American Express earns money three main ways: fees paid by merchants when customers use the card, interest charged to cardholders who carry a balance, and annual membership fees on the cards themselves. In 2025, that produced $72.2 billion in total revenue net of interest expense, split roughly into $37.4 billion of discount revenue from merchants, $17.4 billion of net interest income, and $10 billion of net card fees. The rest came from smaller lines like foreign exchange fees, late fees, and travel services. That is the short version of the Amex revenue breakdown; the longer version is worth understanding because the three streams behave very differently.1American Express. American Express Company Annual Report 2025
How Amex Makes Money Differently From Visa and Mastercard
Most credit card transactions pass through four parties: the cardholder’s bank, the merchant’s bank, the network (Visa or Mastercard), and the merchant. Each takes a cut. Amex collapses that chain. It acts as the network, the card issuer, and effectively the merchant’s acquirer in a single relationship. When you pay with an Amex card, the same company runs your account, sets your credit limit, manages your rewards, and settles with the store.
That closed-loop design is why the revenue mix looks the way it does. Visa and Mastercard live on network fees. Amex collects from both sides of the transaction: the merchant pays a fee to accept the card, and the cardholder often pays interest, an annual fee, or both. Amex has also opened parts of the loop by licensing its network to third-party banks that issue Amex-branded cards, which produces network fees even on cards Amex didn’t issue itself.
Discount Revenue From Merchants
Discount revenue is the largest stream, about 52 percent of the total in 2025 at $37.4 billion.1American Express. American Express Company Annual Report 2025 It is the fee Amex takes out of each transaction before passing payment to the merchant. The rate is called the discount rate, and it is set as a percentage of the sale.
Amex’s discount rates run higher than Visa’s or Mastercard’s. Amex charges roughly 1.43 percent to 3.30 percent per transaction plus a per-transaction fee, versus roughly 1.15 percent to 2.50 percent on the two big networks. That gap is the reason some smaller merchants still refuse Amex, and it is the central tension in the business model.
Rates are not uniform. A national hotel chain with hundreds of millions in Amex volume negotiates a much lower rate than a neighborhood coffee shop. Industry category matters too. So does the specific card product: a premium rewards card costs the merchant more than a basic card, because the higher fee funds the richer rewards.
The economic argument Amex makes to merchants is that its cardholders spend more per visit and more per year than users of other networks, so the higher fee still leaves the merchant with more profit in absolute dollars. That argument works better for high-margin businesses than for thin-margin ones like grocery stores, which is why acceptance is uneven.
The volume figure to watch is “billed business,” the total dollar amount charged on Amex-issued cards. Worldwide billed business hit $1.67 trillion in 2025.1American Express. American Express Company Annual Report 2025 Discount revenue is essentially that number multiplied by the average discount rate, and because Amex has faced steady pressure to lower rates to expand acceptance, most of the growth has come from higher volume rather than higher rates.
Interest on Cardholder Balances
Net interest income was the second-largest stream at $17.4 billion, about 24 percent of the total.1American Express. American Express Company Annual Report 2025 It is the interest Amex earns from cardholders who carry a balance, minus what Amex pays to fund those loans through capital markets and deposits.
The lending book is large. As of February 2026, U.S. consumer and small business card member loans held for investment totaled $126.4 billion, made up of $95.1 billion in consumer loans and $31.3 billion in small business loans.2Stock Titan. American Express Posts Feb 2026 Card Credit Metrics – AXP 8-K Filing Card APRs generally track the prime rate, which itself follows the federal funds rate, so when the Fed raises rates, card rates rise almost immediately.3Federal Reserve Bank of Boston. How Interest Rate Changes Affect Credit Card Spending Amex’s funding costs also rise, but usually more slowly, so a rising-rate environment tends to widen the spread.
Interest income comes with credit risk. When cardholders default, the balance is written off. In the first quarter of 2025 alone, consolidated provisions for credit losses were $1.2 billion.4American Express. American Express Delivers Strong First-Quarter Results Under the CECL accounting standard, Amex has to reserve for expected losses across the full life of a loan rather than only for losses already visible, so provisions can rise sharply on a weakening economic forecast even before defaults actually pick up.5FDIC. Current Expected Credit Losses (CECL)
Amex’s affluent cardholder base helps here. Higher-income borrowers default at lower rates, keeping the loss rate below what typical bank card portfolios experience. The tradeoff is that wealthier customers are more likely to pay in full each month, so balances per cardholder are smaller.
Annual Card Fees
Net card fees brought in about $10 billion in 2025, roughly 14 percent of total revenue, and this line has been the fastest-growing of the three.1American Express. American Express Company Annual Report 2025 It is also the most predictable, because it does not depend on how much anyone spends or borrows. Hold the card and the fee recurs each year.
Amex has pushed hard to move cardholders into premium tiers with substantial fees:
- Platinum Card: $895 per year on the personal card.6American Express. How Much Is the American Express Platinum Card Annual Fee
- Business Platinum Card: $695 per year, with additional cards at $350 each.7American Express. The Business Platinum Card Member Agreement
- Gold Card: $325 per year.
- Centurion (Black) Card: $5,000 per year plus a one-time $10,000 initiation fee, by invitation only.8American Express. Centurion Cardmember Agreement – Rates and Fees Table
The playbook behind the fees is to load each card with enough benefits, such as lounge access, hotel status, statement credits, and concierge services, that the fee feels worth paying. Whether those credits actually offset the fee depends on how the cardholder spends, but retention has stayed high. Card fee growth has come from two directions: fee increases on existing products and migration of cardholders from lower-fee to higher-fee tiers. During a downturn, this line is the ballast: discretionary spending can fall and credit losses can rise while annual fees keep arriving.
Smaller Revenue Lines
Several smaller sources round out the total. Foreign exchange conversion fees apply when a card is used in a currency other than the cardholder’s home currency, adding a percentage to the converted amount. Late payment fees are charged when a cardholder misses a due date. Amex also earns from travel and lifestyle services, including its travel booking platforms and event access programs.
Co-Brand Partnerships Feed All Three Streams
Co-brand cards issued with airlines, hotels, and retailers show up across the revenue statement rather than in one line. A co-branded card carries an annual fee, its transactions generate discount revenue, and any balance carried on it produces interest income.
Delta is the clearest illustration of the scale involved. Delta reported that its American Express remuneration grew 11 percent in 2025 to $8.2 billion, which is what Amex pays Delta for the right to offer Delta-branded cards and for buying SkyMiles.9Delta Air Lines. Delta Air Lines Announces December Quarter and Full Year 2025 Financial Results That is a cost to Amex, but the millions of Delta Amex cardholders generate substantially more in fees, interest, and merchant revenue on the other side. Amex holds similar, smaller partnerships with Hilton, Marriott, and British Airways.
Where the Revenue Comes From by Segment
Amex reports its operations in four segments, and each leans on a different piece of the mix:10American Express. American Express Company Annual Report 2025
- U.S. Consumer Services covers consumer cards issued in the United States, including Platinum, Gold, and co-branded products. It is the main driver of card fee revenue and a major source of consumer lending interest.
- Commercial Services covers small business, mid-market, and large corporate cards. Revenue tilts toward discount revenue from business spending and annual fees on corporate cards.
- International Card Services covers consumer and small business cards issued outside the United States. It was the fastest-growing segment in 2025, with 13 percent spend growth on a currency-adjusted basis.
- Global Merchant and Network Services runs the merchant acceptance network and collects fees from third-party banks issuing Amex-branded cards. It is where the closed loop connects to the wider global payments system.
Watching the segment mix is a useful way to read where growth is really coming from. International and small business have been the strongest lately, while the U.S. consumer business still produces the largest share of absolute revenue. A shift toward third-party-issued volume, for example, points to lower-margin network growth; a shift toward premium U.S. consumer cards points to higher-margin fee and interest growth.