What American Express cards do well, and what they don't
American Express cards work best if you spend money at restaurants, hotels, or airlines, or if you already have a solid credit history and can pay your full balance every month. They are not the right choice if you carry a balance month to month, shop mostly at grocery stores and gas stations, or are rebuilding credit after missed payments.
The reason comes down to how Amex makes money. Most Visa and Mastercard networks charge merchants a small percentage of each sale. Amex charges merchants more — sometimes twice as much — which means Amex can afford to pay you back more in rewards. But that also means some smaller stores and many grocery chains don't accept Amex at all, or they accept it reluctantly. If you live somewhere rural or shop at discount grocers, you'll hit that wall fast.
The other catch is interest rates. Amex cards typically charge higher interest rates than Visa or Mastercard cards with similar credit limits. If you plan to carry a balance, that higher rate will cost you real money each month. The rewards you earn will not come close to covering it.
Key Takeaways
- American Express cards offer higher rewards rates than most Visa and Mastercard cards, but only if you pay the full balance every month.
- Not all stores accept American Express, especially smaller retailers, gas stations, and grocery chains, so check where you shop before you open an account.
- Amex cards usually require good credit (typically a score of 670 or higher) and charge higher interest rates than competing cards, making them expensive if you carry a balance.
- The best Amex cards for most people are those with no annual fee and rewards that match your actual spending — restaurants and travel, not groceries.
Where Amex rewards actually add up
American Express cards typically offer 1 to 6 points per dollar spent, depending on the card and the category. A card that gives 3 points per dollar at restaurants and 1 point per dollar everywhere else can be worth real money if you eat out often and pay no annual fee.
The math is straightforward: if you spend $300 a month at restaurants and earn 3 points per dollar, that's 900 points monthly, or 10,800 points a year. Most Amex cards let you redeem points for statement credits (usually worth about 1 cent per point), which would be $108 a year in value. That's real, but only if you actually use the points and only if you're not paying interest.
Where rewards fall apart is at grocery stores and gas pumps. Most Amex cards earn just 1 point per dollar there, while many Visa and Mastercard cards earn 2 to 3 percent cash back. Over a year, that difference adds up. If you spend $400 a month on groceries, a card earning 1 point per dollar gives you $48 in annual value, while a 2 percent cash back card gives you $96.
Credit score requirements and approval odds
American Express typically approves people with credit scores of 670 or higher, though some cards require 700 or above. If your score is below 650, you will almost certainly be denied. If your score is between 650 and 670, you might be approved for a card with a lower credit limit or higher interest rate.
Amex also looks at your payment history more carefully than other card issuers do. A single missed payment in the last two years makes approval much less likely. If you've had a late payment, charge-off, or collection account in the past five years, assume you'll be denied unless you've since rebuilt your score significantly.
The good news: Amex publishes its approval odds before you explore. When you start the process online, it will tell you "Good Odds," "Fair Odds," or "Not Recommended" based on your credit profile. This is one of the few card issuers that does this, so you can avoid a hard inquiry if your odds are poor.
Annual fees and whether they're worth it
Some American Express cards have no annual fee. Others charge $95, $150, $250, or more per year. The question is whether the rewards and benefits you actually use cover that cost.
A card with a $95 annual fee needs to deliver at least $95 in value to break even. If the card gives 3 points per dollar at restaurants and you spend $300 a month there, that's $108 in annual value — barely enough. But if you also use the card's travel credits (like $100 toward airline fees or hotel stays), the math gets easier. If you don't use those credits, the card costs you money.
For most people, a no-annual-fee Amex card is the safer choice. You get the rewards without the risk of paying for benefits you don't use. The rewards rate will be lower than a premium card, but you won't lose money if your spending patterns change.
Interest rates and the cost of carrying a balance
American Express cards typically charge between 16 and 24 percent interest, depending on the card and your creditworthiness. That is higher than the average Visa or Mastercard, which typically range from 14 to 20 percent.
The difference matters if you carry a balance. On a $2,000 balance at 20 percent interest, you pay $400 in interest over a year if you make no payments. On the same balance at 18 percent, you pay $360. That $40 difference is small, but it adds up, and it completely erases any rewards you've earned.
If you know you will carry a balance, do not open an American Express card. A card with a lower interest rate and no rewards is cheaper than a high-rewards card with high interest. The math is not close.
Acceptance and where you might hit a wall
American Express is accepted at most major retailers, restaurants, and hotels. But acceptance is not universal. Roughly 1 in 20 U.S. merchants do not accept Amex, and that number is higher in rural areas and at small independent businesses.
Gas stations are a particular weak point. Some gas stations accept Amex only at the pump, not inside the store. Others don't accept it at all. If you fill up at independent stations or in rural areas, you should test your Amex card before you rely on it as your primary card.
The safest approach: keep a Visa or Mastercard in your wallet as a backup. Use the Amex for the categories where it earns the most (usually restaurants and travel), and use the Visa or Mastercard for groceries, gas, and anywhere you're not sure Amex is accepted.
Comparing Amex to Visa and Mastercard for your situation
The choice between Amex and other networks depends on three things: where you spend money, whether you carry a balance, and whether you have good credit.
If you have good credit, pay your balance in full every month, and spend heavily at restaurants or hotels, an Amex card with no annual fee is worth considering. If you spend most of your money at grocery stores and gas stations, a Visa or Mastercard with 2 to 3 percent cash back will save you more money. If you carry a balance or have fair credit, skip Amex entirely and choose a card with a lower interest rate.
The best way to decide is to look at your actual spending for the last three months. Add up what you spent in each category — groceries, gas, restaurants, travel, everything else. Then compare the rewards you'd earn on an Amex card to what you'd earn on a competing Visa or Mastercard. The card that comes out ahead is the one to open.
Frequently Asked Questions
Do I need excellent credit to get an American Express card?
No, but you need good credit — typically a score of 670 or higher. Amex has cards for people with fair credit (scores around 650 to 700), but they usually come with higher interest rates and lower credit limits. If your score is below 650, you'll likely be denied.
Can I use my Amex card everywhere a Visa card works?
No. While Amex is accepted at most major retailers, roughly 1 in 20 merchants don't accept it. Small independent stores, some gas stations, and certain rural businesses may not take Amex. Always keep a backup card.
What happens if I carry a balance on an Amex card?
You'll pay a higher interest rate than you would on most Visa or Mastercard cards — typically 16 to 24 percent. The interest charges will quickly erase any rewards you've earned. If you carry a balance, choose a card with a lower interest rate instead.
Is the annual fee worth it on a premium Amex card?
Only if you actually use the card's benefits. A $95 annual fee needs to deliver at least $95 in value through rewards, travel credits, or other perks. If you don't use those benefits, the card costs you money. For most people, a no-annual-fee card is the better choice.
How do Amex rewards compare to cash back cards?
Amex typically offers higher rewards rates (1 to 6 points per dollar) than cash back cards (1 to 3 percent), but the value depends on how you redeem. Points are usually worth about 1 cent each, so a 3-point card is roughly equal to a 3 percent cash back card. The difference is that Amex points may be harder to use if you don't travel or stay at partner hotels.