Photo by Kenny Luo on Unsplash
Photo by Kenny Luo on Unsplash
Is there a difference between American Express and Diners Club credit cards? Yes! Does it matter? Possibly!
- What is American Express or Diners Club?
- Diners Club and AMEX rewards
- AMEX credit cards & interest rates
- Diners Club cards
- 11 ways to maximise your rewards points
What is American Express or Diners Club?
Like Visa and Mastercard, American Express (also known as Amex) and Diners Club are payment systems, BUT they also provide their own cards, predominately targeting the higher end of the card market. So while Visa and Mastercard offer their services to dozens of individual card providers, Amex and Diners Club only offer their own branded cards (although American Express does have partnerships with other banks and providers, such as Westpac).
Diners Club & AMEX rewards
Many people find that these cards offer excellent value for rewards and frequent flyers – you can earn up to three points per dollar spent, which can be redeemed at shops, airlines, restaurants and more. Some of the most popular and recommended cards among ‘points’ nerds will come from American Express and Diners Club.
Both Diners Club and American Express charge higher merchant fees than Visa and Mastercard – these are the fees paid by merchants to the financial institution or card network for allowing customers to use their cards to make purchases and are one of the biggest sources of revenue for card providers and networks.
Some stores pass this higher cost onto customers or absorb it themselves. Either way, there are plenty of stores nationwide and worldwide that refuse to take Amex or Diners Club branded cards.
It costs merchants more to take payments from these two cards than it does to accept Visa and Mastercard, hence the latter’s global acceptance.
AMEX credit cards
Amex has a range of credit cards available, ranging from low rate cards to rewards and premium cards. Amex definitely places a greater emphasis on the latter two – many of its cards offer high rewards points, lucrative features like lounge access and travel insurance.
AMEX interest rate
In terms of interest rates, the majority of American Express’s cards are seen as ‘high-end’ products, so most of its purchase rates are above 20%. However it does have a low rate credit card with a rate of 8.99%, which is one of the lowest credit card rates on the market right now.
American Express was initially a freight forwarding company back in the 1850s but didn’t offer its first charge card until 100 years later in the 1950s. It’s now one of the world’s premier credit and charge card providers, generating $33 billion a year in revenue and with 112 active cards out there.
American Express doesn’t publish figures on its acceptance at merchants here or overseas, although it claims that 120,000 new merchants in Australia have joined the American Express network since January 2017. You’ve no doubt seen plenty of stores that say ‘No Amex’ so your options are more limited than other networks, but there are still tens of thousands across the country. American Express Australia does list popular stores and services that accept its cards here.
Diners Club cards
It’s important to remember that Diners Club doesn’t actually offer a credit card product. It instead offers charge cards, which don’t charge interest but do require you to pay off the full balance every month.
The history of Diners Club is an interesting one. It all started in 1950, when a man named Frank McNamara forgot his wallet when eating at a restaurant. His wife ended up paying the bill, which left good old Frank very embarrassed, and he vowed to create a new payment option known as the charge card (bit of a drastic reaction there don’t you think Frank?). Just a few years later it had been recognised in the UK, Canada and Mexico, making it the first internationally recognised charge card.
Citi acquired Diners Club in 1981, and by 1984 it started the industry’s first rewards program: club rewards. Diners Club also partnered with Mastercard to eliminate the issues of accessibility worldwide, as cardholders can take out a separate World Mastercard but still earn the same rewards. Diners Club users have access to over 800,000 ATMs and cash access location in more than 180 countries worldwide. With a World Mastercard added to their account, Diners Club users can have access to 1.9 million more ATMs and cash access locations.
11 ways to maximise your rewards
Savings.com.au’s two cents
Diners Club and American Express are again very similar – they both tend to be more ‘lucrative’ networks with higher interest rates (on Amex) and fees in exchange for rewards and special features. But with their higher merchant fees, there’s a bigger chance that cards on these networks won’t be accepted by some stores. Even if the store does accept them, they may have a surcharge on those making purchases with such cards. If you’re using these cards for most of your everyday spend, these surcharges can really add up.
While a card’s network should form part of your consideration, you should primarily compare credit and charge cards on the following core factors:
- The interest rate
- The fees (mainly the annual fee)
- The features the card has
- Whether the card has a rewards program that suits you
- How easily you can apply for and cancel the card
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