Chase vs American Express: Which Credit Card Company Reigns Supreme?
When it comes to choosing between Chase and American Express credit cards, the decision often hinges on individual spending habits and needs. Both companies offer a range of credit card options, but the key is to find the right fit for your lifestyle. This article delves into the differences and similarities between Chase and American Express, providing insights to help you make an informed choice.
Understanding the Differences Between Chase and American Express
Before diving into the depth of each company’s offerings, it's important to understand the fundamental differences. While American Express (Amex) is well-known for its premium credit cards such as the Green Card, Gold, Platinum, and Centurion, these are more accurately characterized as charge cards. These cards require full payment upon each billing cycle, though Amex now offers a pay-over-time option for a fee and interest. Conversely, Chase offers a broader range of credit cards, including co-branded options with major airlines and hotel chains.
Feeling the pinch of annual fees? The Platinum card from Chase, for instance, incurs an annual fee of $550. It’s crucial to weigh these costs against the benefits they provide.
The Merchant Acceptance Puzzle
A common complaint is the merchant acceptance issue. Many merchants express resistance to accepting Amex due to the higher merchant fees, which can range between 2.5% and 3.5% of the transaction amount. This can make owning an Amex card less convenient for some users. On the other hand, Chase cards often operate on the Visa network, making them universally accepted, with the exception of the new Chase Freedom Flex, which operates on the Mastercard network. For those relying on debit and ATM cards, Chase also offers Visa-branded debit and ATM cards.
Travel Rewards and Cashback
Both Chase and American Express offer travel rewards and cashback credit cards. However, the effectiveness of these programs depends heavily on your travel and spending habits. If you primarily fly on Delta and stay at Hilton hotels, an Amex card might be the better choice. On the other hand, if you prefer Southwest and Hyatt hotels, a Chase card could provide more value.
For those who travel frequently, the Chase Sapphire Reserve stands out as a top option. This card offers 3% cash back on travel and dining purchases, with a 50% bonus when redeemed for travel via their booking website. The annual fee is steep at $550, but it’s mitigated by a $300 annual travel credit. Other benefits include access to Priority Pass (for airport lounges), DashPass (for ridesharing services including Lyft), and a generous signup bonus of 500 to 750 points, or $75, when you spend $4,000 in the first 3 months.
If you’re a frequent grocery shopper or streaming subscriptions user, the American Express Blue Cash Preferred card offers the best value. This card provides 6% cash back on grocery purchases and video streaming subscriptions, with a premium cashback rate for the former up to $6,000 annually. For gas and transit charges, you earn 3% cash back. While this card comes with a $95 annual fee, a $250 signup bonus is earned when you spend $1,000 in the first 3 months.
Card Features and Additional Benefits
Beyond the primary benefits, both Chase and American Express offer valuable additional features. For instance, the American Express Blue Cash Preferred card comes with perks such as annual travel and dining credits, and specific travel benefits. Meanwhile, the Chase Sapphire Reserve provides additional travel and dining amenities, such as priority boarding and airport lounge access.
Both companies actively encourage users to diversify their card usage. For instance, the author personally uses a Chase card for specific purchases due to its travel rewards, and an American Express card for daily spending such as groceries and streaming subscriptions. This approach allows for a balanced approach to credit card usage, optimizing benefits based on the nature of your spending.
By considering these factors—merchant acceptance, annual fees, and specific rewards programs—you can make a more informed decision when choosing between Chase and American Express credit cards. The right choice ultimately depends on your unique spending habits and preferences.