American Express is useful if you spend enough to earn rewards and can pay your full balance monthly

American Express cards are not inherently better or worse than Visa or Mastercard — they work differently, cost different amounts, and suit different spending patterns. The real question is whether an American Express card matches how you actually use credit.

American Express charges merchants higher fees than Visa or Mastercard do, which is why some smaller retailers do not accept them. In return, American Express typically offers higher rewards rates, better purchase protections, and more generous benefits on premium cards. You pay for those perks either through an annual fee or by earning rewards only if you spend above certain thresholds.

If you carry a balance month to month, an American Express card will cost you more in interest than a lower-rate alternative — the rewards do not offset that. If you pay in full each month and spend enough to hit rewards tiers, American Express can be worth it. If you shop at small businesses or travel internationally to places where American Express is less common, a Visa or Mastercard may be more practical.

Key Takeaways

  • American Express cards charge annual fees ranging from zero to several hundred dollars depending on the card, and rewards rates are usually higher on cards with annual fees.
  • Not all retailers accept American Express, particularly smaller businesses and some international merchants, so you may need a backup card.
  • American Express offers stronger purchase protections and extended warranties than most Visa and Mastercard products, but only if you use the card to make the purchase.
  • Carrying a balance on an American Express card costs more in interest than the rewards will ever repay, so these cards work only if you pay your full statement balance each month.
  • American Express has stricter approval standards than most issuers, so you will need a credit score above 670 and a solid income history to be considered.

How American Express rewards and fees compare to other networks

American Express cards typically offer 1 to 5 points per dollar spent, depending on the card and the category. A no-annual-fee American Express card might earn 1 point per dollar on everything, or 3 to 4 points on specific categories like dining or travel. A premium card with a $95 to $550 annual fee might earn 4 to 6 points on those categories.

Visa and Mastercard cards often have lower annual fees but also lower rewards rates — typically 1 to 2 points per dollar on most purchases. The difference matters only if you spend enough to earn back the annual fee in rewards value. A card with a $95 annual fee needs to generate at least $95 in rewards per year to break even, which means spending roughly $3,000 to $5,000 depending on the rewards rate.

American Express also charges merchants 2.5 to 3.5 percent of each transaction, compared to 1.5 to 2.5 percent for Visa and Mastercard. That is why some restaurants, gas stations, and small retailers refuse American Express — the fee cuts into their margin. Before opening an American Express card, check whether the places you shop most often accept it.

Acceptance and where American Express does not work

American Express is accepted at most major retailers, hotels, airlines, and online merchants in the United States. However, acceptance is significantly lower at small independent businesses, gas stations, and certain international locations. In some countries, American Express is rarely accepted outside major cities and tourist areas.

If you travel frequently or shop primarily at small local businesses, you will need a Visa or Mastercard as a backup. Many people carry both — an American Express card for everyday spending and rewards, and a Visa or Mastercard for places that do not accept American Express. This approach lets you capture the rewards without getting stuck unable to pay.

American Express also does not work with some subscription services, certain government payments, and some online marketplaces. Before switching entirely to American Express, test it at the merchants you use most often to confirm they accept it.

Purchase protections and benefits that come with American Express

American Express offers stronger purchase protections than most Visa and Mastercard products. These include purchase protection (covering theft or damage to items you buy within a set period), extended warranty coverage (extending the manufacturer's warranty by one to three years), and return protection (refunding you if a merchant refuses a return).

American Express also offers travel protections on premium cards, including trip cancellation insurance, baggage delay reimbursement, and emergency medical coverage when you book travel with the card. These benefits vary significantly by card — a no-annual-fee card may have minimal protections, while a $550 annual fee card may include comprehensive travel and purchase coverage.

The catch is that you must use the American Express card to make the purchase or book the trip to receive the protection. If you book a flight with your Visa card and then pay for the hotel with American Express, the trip cancellation insurance only covers the hotel portion.

Credit score and income requirements for approval

American Express has stricter approval standards than most card issuers. Most American Express cards require a credit score of 670 or higher, though premium cards often require 700 or above. American Express also looks closely at your income and employment history — they want to see stable income and a track record of paying bills on time.

If you have a credit score below 670, limited credit history, or recent late payments, you are unlikely to be approved for an American Express card. In that case, a Visa or Mastercard from a bank or credit union may be easier to obtain. Building credit with a secured card or a card designed for people rebuilding credit is a better starting point.

American Express also reviews your account activity after approval. If you do not use the card regularly or if you miss payments, they may lower your credit limit or close the account. This is more aggressive than most Visa and Mastercard issuers.

When carrying a balance makes American Express more expensive

American Express interest rates are typically competitive with Visa and Mastercard — usually ranging from 16 to 24 percent depending on your creditworthiness. However, the rewards you earn do not offset the interest you pay if you carry a balance.

If you earn 2 points per dollar and those points are worth 1 cent each, you earn 2 percent back on spending. If you carry a balance at 20 percent interest, you are losing 18 percent per year. The rewards become irrelevant. American Express cards only make financial sense if you pay your full statement balance every month.

If you tend to carry a balance, a low-interest card or a card with a 0 percent introductory period will save you far more money than any rewards card, regardless of the network.

American Express alternatives if acceptance or fees are a problem

If you want rewards but need broader acceptance, a Visa or Mastercard rewards card from a major bank or credit union may be a better fit. These cards typically have lower annual fees and are accepted everywhere American Express is accepted, plus many places that do not take American Express.

If you want premium travel and purchase protections without a high annual fee, some Visa and Mastercard premium cards offer similar benefits at lower cost. If you carry a balance, a low-interest card or a card with a 0 percent introductory offer will save you more money than any rewards card.

If you have a lower credit score, a secured card or a card designed for people rebuilding credit is a more realistic starting point than American Express. Once your score improves, you can move to a rewards card.

Frequently Asked Questions

Do I need an American Express card to get good rewards?

No. Visa and Mastercard cards often offer comparable rewards rates, especially on everyday purchases. American Express rewards are typically higher on premium cards, but those cards charge annual fees that offset the benefit unless you spend significantly. Choose based on where you shop and whether you will use the card's benefits, not on the network alone.

What happens if a store does not take American Express?

You will need to use a different card or payment method. This is why many people carry both an American Express card and a Visa or Mastercard. Before opening an American Express card, confirm that the merchants you use most often accept it.

Can I use American Express if I have fair credit?

Most American Express cards require a credit score of 670 or higher. If your score is lower, you are unlikely to be approved. A secured card or a card designed for people rebuilding credit is a better starting point. Once your score improves to 670 or above, you can apply for an American Express card.

Are American Express rewards worth the annual fee?

Only if you spend enough to earn back the fee in rewards value. A $95 annual fee requires roughly $3,000 to $5,000 in spending per year to break even, depending on the rewards rate. If you spend less than that, a no-annual-fee card will save you money.

What if I cannot pay my full balance?

Do not open an American Express card. The interest you will pay far exceeds any rewards you earn. A low-interest card or a card with a 0 percent introductory period is a better choice if you expect to carry a balance.