[Finance] WTF American Express?

[Hamilton]

Air is free

Clean air isn’t.

 

[Harry Wilson's tackle]

I too pay off my Amex every month - it’s got a massive APR and is useful only for racking up Avios, discounts at the Amex stadium, and biffing things I want to buy into the following month’s paycheque.

No idea how American Express make all that much money charging interest, if most customers are like us.

I'm charged a monthly fee for my credit card, but it earns 'points' which means £ that far outweigh the fee. So my credit card company has never made a penny out of me in 20 years, and has in fact paid me to use it. Presumably they get some commission on what we buy?

 

[Harry Wilson's tackle]

Air is free

 

[Harry Wilson's tackle]

If you pay your credit card off in full every month you get up to several weeks of free credit.

Preciely. I used to live a month in the future because I needed to. These days it is because I can.

 

[Bozza]

I'm charged a monthly fee for my credit card, but it earns 'points' which means £ that far outweigh the fee. So my credit card company has never made a penny out of me in 20 years, and has in fact paid me to use it. Presumably they get some commission on what we buy?

Amex take between 1-3% of every purchase you make - it's a VERY lucrative business.

 

[Harry Wilson's tackle]

Amex take between 1-3% of every purchase you make - it's a VERY lucrative business.

I see.

I don't have an Amex card. Is it worthwhile? I'm not a strategic shopper. Happy with the small dividend from keeping my Santander Mastercard (recommended by moneysupermarketsaving bloke.com) curated.

 

[Herr Tubthumper]

I briefly had a corporate AMEX card way back in the early 00s. I remember it was quite difficult to find places to accept it back then. I found this odd.

 

[dazzer6666]

I briefly had a corporate AMEX card way back in the early 00s. I remember it was quite difficult to find places to accept it back then. I found this odd.

Their charges (to most retailers) used to be much higher than Visa/MC (c4% compared to 1-1.5%) so businesses simply didn’t sign up to accept it. They negotiated individual deals with very large firms (inc airlines and hotels) so were more use as a corporate card - I had one then too, it was virtually useless in restaurants etc.

 

[Publius Ovidius]

View attachment 171878

To be fair that is gods own air from gods own county, so £99 is actually cheap

 

[Herr Tubthumper]

Their charges (to most retailers) used to be much higher than Visa/MC (c4% compared to 1-1.5%) so businesses simply didn’t sign up to accept it. They negotiated individual deals with very large firms (inc airlines and hotels) so were more use as a corporate card - I had one then too, it was virtually useless in restaurants etc.

This makes sense. My hotels and flights were always booked by my company PA direct so I wouldn’t use it for these…which just left car hire and restaurants and day-2-day sundry stuff which usually drew a blank.

 

[mikeyjh]

So literally the right answer. I used to work for them in printing and I once queried why debt letters were being sent out, chasing debt that was less than the cost of printing and sending the letter chasing it.

I did suggest we could easily apply code to not send a letter if the debt was less than x, but was told no.

It's culturally a very conservative organisation, one of the reasons it's so popular with investors. As long as revenue grows as those investors may expect and expenses don't follow suit then the status quo is achieved. It's also why it becomes a little bloated and when those revenues dry up, then the cuts hit hard. It took me a long time to figure out that talking to finance leaders about automation and about AI could do a lot of what their anaylsts did was a waste of breath. Frustrating but there you go....

Of course it could be that someone looked in to it and figured out the cost of applying a bit of code > than the reduced expense but I doubt it.