Question from a reader:
I’m using an Amex card, but why does my available credit return the day after the payment is deducted? I thought it usually takes a few days for payment confirmation from financial institutions, so it’s a bit puzzling.

Why Does Amex’s Available Credit Return the Next Day?

Hello! Today, I will answer questions from those using American Express
(Amex) cards. In particular, let’s delve into the question, “Why does my available credit return the day after the payment is deducted?” A few years ago, when I first got my Amex card, I was also puzzled by this system. Typically, credit card payments take time for payment confirmation from financial institutions, right? However, with Amex, it returns the next day. What exactly is going on here?

Understanding the Amex System

First, let me briefly explain how the Amex credit card system works. Unlike other credit card companies, Amex is the issuer of the card itself, which means it has a direct relationship. Transactions can be conducted without going through a bank, allowing for quick payment confirmations. For example, let’s say you purchase something with your Amex card. At this point, the purchase amount is immediately deducted from your available credit. This is a common mechanism seen in many credit cards. However, Amex has a unique feature where the amount is returned to your available credit the day after the payment is completed.

Reasons for Rapid Payment Processing

So, why can Amex return the available credit so quickly? There are several reasons for this. 1. Direct Transactions: Amex centrally manages both card issuance and payment processing. This allows for quick transaction confirmations. In contrast, regular credit cards often have separate entities for issuing and processing payments, which typically takes more time for confirmation. 2. Cash Flow Management: Amex can monitor customers’ payment statuses in real-time, allowing for quick adjustments to available credit. This means that the amount available for customers can be reflected immediately, enhancing business liquidity. 3. Improved Customer Satisfaction: Amex places a strong emphasis on customer service. The rapid return of available credit can be seen as a service to customers. Users can immediately use their cards again after making a payment, increasing convenience.

Personal Experience

I was once surprised while using my Amex card. After purchasing an expensive gift, I found that my available credit returned the day after the payment was completed. I couldn’t help but exclaim, “Wait, it’s already back?” This speed was astonishing compared to my other cards, which typically took several days for deductions. Through such experiences, I have come to appreciate the convenience of Amex and have increasingly relied on it. However, just because this system exists, one must be careful not to overspend. Just because the available credit returns quickly doesn’t mean it’s wise to use it excessively.

Legal Perspective

Now, let’s touch on a bit of the legal perspective. The reason Amex can quickly return available credit is due to contractual agreements and transaction transparency. Generally, credit card companies enter into contracts with customers regarding the provision of services. These contracts detail aspects such as available credit, payment timing, and interest calculation methods. The mechanism of returning deductions the next day, as seen with Amex, operates within legally acceptable boundaries. Because transactions are conducted transparently under the law, customers can confidently use their cards.

Conclusion

The reasons Amex’s available credit returns the day after a payment is deducted include the centralization of issuance and payment processing, real-time cash flow management, and being part of customer service. By understanding this convenient system, you can use Amex with confidence. Finally, while credit cards are convenient, it’s essential to use them wisely. Consider your repayment ability and use them smartly! Wishing you a great card experience!