American Express announced to investors this week they're dropping their merchant fees, which are the fees retailers have to pay in order to accept Amex cards. According to The Financial Times, Amex said the average fees it charges merchants would decline about 2.37% globally, the biggest drop in nearly 20 years.
For consumers, this means Amex cardholders may have more options on where to use their cards. That's because higher fees could compel retailers to only take other cards like Visa or Mastercard (which have lower merchant fees) instead of Amex.
Small businesses today also have more options—you may notice everyone from food trucks to clothing boutiques to hairstylists are now able to take credit cards more easily using platforms like Square—which provides a device to easily accept and swipe cards on smartphones for a 2.75% fee. (Square has other fee structures outlined on their site depending on how businesses accept cards—register, entering in card numbers vs. swiping, etc.).
"The ability to take credit and debit cards can make or break a small business. People don't carry cash," says Mel Ayers, owner of Bluebird Hair Design in Roswell, GA.
"With Square, your transaction goes through immediately and if you need a receipt, you can get it emailed or texted to you right away. And because it's a well-known name, I don't have to reassure a client that their personal information is safe."
More options for businesses and consumers are always a good thing. And regardless of how you're spending—mobile wallets, cash, or credit cards—responsible spending along and paying off any credit card debt is the way to keep your finances in good shape.
Editorial Disclaimer: Opinions expressed here are author's alone, not those of any bank, credit card issuer or other company, and have not been reviewed, approved or otherwise endorsed by any of these entities. All information, including rates and fees, are accurate as of the date of publication.
This article was originally published on March 13, 2018, and has been updated.