Many people don’t know (although this is probably different in Quora’s community) that credit card companies make money with every transaction you make with the card.They are intermediaries between the issuer (the bank), the purchaser (dealer bank), the trader and the consumer (you).
They are their own bank
This has many advantages for you as a consumer.Let’s take an example where you buy a beer in a bar, and the retailer (the bar) charges you 2 or 10 beers instead.
If you have paid with a Mastercard or a visa, call the bank to pay this fee.They will transfer you a few times (based on personal experience) and try to charge the merchant or credit card company until someone freezes these fees.
Compare this to AMEX, which is able to take over your site immediately with the privilege of being your own bank and immediately refund or credit you with this fee while they get the matter done.
Another reason why they can offer such good customer service is the
2.You charge higher discount fees
Below, Rakesh Agrawal joked that he preferred merchants to pay more.In reality, this is an excellent argument for why AMEX is so great. Have you ever noticed that some places don’t accept American Express? – This is because AMEX will charge the merchant about 3-4% of the purchase amount each time you cover your card. For a transaction valued at USD 100, the trader will receive USD 97 and AMEX USD 3. The acceptance of AMEX is very expensive, compared to 1-2% for VISA and Mastercard.
However, let’s think about what this means for you as a consumer: every time another customer steals a VISA or pays with cash, they subsidize your purchase.If someone pays cash, they pay 100 US dollars of a 100-dollar item. If you pay with your AMEX, you will pay a fee of 97 dollars. Sure, you’ll still be credited to your card, but you’ll get this ‘3 back in the path of better customer service, better reward programs, and additional benefits. Which brings me to my third argument:
3.They have excellent reward programs and additional benefits
Did you know that with AMEX you can buy any item (everything!) Can buy up to USD 10,000 worth of stolen, damaged, lost or otherwise ruined, does AMEX buy you back exactly the same item?This is called American Express – purchase protection – and is just ONE of the many benefits American Express offers its customers.
I don’t know all the details of every single card (I use SPG and Delta myself because I travel a lot), but I can almost assume that their reward programs will at least match the other offers there.
Using an AMEX is less of a prestige or luxury decision.It’s incredibly smart when you stop thinking about your business model and what that means for consumers. Many of us are very loyal to AMEX for their incredibly helpful customer service, but the reality is that they can offer these things as a company because of their different strategy. Hope that helped!