American Express is not a traditional bank — it's a financial services company that issues its own credit cards and payment products

American Express (Amex) operates differently from banks like Chase or Bank of America. It is a card issuer and payment network combined, meaning it both creates the credit cards you carry and runs the system that processes your transactions. Most banks issue Visa or Mastercard products on networks they do not own. American Express owns both the card and the network, which is why you see the Amex logo on both sides of the transaction.

This structure matters because it affects how disputes work, where your money goes, and what protections you have. When you swipe an Amex card, the payment flows through American Express's own system, not through a separate network. That also means American Express sets its own rules about fraud, refunds, and chargebacks — you don't go through Visa's process or your bank's process, you go through Amex's.

American Express does have banking operations, but they are separate from the card business. Amex Bank, FSB (a federal savings bank) holds deposits and offers savings accounts and money market accounts. However, most people who use American Express are using the credit card product, not the bank account product.

Key Takeaways

  • American Express is a card issuer and payment network owner, not a traditional bank, though it does operate a savings bank subsidiary.
  • Disputes and refunds on Amex cards go through American Express directly, not through a separate bank or network.
  • Amex sets its own merchant fees, fraud policies, and chargeback rules because it controls both the card and the network.
  • If you hold an Amex savings account or money market account, that is held by Amex Bank, FSB, which is FDIC-insured.

How American Express differs from Visa and Mastercard

Visa and Mastercard are networks only. They do not issue cards themselves. Instead, they license their brand to banks, which issue Visa or Mastercard products to customers. When you use a Visa card from Chase, Chase issued the card and holds your account, but Visa runs the network that processes the transaction. American Express does both jobs.

This means American Express has more direct control over the entire transaction. It decides what merchants pay in fees, what fraud protections you receive, and how disputes are resolved. With a Visa or Mastercard, those decisions are split between the network and the issuing bank. That split can sometimes slow down dispute resolution because two organizations have to agree on the outcome.

American Express also has stricter merchant requirements. Not every store accepts Amex because the fees are higher than Visa or Mastercard. Some small businesses or international merchants may not take it. This is one trade-off of using a card from a network that also acts as the issuer.

What happens when you dispute a charge on an American Express card

When you report a fraudulent or incorrect charge on an Amex card, the dispute goes directly to American Express. You do not file through a bank or a separate network — Amex investigates the claim itself. This can be faster than disputes on Visa or Mastercard because there is no back-and-forth between a bank and a network.

American Express typically gives you a provisional credit within a few days while it investigates. The full investigation usually takes 30 to 60 days. During that time, Amex contacts the merchant, reviews transaction records, and decides whether to refund you permanently. If Amex determines the charge was unauthorized or the merchant violated its rules, you keep the credit. If it determines the charge was valid, the credit is removed.

Amex's dispute process is generally faster than traditional chargebacks because Amex controls both sides. However, the outcome depends on Amex's own standards, not on rules set by a neutral network. If you disagree with Amex's decision, your options are more limited than they would be with a Visa or Mastercard dispute, because there is no separate network to appeal to.

American Express Bank and deposit accounts

American Express Bank, FSB is a federal savings bank owned by American Express. It holds savings accounts, money market accounts, and certificates of deposit (CDs). If you open a savings account through American Express, your deposits are held by this bank, not by a separate institution.

Deposits in Amex Bank accounts are FDIC-insured up to $250,000 per account type, per depositor. This means if the bank fails, the Federal Deposit Insurance Corporation will cover your balance up to that limit. The FDIC insurance is the same protection you would have at any other bank.

Amex Bank accounts are typically opened online and have no physical branches. Interest rates on savings accounts and money market accounts vary and change over time. If you want to know the current rate, you need to check American Express's website directly, as rates are not fixed.

Merchant fees and why some stores don't take American Express

American Express charges merchants higher fees than Visa or Mastercard. Amex's interchange fees (the percentage the merchant pays per transaction) typically range higher because Amex cardholders tend to have higher spending patterns and lower fraud rates. Merchants pass some of these costs to customers through higher prices or by declining to accept Amex.

Small businesses, restaurants, and international merchants often do not accept American Express because the fees cut too deeply into their margins. Large retailers and premium merchants are more likely to accept it because they can absorb the cost or because Amex cardholders spend more on average.

This is why you may see signs saying "We accept Visa, Mastercard, and Discover, but not American Express." It is a merchant's choice, and American Express cannot force them to accept the card. If you rely on Amex, you should confirm a merchant takes it before making a purchase.

Fraud protection and chargeback rights on Amex cards

American Express offers fraud protection on its credit cards, but the rules are set by Amex, not by a network or a bank. Amex typically covers unauthorized charges if you report them within a reasonable time. However, Amex also has the right to deny coverage if it determines you were negligent — for example, if you shared your PIN or left your card unattended.

Amex does not use the traditional chargeback process that Visa and Mastercard use. Instead, it has its own dispute resolution system. This can be faster, but it also means you are dealing with one organization's standards rather than industry-wide rules. If Amex denies your dispute, you have limited recourse beyond asking Amex to reconsider.

Amex also offers purchase protection on many of its cards, including coverage for items that are damaged, lost, or stolen within a certain period after purchase. The specific terms depend on the card you hold. Check your card's benefits guide to see what protections explore to you.

How American Express makes money

American Express makes money through three main channels: interchange fees (what merchants pay per transaction), annual card fees (what cardholders pay for premium cards), and interest on balances (if you carry a balance on your card). Some Amex cards charge annual fees ranging from $95 to $550 or more, depending on the card's benefits.

Because Amex controls both the card and the network, it keeps a larger share of the revenue from each transaction than a bank that issues a Visa card would keep. The bank issuing a Visa card splits the interchange fee with Visa. Amex keeps more of it because there is no separate network to pay.

This is also why Amex can afford to offer premium benefits on its high-end cards — the higher fees from merchants and cardholders fund those benefits. It is also why Amex is selective about who it approves for credit. The company wants cardholders who will spend heavily and pay on time, because that is where the profit comes from.

Frequently Asked Questions

Is American Express FDIC-insured?

If you hold a savings account or money market account through American Express Bank, FSB, your deposits are FDIC-insured up to $250,000 per account type. Credit card balances are not insured — FDIC insurance only covers deposit accounts. Check your account type to confirm whether it qualifies.

Can I use my American Express card everywhere?

No. While American Express is accepted at most major retailers, restaurants, and online merchants, some smaller businesses, gas stations, and international merchants do not take it because of the higher fees. Always confirm a merchant accepts Amex before making a purchase, especially at small or independent businesses.

What happens if I dispute a charge and American Express says no?

If American Express denies your dispute, you can ask them to reconsider and provide additional evidence. However, you cannot appeal to a separate network the way you could with a Visa or Mastercard dispute. Your options are limited to working with Amex directly or pursuing the matter through your state's consumer protection agency.

Does American Express offer checking accounts?

American Express Bank offers savings accounts, money market accounts, and CDs, but not traditional checking accounts. If you need a checking account, you would need to open one at a different bank. Some people use Amex for savings and another bank for checking.

Why does American Express charge higher fees than Visa or Mastercard?

Amex cardholders historically spend more and have lower fraud rates than average cardholders, so merchants pay higher fees to accept Amex. Additionally, because Amex owns both the card and the network, it does not have to share fees with a separate network, allowing it to charge merchants more while keeping more of the revenue.