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Why Discover is no American Express
- Havoc 2y agoThat chart about amex winning on deliquencies rings true. UK side at least amex seems incredibly fussy about clients. They declined applications from two friends - both local equivalent of CPAs (and to my knowledge no major financial issues).
- glimshe 2y agoTheir models could be imperfect, but Amex is known for being pickier about their customers. This is not different from other companies, such as the insurer Amica. When in doubt, don't take the customer.
- mikepurvis 2y agoIt must be tough being only a credit card and not also a person's bank— there's just way less info to go on about their financial practices.
- inkyoto 2y agoThe main product of AMEX is not a credit card. It is a charge card which sets them apart from the credit card business and brings a higher yield to AMEX, the business.
- margalabargala 2y agoThe main product of AMEX is access to its cardholders. Because they are picky about who receives their card, an amex cardholder is likely to spend more than a cardholder of another network. This is why businesses accept amex despite the much higher merchant fees; the higher spending by the cardholders means that businesses accepting amex tend to come out ahead anyway, by virtue of selling more to amex cardholders.
- apple4ever 2y agoWell it's not perfect because they didn't accept me and I spend a great deal but always pay my debts.
- Havoc 2y agoDunno about others but for me the vast majority of tx do go through the card. But yeah I guess they’re blind to stuff like rent and cash bal on hand.
- CoastalCoder 2y agoI didn't realize Amica is especially picky. But I guess it makes sense. Their customer service and claims handling has been outstanding. That's probably easier with a more trustworthy (or less risky) clientele.
- anthonypasq 2y agomy dad has worked there for 35 years, and as far as i know, they only used to operate off referrals, it wasnt even open to the public
- CoastalCoder 2y agoThat's how my wife and I got in, years ago. I actually had assumed it was a myth created by their advertising department. Interesting to learn it was (is?) true.
- Havoc 2y agoCertainly not as picky as some of the fancy cards but yeah they def reject uni educated people with stable income
- mise_en_place 2y agoNot sure if it's ever been made official, but I'm pretty sure they look to see if your parents or close family have had an existing long term relationship with them. That's how I was able to qualify for Platinum, even though my credit score wasn't the greatest at the time.
- Havoc 2y agoThey definitely look at corporate cards. I got a personal one with literally zero credit history or even 1st world financial paper trail. Except for a bottom tier corporate card with rather light sporadic use. That was apparently enough substance
- apple4ever 2y agoYup big reason I have a Discover and not AmEx. I do not have the best credit, but mostly because I carry balances. Yet I've never missed a payment in nearly 25 years (since being in college) and that was with Discover. I have the same account since then. But AmEx would never accept me.
- tristor 2y agoI have been an Amex card holder for nearly 30 years. It's one of the few brands I have real loyalty to because they've saved my bacon so many times while traveling and in other ways. The conclusions of this analysis match my own personal experiences discovering that friends and others I had success with in business were also Amex cardholders. Amex cardholders are generally more affluent and better at understanding and handling their own finances compared to cardholders of other brands. I chalk that up mostly to Amex being more selective about who they issue cards to. As an investor that means there's a lower risk (or higher risk adjusted return) for every dollar Amex holds on its books compared to other card issuing lenders.
- snide 2y agoAlso have a fierce loyalty to AmEx as a customer. I use it as often as I can to pay for things. Their customer services is phenomenal, and its nice to have an arbiter between you and a merchant when things come up. Anytime I've had an issue with a merchant, I try to work with them first, and then jump to Amex if they aren't willing to work with me. In every instance Amex has been able to fix the problem, typically by refusing payment to the vendor after an investigation. It's like having insurance for your purchases. I say this as a generic green card member of 25 years. I know a lot of people pay for higher tiers for travel benefits, but the base service has been excellent for my needs.
- afavour 2y ago> It's like having insurance for your purchases. All credit cards provide this, though. Certainly not all will have exemplary customer service but I have a Chase card I've successfully disrupted transactions through as well.
- radicaldreamer 2y agoApple Card's service is terrible, have heard of multiple people denied a chargeback for obvious fraud or services not provided. I only use it for specific Apple purchases and Apple Pay for consumable goods now.
- surfingdino 2y agoAmex has been constantly loosing merchants in the UK. Most recent case is eBay no longer accepting it.
- hnbad 2y agoI'm in Germany and I've never seen any signs anywhere indicating Amex is accepted, only Visa, MasterCard and Meastro/GiroCard/EC/whatever.
- paxys 2y agoThose signs are generally outdated. I've had cashiers tell me they don't take Amex, and when I tell them to try and run it regardless it almost always ends up working. PoS systems have evolved a lot in the last decade.
- rjmunro 2y agoI once had a conversation with a merchant about not taking AmEx. He told me they could take it, their machine and merchant accounts were all set up, but instead of getting paid [whatever they charged] - [small percentage merchant fee] relatively quickly, they were sent a bill for AmEx fees that was almost impossible to correlate with sales. AmEx only paid them for the sales later. AmEx are 'better' for customers because they screw the merchants over.
- AdamN 2y agoThese days most merchants are large or small and just use Square or some POS where they don't even know what's happening so not sure this is really an issue anymore.
- hnbad 2y agoI've had cashiers in Germany balk at my debit card because it says "Visa" on it and tell me "we only take EC" or sometimes even "we only take EC or Maestro". The joke is of course that EC hasn't existed since 2007 (when it was renamed to "girocard") and Maestro was discontinued by MasterCard, which is why many German banks replaced Maestro debit cards with Visa debit cards. I wouldn't rely on cashiers to know more than just whether they take debit or credit.
- Bluecobra 2y ago> Moreover, Discover cards come with no annual fees, while American Express keeps increasing its card fees with every card “refresh”. Not all Amex cards have fees. Also it would have been nice if the author went a little into the history like how Discover was once part of Sears. Not sure if this is still the case or not, but the classic Green, Gold, and Platinum cards are charge cards and have to be paid in full each month. Some of these things may explain why Amex is more affluent.
- makestuff 2y ago> Not sure if this is still the case or not, but the classic Green, Gold, and Platinum cards are charge cards and have to be paid in full each month. They changed this a few years ago with the "pay over time" feature on those cards.
- jjice 2y agoTo add to this as well, this can be disabled, but it's on by default for new applicants. They can put a limit on the charge cards as well, so it can be almost an ambiguously limited credit card now. That said, I don't think being given a set limit is very common, or very impactful for the average person unless you're a large spender.
- Dalewyn 2y agoNot all charges can be PoT'd, though. In general you still have to pay the entire statement balance each billing cycle (it's a good habit to have when using credit cards anyway).
- blitzar 2y agoMy one changed from charge card to interest bearing - it is now 704.6% interest rate, so it is still a charge card!
- quickthrowman 2y agoWhat country is that in?
- jvanderbot 2y agoI had a discover card for a long time. It had amazing cash-back benefits, low interest rate, and no annual fee. Bad for business, but really great card! We went to Amex exclusively for the flight rewards with Delta, even copping the annual fee b/c it paid back in travel rewards (we travel often for work / fun).
- ryandrake 2y agoI've had the Blue Delta Amex card for 20 years as my "daily driver" but recently concluded that the miles benefit was just not sufficient vs. a different card that gave cash back. It takes years and years of purchases to build up enough miles to redeem for even a single domestic trip. Ultimately not worth it unless you're augmenting it with regular paid-travel and/or use a card with a yearly fee. I will keep it around for "risky" transactions though, where I believe I may have to issue a chargeback, since Amex is very customer-friendly when it comes to chargebacks.
- AaronM 2y agoIMO, Discover's web and mobile application is better than AMEX.
- paxys 2y agoThe TL;DR is that AmEx targets ultra high spenders and corporations, while Discover is generally considered low end (and has the highest delinquency rates to show for it).
- bell-cot 2y agoFor those unfamiliar - historically*, American Express was the card of the well-connected and well-to-do. And at least statistically, that's still the case. So between how well AmEx treats it's "members", and their awareness of the social status - AmEx's business model has a pretty good moat. *Meaning back to the late 1950's. Things get very different if you look at the century before that.
- Dalewyn 2y agoWhile I have a Visa just in case (AMEX isn't accepted everywhere), I nonetheless have disdain for Visa and Mastercard (I don't have the latter). AMEX doesn't care what I'm spending on so long as it's legal (obviously) and it's actually me doing the spending. Visa/Mastercard care far too much about how I spend money, which is frankly none of their business so long as I properly pay the bills (which I do). AMEX is in the business of moving money between customer and merchant and performs their job exceptionally, so I'll always use them over Visa/Mastercard when possible.
- rconti 2y agoI had weird issues in South America where (say) Visa was accepted, but MasterCard wasn't. As a(n) (North-)American, i've always considered the 2 as precisely equal because the processors that handle one always seem to handle the other. The only question is only ever whether Amex or Discover is accepted.
- nottorp 2y agoYou mean pornhub can still take Amex? I thought Visa and MC banned it.
- Dalewyn 2y agoNo clue about Pornhub, but as someone who frequently shops at Japanese online stores I know places like DMM stopped taking Visa/Mastercard (because of their nanny bullshittery) while they still take AMEX like they always did. That whole fiasco vindicated my loyalty to AMEX: So long as the transaction is legal and authorized and ultimately paid for, they really do not care how an AMEX cardholder spends because it's none of their business.
- lmm 2y agoA number of Japanese sellers have been blocked from Visa/MC but still take Amex and Discover/JCB. DLSite changed a bunch of category names, which would suggest that those were the things Visa/MC were blocking, although given that they still ended up cut off, who knows.
- tiffanyh 2y agoJerry Seinfeld / American Express ad: https://www.youtube.com/watch?v=ufDslAOkZ50 https://www.youtube.com/watch?v=ufDslAOkZ50
- eloisant 2y agoI don't understand that ad, why would anyone care about doing exactly 20?
- tiffanyh 2y agoUsing credit cards was not the norm in the 80s/90s, using cash was. And no one wanted to get the dreaded 99 pennies back if you could avoid it. Using credit cards meant you didn't have to worry about pennies anymore.
- BenjiWiebe 2y ago3 quarters, 2 dimes and 4 pennies. Still plenty, but not as bad as 99 pennies. Or you could give them a penny and get a dollar back, but that might confuse the cashier.
- xyst 2y agobecause of change. US currency offered in 1, 5, 10, 20, 50, 100 denominations. $20 bill being the most common bill that people carried.
- saghm 2y agoWhen I was a kid, I remember my parents used to try to pay for everything with their Discover card and would only use their Visa as a fallback. I was too young to understand the differences between credit cards at the time, but I remembered my parents always asking "do you take Discover?" everywhere we went. I never realized this wasn't just something only my parents did until I saw the Futurama joke about this years later: https://www.youtube.com/watch?v=2-nSwKOVZyk https://www.youtube.com/watch?v=2-nSwKOVZyk Fry: Do you take Visa? Cashier: Visa hasn't existed for 500 years Fry: American Express? Cashier: 600 years Fry: Discover? Cashier: Sorry, we don't take Discover
- HaZeust 2y agoGreat gag, and I'm still in my depths of that practice. Luckily, about 80%+ of the places I ask take Discover.
- robertlagrant 2y agoI clicked on the comment section ready to make this same reference. Such a good joke.
- throwawaydummy 2y ago[flagged]
- dudeinhawaii 2y agoI wonder if the AMEX cards historically being "charge cards", which have to be paid in-full at the end of the month, encouraged healthy habits and better credit scores. I credit my first AMEX with helping to keep my spending in-check when I started high-paying jobs because I always had in the back of my mind that the balance had to be paid-in-full. Take a lavish vacation? Make sure you have the savings to pay it off. In the end it was always paid off monthly.
- JoshGlazebrook 2y agoThe charge cards don't even have to be paid in full anymore. They offer "pay over time" for charges on platinum/gold/green/etc which effectively makes them credit cards.
- vineyardmike 2y ago> encouraged healthy habits and better credit scores. Like you said, it required the habits or else they'd close your card, so it enforced better habits. Also the charge-cards don't impact your spending in your credit report, so it definitely helps the holder's credit score.
- HaZeust 2y agoThe productivity in my life for my AMEX Platinum card is directly inversely proportional with how much traveling I do. If I'm having an off-year for traveling, it's pretty much nothing more than weight in my pocket. Discover IT was used to start my credit-building journey a year ago, and helped me reach a 740 credit score in 12 months after having 3 total credit accounts (Discover IT, Apple Card, Amex Plat) and 1 installment account (car loan). My bias between the two is clear.
- avgDev 2y agoI hate AMEX platinum now, it is an overpriced card. For me, Venture X is a much better card. Cheaper, much better travel portal with PRICE MATCHING, widely accepted in EU, PRIMARY car rental insurance up to $75k.
- HaZeust 2y agoI was reckoning about Venture X, what are the catches you've found in your use of one?
- avgDev 2y agoI've had the card for a few months now, and will be cancelling Amex Platinum next time fee hits. The only "catch" is that to get most benefit you have to use their travel portal. Also, the points have to be redeemed towards travel purchases. Other than that I did not have any problem at all. All-Inclusive resorts are kind of lacking last time I searched their portal.
- HaZeust 2y agoWill look into pre-approval, thank you!!
- colingoodman 2y agoThe AmEx platinum seems like a fancy coupon book full of credits I mostly wouldn’t use. Maybe if I cared about airport lounges more I would feel differently, but I agree with your sentiment. I have a hard time understanding the value prop of their charge cards.
- farceSpherule 2y agoAmerican Express sucks when you leave the United States, especially in Europe.
- mhalle 2y agoWhen I had my wallet stolen in London about a decade ago, Amex was far faster, easier, and friendlier replacing my credit card than was Citibank. Did it at an in-person Amex office.
- guidedlight 2y agoAs an Australian, I’ve never seen Discover cards. American Express has been largely replaced in Australia by Visa signature and Mastercard platinum cards that are more difficult for merchants to deny.
- menshiki 2y agoIn Japan/Taiwan they seem to be widely accepted. Most places in Japan that accept VISA/MC, also accept AmEx.
- xyst 2y ago> in 2023, Amex cardholders (U.S. consumers only) spent, on average, $13,945 per year, or almost 4 times more than Discover cardholders Honestly, not surprised. AXP/AMEX marketing team and superior customer service in the early days of the programs made it the top card to own amongst wealthy individuals. The once coveted "black card" or Centurion product was invite only to existing card holders with the platinum card and met a certain annual spend criteria (some 6 figure amount). Card holders of this product paid some couple thousand dollar "initiation fee" and of course the annual fee. AXP got paid and then double dipped on the merchant side with even higher fees (the "no limit" cards charge a higher transaction fee). Its exclusivity and hype has died down, especially when it started to issue centurion for businesses. Very easy to hit the required spend limit and use it as a weird flex at your next dinner party or restaurant outing with friends/family. Honestly, if it wasn't for the centurion product. AXP would just be another credit card company and credit card network out in the wild (maybe it would have just been like "Diner's Club")
- chasd00 2y ago>The once coveted "black card" or Centurion product it even made it into pop culture, Ariana Grande's song 7 Rings has the lines Black card is my business card The way it be settin' the tone for me I don't mean to brag, but I be like, "Put it in the bag,"
- yieldcrv 2y agothere have been r&b songs about this card since late aughts to my knowledge, when it was still mythical but yeah the US Amex platinum has most or better perks than the Centurion now
- dumbo-octopus 2y agoKanye did it better (and 15 years earlier): I went to the malls and I balled too hard "Oh my god, is that a black card?" I turned around and replied, "Why yes – but I prefer the term African American Express"
- sva_ 2y ago> use it as a weird flex at your next dinner party or restaurant outing with friends/family. Went to a dinner with some of my gfs friends and her in NYC recently during my latest trip to the US (they work for Amex apparently). At the end of the dinner they suggested we all just pay separately because it is more simple. It confused me but I didn't mind. I understood it when the waiter held down a silverplate for us to put our credit cards on, and they pulled out their gold and platinum cards respectively, my gf also followed with her platinum card. Then there was me, the only Europoorean at the table, and I put my regular card with a picture of a small kitten on the plate. The waiter complimented me on my card with a smile and I kinda cherish that. American flexes are weird to me, lol. I don't really get it, except for the access to airport lounges with free food/drinks, if you do fly a lot.
- CobrastanJorji 2y agoOne thing not discussed is the relationship between AmEx's big purchases and its fees. American Express puts a lot of effort into keeping its paying consumers happy because they are both American Express customers (because they pay fees) and because customers really want to use American Express cards at merchants (and so American Express can charge those merchants higher fees). I'll give you an example. Years ago, I bought a fancy sofa online. The merchant sent periodic "don't worry, we're just behind schedule" every week or so for months, and then sent one last email saying they had declared bankruptcy. I was way out of my chargeback window, but when I called American Express, they instantly refunded me my purchase anyway. That experience meant that, if I ever make another big purchase online, I will go out of my way to use an American Express card, including switching merchants if necessary. Keeping customers who make big purchases happy costs money, both in losses and in administrative overhead, but it pays out on both the customer and merchant side in the long run.
- stbenjam 2y agoAmEx was my first card, and I've stuck with them. Despite some decline, their customer service is still top-notch. I always put major purchases on there. Their Platinum travel insurance has been a lifesaver. When a volcano stranded us, AmEx covered our stay at the TWA hotel in JFK. Lost luggage? They reimbursed $400 in clothes, no questions asked. Disputes? I haven't had many but they were always resolved in my favor. I experimented with having a Chase card when they launched the Reserve. Europcar defrauded me, and Chase wouldn't even let me file a dispute. I eventually won by sending a written complaint (FCBA), but I ditched the card right after. Plenty of reports online suggest Chase discourages disputes heavily.
- singleshot_ 2y agoHere's a challenge for you, inspired by real life: contact Chase's legal department.
- bombcar 2y agoUsually suing in small claims court will work, somewhat. Sometimes.
- Rapzid 2y agoI'm about done with Amex. They overcorrected on lounge overcrowding and now I can't get my wife in free for my ever increasing yearly membership fee?
- deleted 2y ago[deleted]
- treyfitty 2y agoI worked at AmEx for many years. I hated every second of it- the culture, the work, the people, and management. Besides that, I hate to admit that they have a great product.
- menshiki 2y agoI'm quite curious about why you hated it so much.
- sholladay 2y agoAmex has consistently given me a much higher credit limit than everyone else. It’s not even close. My Amex card has a 3x higher limit than the next highest card, which is a tie between Amazon (Chase) and PayPal. For a long time, the gap was closer to 5x. This results in all large purchases going on Amex since I don’t want to destroy any card’s utilization ratio. And I think that’s a deliberate gamble they made that’s paying off for them. It probably only works because of the amount of data they collect. But it’s a good product otherwise, if you can use it responsibly.
- kccqzy 2y agoNot my experience at all. Two of my Chase cards each have credit limits above $25k. Amex still only $12k. And I've been a longer Amex cardholder than a Chase cardholder. And I don't care about utilization ratio: for credit scoring, only current utilization ratio has any effect not historical utilization ratio.
- sholladay 2y agoUse the “Check my spending power” feature. Type in $20k. You’ll almost certainly get a limit increase within a few days. Do it again in a few months. I bet you could get to $30k within a year.
- PrivateButts 2y agoI didn't have student loans (went to a cheap college and was fortunate enough to have parents that could foot the bill) and had not needed to borrow money from a bank until I had finally had a good job and wanted to replace my beater car that was on it's last legs with a decent used car. I struggled to get any loan for more than a year, until I learned that we had access to a credit union through my job. The whole time no credit card company wanted to touch me, except Discover, who gave me a card with a $200 limit. I'm still with them, now with a more reasonable credit limit, and it's the only card I have. Between that and seeing how much the 'age of accounts' penalty was dinging my otherwise good score really left a bad taste in my mouth. It feels like they want you to be in debt from birth. I guess that's why they want to feed us daycare loans as the new student loans.
- Dalewyn 2y ago>It feels like they want you to be in debt from birth. Not exactly. Banks want to figure out your financial riskiness, and in the absence of historical data they usually just assume the worst case scenario just short of ongoing bankruptcy. So just having an open credit card account that is many years or even decades old and in good standing goes a long way towards your credit score, regardless if you even put any spend on it. Inversely, if you have only have new credit cards the banks simply don't have much history to work with, and so you are scored lower. Trust ("credit"!) takes a lot of time to build.
- azinman2 2y agoMy understanding is Europe caps the interchange / card fees that credit card companies can charge merchants. I’d love to see something like this in the US; visa/mastercard/amex/discover basically are a constant source of inflation.
- n_ary 2y ago> My understanding is Europe caps the interchange / card fees that credit card companies can charge merchants. Not sure, how strongly this applies. I frequently get denied(verbal denial that Amex doesn't work, use something else!) when I pull out my Amex in stores(random Tedi/Lidl/Aldi but not all), so now I usually resolve to ApplyPay(cashier don't see the card and can't ask to use some other card). If it is actually denied by the machine, I use a different one, no harm done. One particular small cafe told me, Amex charges are too high and cost them more than Giro/Visa/MC. Some places are also very adament about using a "Debit" only Visa/MC/Giro!
- annexrichmond 2y agoInstead of a cap, I'd like to see merchants able to add interchange fee as a line item such that paying Cash, or whatever form of payment, and effectively let the consumer opt out CC fees.
- campl3r 2y agothat already frequently happens in small town stores. You may see two prices for each item (if items are labeled with prices) or just get a higher bill with an additional line item.
- darthrupert 2y agoCredit Card business is such a weird one. Especially cashbacks is a thing that just baffles me. Perhaps it shouldn't be legal to push costs to merchants in such a shady way.
- ktosobcy 2y agoUS credit and credit-card landscape baffles me AF :D I just have <some-plastic> (I think it's MC, couldn't be bothered which one is it) and just pay with it...
- ravedave5 2y agoAmex's reputation for backing the customer, means you don't even always need to go to them for help. My wife was dealing with a travel agent not wanting to issue a refund (when the listing specifically gave the refund window, and we were inside it). She was at her wits end and finally said, "ok I'll call Amex, the listing is clear and they'll do a chargeback", that caused them to get a manager on the line and our refund was processed immediately.
- bediger4000 2y agoI worked on credit card processing at a Visa Level 1 merchant, 2001-2003. Amex was far more difficult to handle than any other type of card. 13 digits in a card number, 4-digit CVV, other weird problems that other card types didn't have. Small businesses dislike taking Amex because the per-transaction processing fees are bigger. As a consumer who got in trouble during the 2008 depression, I will note that Discover is less forgiving, and quicker to sell your debt to debt collectors than any other bank. My take is to avoid both as a consumer, if you can.
- giancarlostoro 2y agoMy dad worked at a hotel and he noticed that anytime Amex card holders did a charge back, even if their signature matched their ID, they'd always pull the funds, and the hotel would lose money. We got Amex after that, since it means if we ever have a true theft/card skim issue, chances are high they will back us, instead of putting the debt on us. If that ever changes, I'll ditch them. The small shops might not take them, but every gas station does, and I rather not pump gas with my debit card.
- integricho 2y agowhy would you ever use a credit card if you have funds available for purchase on your debit card? especially for small purchases like gas, seems like an unnecessary way to build up debt. EDIT: I was unaware of all the below listed advantages for using credit cards, especially about % cash-back opportunities, no idea if my bank also supports something alike. Anyway, thanks, I have to investigate/rethink how I pay from now on. EDIT2: I just learned my country does not support cashbacks, not in any one of the banks.