"How much money does American Express hold?" This question can be interpreted in a few ways, so let's break it down! Are you curious about the total assets American Express manages as a financial institution, or are you more interested in the temporary holds placed on your credit card when you make a purchase? Perhaps you're even wondering about security deposits for certain Amex cards. We'll cover all these aspects to give you a complete picture.
Understanding American Express's Financial Footprint
Let's start with the big picture: the sheer scale of American Express as a financial entity.
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| How Much Money Does American Express Hold |
Step 1: Delving into American Express's Total Assets
Have you ever thought about how much money a major financial institution like American Express actually controls? It's a staggering figure that speaks to its global influence.
As of 2024, American Express reported total assets of approximately US$271.5 billion. To put that into perspective, it makes Amex the 16th largest US bank, holding about 1.1% of all assets insured by the FDIC. This vast sum isn't just sitting in a vault; it represents a complex web of investments, loans, and other financial instruments that allow Amex to operate its diverse business lines, including credit cards, charge cards, corporate banking, and travel services.
This substantial asset base allows American Express to:
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Support its extensive card network: Facilitating trillions of dollars in purchase volume annually.
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Provide credit and lending services: For both consumers and businesses.
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Invest in technology and infrastructure: To maintain its global operations and security.
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Manage its own operations and liabilities: Including employee salaries, operational costs, and shareholder returns.
How American Express "Holds" Your Money: Authorization Holds
Now, let's shift our focus to something more directly experienced by cardholders: authorization holds, often simply called "holds." These are temporary reservations of funds on your credit or charge card.
Step 2: Unpacking Credit Card Authorization Holds
Ever swiped your card at a gas station or hotel and noticed a charge for more than you actually spent? That's a common example of an authorization hold in action.
Tip: Stop when confused — clarity comes with patience.
An authorization hold is a temporary blockage of a specific amount of your available credit or funds by the card issuer (American Express, in this case). It's not a permanent charge, but rather a way for a merchant to ensure you have sufficient funds to cover an anticipated transaction before the final amount is known. Think of it as a pre-approval.
Sub-heading 2.1: Why Do Merchants Place Holds?
Merchants use authorization holds for several key reasons:
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To guarantee payment: This is especially crucial for businesses where the final transaction amount isn't known upfront, like hotels (for incidentals), rental car companies (for potential damages or extended rentals), or gas stations (where you might pump more or less fuel than a pre-set amount).
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To prevent fraud: A hold confirms the card is active and has available credit, reducing the risk of chargebacks for the merchant.
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For future or uncertain charges: For example, a restaurant might place a hold for the meal cost, with the tip added later as a final charge.
Sub-heading 2.2: How Long Do Holds Last? ⏳
The duration of an authorization hold can vary significantly depending on the merchant, the type of transaction, and even the card issuer's policies.
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General timeframe: For most standard purchases, holds usually last from one to four business days.
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Industry-specific holds:
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Hotels: Holds can sometimes last for the entire duration of your stay plus a few days after checkout, to account for any minibar charges or damages.
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Rental Cars: These can be even longer, sometimes remaining for several days or even weeks after the car is returned, allowing time for potential fines or damages to be reported.
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Gas Stations: Often a temporary hold for a higher amount (e.g., $75-$100) is placed, which is then adjusted to the actual fuel cost within a day or two.
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Important Note: While the hold prevents you from using that portion of your credit limit, it does not accrue interest until the actual transaction posts to your account.
Sub-heading 2.3: Pending Transactions vs. Posted Transactions
When you check your American Express account online or via the app, you'll often see "pending transactions."
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Pending Transactions: These are the authorization holds. They are deducted from your available credit immediately but are not yet included in your actual account balance or subject to interest.
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Posted Transactions: This is when the merchant has finalized the transaction and submitted the charge to American Express. At this point, the hold is removed, and the actual charge is added to your account balance, becoming subject to interest if you carry a balance.
Charges made in foreign currency or using contactless payment might not always appear in pending transactions immediately. Also, certain types of charges like direct debits, fees, refunds, and bill payments typically won't show up as pending and will only appear once they are fully posted to your account.
American Express and Security Deposits
QuickTip: Compare this post with what you already know.
While many American Express cards are unsecured, meaning they don't require a security deposit, some do.
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Step 3: Understanding Security Deposits for Amex Cards ️
Are you looking to build or rebuild your credit history? A secured credit card can be a helpful tool, and some American Express co-branded cards fall into this category.
A security deposit is an amount of money you provide upfront to the card issuer. This deposit then typically becomes your credit limit. It serves as collateral for the issuer, reducing their risk, especially for individuals with limited or no credit history, or those looking to improve their credit.
Sub-heading 3.1: How Secured Amex Cards Work
While American Express primarily offers unsecured charge and credit cards, they do have partnerships that offer secured options. For example, the USAA Secured American Express Credit Card requires you to open a Certificate of Deposit (CD) as your security deposit.
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Deposit Amount: The amount you deposit determines your credit limit. This can range from a few hundred dollars (e.g., $250) up to several thousand (e.g., $5,000 for the USAA card).
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Interest-Earning CD: In the case of the USAA card, your security deposit is held in an interest-earning CD, meaning your money can grow slightly while it's held.
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Credit Building: Using a secured card responsibly (making on-time payments and keeping utilization low) helps build a positive credit history, as your payment activity is reported to major credit bureaus.
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Upgrade Path: Many secured cards offer a path to upgrade to an unsecured card after a period of responsible use. If you qualify for an upgrade, your security deposit would typically be returned to you.
It's important to note that the security deposit is held by the issuer (like USAA for their co-branded Amex card) and is not used to make your payments directly. It's simply collateral.
FAQs: How to Manage Money Related to American Express
Here are 10 frequently asked questions, focusing on the "how-to" aspects of managing money and understanding holds with American Express.
How to Check Your Available Credit with American Express?
QuickTip: Read again with fresh eyes.
You can typically check your available credit by logging into your American Express online account, using the Amex mobile app, or by calling the customer service number on the back of your card.
How to Understand a Pending Transaction on Your Amex Account?
A pending transaction is an approved purchase that hasn't yet been fully processed by the merchant. It shows as deducted from your available credit but isn't part of your current statement balance until it posts. You can usually see pending transactions in your online account activity.
How to Get an Authorization Hold Released Faster?
Authorization holds are typically released automatically when the merchant finalizes the transaction. If a hold remains for an unusually long time, you can contact the merchant directly to request they release the hold. If that doesn't work, you may need to contact American Express customer service.
How to Dispute a Charge on Your American Express Card?
You can dispute a charge by logging into your online American Express account, navigating to the transaction, and selecting the "Dispute this Charge" option. Alternatively, you can call American Express customer service to initiate a dispute.
How to Avoid Large Authorization Holds?
While often unavoidable for certain types of merchants (hotels, rental cars), you can sometimes ask the merchant about their hold policy beforehand. For gas stations, paying inside with cash or a specific amount can sometimes prevent a large hold.
QuickTip: Pay close attention to transitions.
How to Pay Your American Express Bill?
You can pay your American Express bill online through their website, via the mobile app, by phone, or by mailing a check. Setting up automatic payments is often the easiest way to ensure on-time payments.
How to Increase Your Spending Power on an American Express Charge Card?
American Express charge cards (like The Platinum Card or Gold Card) don't have a pre-set spending limit. Instead, they have spending power that adjusts based on your income, spending habits, and payment history. To potentially increase it, maintain a good payment history, keep your income information updated with Amex, and use your card regularly and responsibly. For large purchases, you can sometimes use the "Check Spending Power" tool online or in the app.
How to Find Out If Your American Express Card Requires a Security Deposit?
Most American Express-branded cards do not require a security deposit. Secured cards are typically co-branded with other financial institutions (like USAA). When applying for any credit product, the terms and conditions will clearly state if a security deposit is required.
How to Get Your Security Deposit Back from a Secured American Express Card?
If you have a secured American Express co-branded card (e.g., USAA), your security deposit is typically returned when you upgrade to an unsecured card (if eligible) or if you close the account after all balances are settled. The exact process and timing will depend on the specific card and issuer.
How to Manage Pending Transactions that Don't Appear on Your Statement?
Pending transactions don't appear on your statement until they post. If a pending transaction never posts or is significantly different from the final charge, monitor your account closely and contact the merchant first. If unresolved, contact American Express customer service for assistance.
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