American Express works best if you spend heavily on specific categories and can pay your full balance monthly

American Express cards reward concentrated spending more than broad spending. If you put most of your money into one or two categories—dining, travel, or shopping at specific retailers—an Amex card can return 3% to 6% per dollar. If your spending is scattered across many categories, or if you carry a balance month to month, a different card will likely save you more money.

Amex also has a narrower merchant network than Visa or Mastercard. Not every store accepts American Express, particularly smaller retailers and some regional chains. Before you commit to an Amex card, check whether the places you shop most often take it. You can search by merchant on the Amex website or call the card issuer directly.

The annual fee on most Amex cards ranges from $95 to $695, depending on the card. Some cards have no annual fee. The fee is worth paying only if the rewards you earn in a year exceed what you pay—and only if you actually use the card. A card sitting in a drawer costs you money every year.

Key Takeaways

  • American Express cards typically offer higher rewards rates (3% to 6%) in specific categories like dining and travel, but only if you concentrate your spending there.
  • Not all merchants accept American Express, so confirm that the stores and restaurants you use most often take it before you open an account.
  • Most Amex cards charge an annual fee between $95 and $695; cards with no annual fee exist but offer lower rewards rates.
  • American Express requires you to pay your full statement balance each month on most cards—carrying a balance will cost you interest and defeats the rewards benefit.
  • Amex cards often include travel protections, purchase protection, and concierge services that may offset the annual fee if you travel frequently.

How American Express rewards compare to Visa and Mastercard

American Express cards typically offer higher rewards rates than Visa or Mastercard in specific categories. A common Amex card might return 3% on dining and 1% on everything else. A comparable Visa or Mastercard might return 2% on dining and 1% on everything else. Over a year of heavy dining spending, that 1% difference adds up.

The trade-off is that Amex cards often have higher annual fees. A Visa card with 2% cash back and no annual fee might net you more money than an Amex card with 3% cash back and a $95 annual fee—unless you spend enough to earn that $95 back in extra rewards. Do the math for your own spending before you decide.

Amex also tends to offer more premium perks: travel insurance, purchase protection, extended warranties, and concierge services. These benefits matter most if you travel frequently or buy expensive items. If you never fly or rarely make large purchases, these perks have little value to you.

Annual fees and whether they pay for themselves

Most American Express cards charge an annual fee. The American Express Blue Cash Preferred charges $95 per year. The American Express Gold Card charges $250 per year. The American Express Platinum Card charges $695 per year. A few Amex cards, like the Blue Cash Everyday, have no annual fee but offer lower rewards rates.

To know whether an annual fee is worth it, calculate how much you would earn in rewards in a year, then subtract the fee. If you spend $10,000 per year on dining and earn 3% back, that is $300 in rewards. Subtract the $95 annual fee and you net $205. If you spend $2,000 per year on dining, you earn $60 in rewards—which does not cover the $95 fee, so the card costs you money.

Many Amex cards offer a statement credit that can offset the annual fee. The Gold Card, for example, includes a $120 annual dining credit. If you use that credit, the net cost of the card drops to $130 per year instead of $250. Read the full benefits list for any card before you decide whether the fee makes sense for your situation.

Merchant acceptance and where American Express is not taken

American Express has a smaller merchant network than Visa or Mastercard. Most large retailers, restaurants, and hotels accept Amex. Many small businesses, gas stations, and regional chains do not. Some merchants accept Amex only for purchases above a certain amount. A few accept it only at certain locations.

The best way to check is to look at where you spend money most often. Visit the Amex merchant locator on their website, or call the card issuer and ask whether your regular grocery store, gas station, or favorite restaurant takes American Express. If you discover that half your spending goes to merchants that do not accept Amex, the card will not work for you—you would have to carry a second card anyway.

Some people solve this by keeping both an Amex card and a Visa or Mastercard. They use the Amex where it is accepted and earns rewards, and use the other card where Amex is not taken. This works if you are disciplined about tracking which card you used where, but it adds complexity to your finances.

Balance transfers and carrying a balance on Amex

Most American Express cards do not allow you to carry a balance without paying interest. You must pay your full statement balance by the due date each month. If you pay only part of the balance, Amex charges interest on the unpaid portion—usually 16% to 27% APR, depending on the card and your creditworthiness.

This is different from some Visa and Mastercard products, which let you pay a minimum amount and carry the rest forward. If you know you cannot pay your full balance every month, an Amex card will cost you money in interest charges. The rewards you earn will not offset the interest you pay.

A few American Express cards do offer a balance transfer option, but these are rare and come with high fees. If you are considering an Amex card specifically to transfer a balance from another card, look at a Visa or Mastercard instead—they have more balance transfer options and lower fees.

Credit score requirements and approval odds

American Express typically requires a credit score of 670 or higher to be considered for most of their cards. Some premium cards, like the Platinum, prefer scores of 700 or higher. This is not a hard rule—Amex may approve you with a lower score if you have other positive factors, like a long credit history or high income. But if your score is below 670, your odds of approval are lower with Amex than with Visa or Mastercard issuers.

Amex also looks at your income and existing debt. If you have high debt relative to your income, or if you have recently opened many new accounts, Amex may deny you or offer you a lower credit limit than you requested. You can check your credit score for free through many banks and credit card issuers, or through websites like AnnualCreditReport.com.

If you are approved, Amex will tell you your credit limit. Unlike some card issuers, Amex does not always increase your limit automatically over time. You can request a credit limit increase by calling the number on the back of your card or logging into your online account.

Travel benefits and protections that come with Amex cards

Most American Express cards include travel insurance and protections that Visa and Mastercard cards do not. These typically include trip cancellation insurance, trip delay reimbursement, lost luggage reimbursement, and emergency medical and dental coverage when you travel outside the United States.

The Platinum Card, which costs $695 per year, includes $200 in annual airline fee credits and $200 in annual hotel credits. It also includes access to airport lounges and concierge services. If you travel frequently and would use these benefits, the card can pay for itself. If you travel once a year or not at all, these perks have no value to you.

Read the fine print on any travel benefit before you rely on it. Coverage limits vary by card, and many benefits have exclusions or require you to book through specific channels. A trip cancellation benefit might not cover cancellations due to pandemics, for example, or might only reimburse you if you booked through the Amex travel portal.

Frequently Asked Questions

Do I need excellent credit to get an American Express card?

Most Amex cards prefer a credit score of 670 or higher, though some premium cards want 700 or higher. You can still be approved with a lower score if you have other positive factors like stable income or a long credit history. Check your score before you explore so you know your odds.

Can I use American Express everywhere Visa and Mastercard are accepted?

No. American Express has a smaller merchant network. Most large retailers and restaurants take it, but many small businesses, gas stations, and regional chains do not. Check the Amex merchant locator for the places you shop most often before you open an account.

What happens if I carry a balance on an American Express card?

You will pay interest on the unpaid balance, usually 16% to 27% APR. Most Amex cards require you to pay your full statement balance each month. Carrying a balance defeats the rewards benefit and costs you money in interest charges.

Is the annual fee worth it if I do not travel?

Only if the rewards you earn in a year exceed the annual fee. Calculate your expected rewards based on your actual spending, then subtract the fee. If the number is negative, the card costs you money. If you do not travel, premium cards with travel perks are not a good fit for you.

Can I get a higher credit limit on my American Express card?

Yes. You can request a credit limit increase by calling the number on the back of your card or logging into your online account. Amex will review your account and may approve, deny, or offer you a lower increase than you requested.