The American Express Blues
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American Express came very close to sinking my business, having to tell employees that their paycheck was late, even though we had crossed every T to make sure that our customers payments were on time, due to American Express causing problems that would purposefully keep large payment amounts in their own coffers for the smallest and most manufactured of "issues", was one of the worst experiences of my professional life.
You know how customers who are "king" often fume that they supposedly will "never do business again" with some company due to some perceived slight? Well, I am fully aware that I may lose business, lose money, and fail to get customers for my choice, but they hurt me, my reputation, my sanity, my employees, so badly with their selective policy enforcement that I will truly never do business with American Express again. You have to draw the line somewhere.
Was I missing something? Did they have other functionality that made them worthwhile?
* Amex cards don't have pre-set limits. That's now true of many other business cards too, but the fee structures still differ. Visa allows/expects/hopes you'll carry a balance on your card. Amex disallows it.
* In business-to-business situations, everyone accepts Amex.
* Amex has absolutely killer customer service. There is simply no comparison. Amex dispute resolution is "default deny" to merchants; when I've contested charges, I've never spent more than 5 minutes on the phone. Total. I feel safer charging big-ticket items on my Amex than on any other card.
The major difference between Amex and Visa is the business model; Visa is a payment system that works through card-issuing banks. Your relationship isn't with the card; it's to some bank. Amex is a company, and your relationship is to Amex.
Visa (or your bank) manage to reconcile the situation first.
If they abuse merchants enough, they won't accept CCs. But refusing Visa or Mastercard means turning away a lot of customers. Refusing Amex means turning away some. If merchants start turning away cards, the card is less useful. Amex is not a stand-alone card because it sometimes gets turned away. You need a real CC too. Merchants can average things out over time, so while the 1 in 100 dispute is unfair, stressful, rant-inducing stuff, it ultimately only costs around 1%. I assume this is less then what you lose from turning the card away. Since they are businesses, they are obliged to make more rational decisions. This makes them a better target for abuse.
Note that I get why you'd carry Visa/MC debit in your personal life. I just don't know why you'd work with the banks for your credit card.
I think the big rub here is that American Express will freeze your card without informing you first. This leads to the uncomfortable situation where you try and swipe the card and it is immediately declined
Hopefully things will settle down in the next few months.
What I can say is that so far AMEX customer service has been top notch - my issues have always been handled promptly and professionally . Their travel services division also came through in a pinch a few months ago.
If venture capitalists are getting their purchases denied, this concerns me as a small business owner because I depend on my amex card more than anything else to make purchases for my business and having my buyer protection and ability to make large purchases disappear would be pretty devastating. Buying goods like computers and furniture from multiple vendors with cash out of my bank account is an awful idea that should make anyone uneasy, business owner or not.
And if AmEx is actively shutting their largest and most high-profile accounts down, I'm not sure how easy it would be to get a new "unlimited" line of credit in this environment, with AmEx or any other company.