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If you don't carry a balance, then the only cost is if the card has an annual fee. The protection that Amex has given me, when it comes to chargebacks for purc

If you don't carry a balance, then the only cost is if the card has an annual fee. The protection that Amex has given me, when it comes to chargebacks for purchases that didn't work out has easily justified the annual fee. And that's before any perks like miles or cashback or anything else.

eru 2y ago
> If you don't carry a balance, then the only cost is if the card has an annual fee. You know that every time you use the card, American Express charges a fee? All the perks and cashbacks etc come more or less out of that fee. Of course, that fee doesn't show up directly on your bill. But you still pay ultimately it. (Just like you as an individual bear most of the brunt of a VAT, even if officially the shop hands the money to the government.)
- jack_pp 2y ago
  Doesn't the merchant pay the fee? Never heard of shops having different prices for different credit cards or cash but maybe they should do that in order for card users to see the real cost of their credit cards. Until that happens card users will not care
  - acchow 2y ago
    The consumer pays higher prices (since the merchant charges higher prices due to transaction costs), which is passed onto the network+banks via the merchant. There’s an analogous situation with tariffs - it seems the manufacturer pays the cost of the tariffs since it is coming out of their bank accounts. But it’s actually consumers paying the tariffs.
    - jack_pp 2y ago
      You're right, then we should move to have different prices which show clearly the fees, I suspect a lot more people would go back to cash. The problem is the govt wants to get rid of cash all together so I guess this will never happen
    - sgerenser 2y ago
      Not really true, depends on the marginal elasticity of demand whether the consumer vs. the retailer pays and how much. My wife owns a retail store, and she loves Amex customers, they’re usually the highest spenders and easiest to upsell. Having a surcharge for credit cards or Amex in particular would be counterproductive.
      - eru 2y ago
        Well, and I assume those upsells probably have a higher margin for her. Ie effectively she's charging those Amex guys more.
- yumraj 2y ago
  > Of course, that fee doesn't show up directly on your bill. But you still pay ultimately it. Unless I’m charged a lower cash price vs a higher credit card price, no, I’m not really ultimately paying it. You may be correct at a macro level but I’m looking at it from a practical standpoint. When a merchant does charge a lower cash price, I make a real time judgement call to pay in cash or use card.
  - eru 2y ago
    > Unless I’m charged a lower cash price vs a higher credit card price, no, I’m not really ultimately paying it. You may be correct at a macro level but I’m looking at it from a practical standpoint. It's typically the more expensive merchants with higher margins who accept American Express. So you are right that staying with the same merchant, you seldom get an explicit discount for not using American Express. The non-AmEx discount is more hidden, in the form of being able to shop at not-so-overpriced merchants.

eru 2y ago

> If you don't carry a balance, then the only cost is if the card has an annual fee. You know that every time you use the card, American Express charges a fee? All the perks and cashbacks etc come more or less out of that fee. Of course, that fee doesn't show up directly on your bill. But you still pay ultimately it. (Just like you as an individual bear most of the brunt of a VAT, even if officially the shop hands the money to the government.)

jack_pp 2y ago
Doesn't the merchant pay the fee? Never heard of shops having different prices for different credit cards or cash but maybe they should do that in order for card users to see the real cost of their credit cards. Until that happens card users will not care
- acchow 2y ago
  The consumer pays higher prices (since the merchant charges higher prices due to transaction costs), which is passed onto the network+banks via the merchant. There’s an analogous situation with tariffs - it seems the manufacturer pays the cost of the tariffs since it is coming out of their bank accounts. But it’s actually consumers paying the tariffs.
  - jack_pp 2y ago
    You're right, then we should move to have different prices which show clearly the fees, I suspect a lot more people would go back to cash. The problem is the govt wants to get rid of cash all together so I guess this will never happen
  - sgerenser 2y ago
    Not really true, depends on the marginal elasticity of demand whether the consumer vs. the retailer pays and how much. My wife owns a retail store, and she loves Amex customers, they’re usually the highest spenders and easiest to upsell. Having a surcharge for credit cards or Amex in particular would be counterproductive.
    - eru 2y ago
      Well, and I assume those upsells probably have a higher margin for her. Ie effectively she's charging those Amex guys more.
yumraj 2y ago
> Of course, that fee doesn't show up directly on your bill. But you still pay ultimately it. Unless I’m charged a lower cash price vs a higher credit card price, no, I’m not really ultimately paying it. You may be correct at a macro level but I’m looking at it from a practical standpoint. When a merchant does charge a lower cash price, I make a real time judgement call to pay in cash or use card.
- eru 2y ago
  > Unless I’m charged a lower cash price vs a higher credit card price, no, I’m not really ultimately paying it. You may be correct at a macro level but I’m looking at it from a practical standpoint. It's typically the more expensive merchants with higher margins who accept American Express. So you are right that staying with the same merchant, you seldom get an explicit discount for not using American Express. The non-AmEx discount is more hidden, in the form of being able to shop at not-so-overpriced merchants.