Named for its early express shipping services, American Express is a credit card and bank holding company. As of 2025, American Express was the second-largest credit card issuer in terms of US purchase volume and had a market capitalization exceeding $200B.
American Express was founded in 1850 when Henry Wells, William Fargo, and John Butterfield decided to consolidate their rival express shipping rail services. By 1862, American Express operated more than 10,000 miles of railway from the East Coast into Minnesota and Missouri. Over time, American Express expanded its rail services into accompanying travel services, like traveler's checks and money orders, until it began focusing entirely on its financial business in 1918.
Since launching its first charge card in 1958, American Express has become known for offering expansive perks and rewards to cardholders—from access to airport lounges to dining credits— in order to attract affluent customers.
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American Express cards charge high annual fees, but also offer significant rewards and credits. It's just one way the company targets affluent customers who spend higher dollar amounts per transaction and tend to have more transactions than the average cardholder. This strategy decreases the company's risk, since it actually offers credit instead of just acting as a card network.
Henry Wells and William Fargo formed Wells, Fargo & Co. two years after American Express was created. Wells and Fargo saw an opportunity to expand the express delivery service from the East Coast and Middle America to the West Coast. The two initially asked the American Express board to expand operations, but the board declined, so they decided to create their own company. Today, Wells Fargo is among the top four largest banks in the US.
Money orders were American Express' first move into financial services. USPS launched its money order service in 1864 as a way for Civil War soldiers to send money back home. Between the 1880s and 1920s, immigration into the United States surged;the American Express money order service gave immigrants a way to send money to family members living in other countries.
The original American Express charge card was made of purple paperboard and allowed customers to book travel. Unlike credit cards, the card's balance had to be entirely paid off each month. When the card first launched, 250,000 customers used it, and 17,500 companies had agreed to accept it.
Unlike most credit card companies, American Express issues credit cards and processes payments—something called a closed-loop model. By offering both services, American Express profits from both interest and interchange fees, and also has access to more data on how customers spend their money so it can offer better perks.
Card issuers give customers credit cards, set rate limits, and collect payments. Card networks, on the other hand, dictate where credit cards can actually be used by managing relationships between the network and merchants. These networks make money on interchange fees, which merchants pay to accept a specific card network at their stores.
Among the major credit card companies in the US, American Express had 19.50% of the market share in 2025. Visa and Mastercard had 52.20% and 24.90%, respectively, and Discover had the smallest market share of 3.50%.
American Express cardholders tend to spend more money per transaction than other credit card users, which makes the interchange fees merchants have to pay to accept American Express cards worth it while incentivizing other companies to pay the interchange fee as well.
Since its founding in 1850, American Express has evolved from a mail delivery service to a multinational financial services company. Small additions to the company over time, such as taking money orders and inventing traveler's cheques, were key drivers of the company's transformation.
The Centurion card debuted in 1999 and created the trend of credit card companies' most exclusive cards being black. Centurion cards are technically invite-only, but you can fill out a form to request being considered for the card. Despite a $5K initiation fee and a $5K annual fee, some say the benefits of the black card aren't much different or better than the American Express Platinum card.
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