before purchasing, to be safe from embarrassment.
Also Read – disadvantages of cash discount merchant services
Hints to choose the right card
- Acquiring a credit card is an exciting step, especially the first card. The crucial part is to ensure the credit card and the features stay in alignment with your habits of spending. If you spend at the grocery store a lot, consider looking for a cashback credit card offering extra grocery store rewards. A card that does not enhance your spending will be a burden.
- Ensure, if you are ready for rewards credit card or not. Start with a credit card providing more security in the credit spending. However, put in a security deposit so that it serves as collateral and credit line, in case you miss the payments.
- Compare the APR and Annual fee of each credit card. Though you cannot get credit cards with zero fees, there are some charging high annual fees. Decide whether the perks and rewards that the cards offer are worth spending. Re-consider the interest rates of the card. Without fail, pay the bill on time and in full to avoid shelling more on interest. Thus, reduce the bite and enjoy a lower APR on credit cards.
American Express is making strides to promoting merchants to accept its cards. However, to avoid any hassle, ask before shopping and verify the details. Knowing in advance American express not accepted or accepted before is helpful.
Also Read – What Credit and Debit Card Program Can I take with a Cash Discount Program?
