Clark Howard

eBay ditches American Express: What’s the Best Credit Card Alternative?

If you use an American Express credit card to make online purchases with eBay, you soon will need a different payment option.

Amid a disagreement over processing fees, the popular online auction retailer recently announced that it will stop accepting American Express as a payment option this summer.

This means online shoppers who enjoy the benefits of a card like The Platinum Card® from American Express will need to use a different rewards credit card for their eBay purchases.

In this article, we'll look at what's going on to cause the rift between American Express and eBay as well as offer some alternatives for maximizing credit card rewards with your eBay purchases.

eBay Announces It Will No Longer Accept American Express Payments

Beginning August 17, 2024, eBay will no longer accept payments via American Express.

The main reason for this change? A disagreement over processing fees.

Money expert Clark Howard warned that disagreements such as this could arise this summer as a result of the settlement of an antitrust lawsuit over credit card swipe fees. The fallout could be so drastic that he is prepared to swipe his debit card!

On June 5, eBay notified its customers of the upcoming change with the following email message:

"Effective August 17, we'll no longer accept American Express as a form of payment on eBay since we have been unable to agree on terms that are acceptable to eBay. You'll still be able to use a wide variety of credit and debit cards such as Visa, MasterCard and Discover, and other payment methods such as PayPal."

This statement did not sit well with American Express. It responded with a strongly worded message that accused eBay of being inconsistent with their stated goals and also publicly called out the volume of transactions that eBay actually accounts for in the AmEx portfolio:

"We are disappointed that eBay made the decision to stop accepting American Express Cards as of August 17th, 2024. By doing so, they will limit customers' payment choices and take away the service, security, and rewards that customers value when paying with American Express. Our research tells us that in the US the cost of acceptance for American Express is comparable to what eBay pays for similar cards on other networks. We find eBay's decision to drop American Express as a payment choice for consumers to be inconsistent with their stated desire to increase competition at the point of sale. Additionally, eBay represents less than 0.2% of our total network volume. American Express Card Members can continue to use their Cards with millions of merchants around the world."

Which Credit Cards Should You Use on eBay Instead?

So, if American Express is out, which credit card should you be using for your eBay purchases instead?

As eBay noted in its email to users, you’ll still be able to use cards that are processed by Visa, MasterCard or Discover. So, the options to pivot are plentiful.

There is even an eBay Mastercard® that has no annual fee and offers enhanced rewards for eBay purchases. But the card does not make any of our "best" credit card lists at because it does not have a great rewards menu for purchases away from the online retailer's ecosystem. You'd likely need a very high volume of eBay transactions to consider adding this one to your wallet.

One option that — until recently — I would've pointed customers to is the PayPal Cashback Mastercard®. This one gets unlimited 3% cash back on purchases made via PayPal, which has long been a prominent payment method on the eBay platform.

However, that card recently announced that it will be reducing its non-PayPal rewards from 2% to 1.5% cash back. So, that one may not be as attractive to new applicants as it might be to someone who already has it in their wallet.

A “safe and steady” alternative to an AmEx card would be using a 2% cash back credit card on eBay.

Clark likes to recommend the Citi Double Cash® Card for its simplicity, and Team Clark believes the Fidelity® Rewards Visa Signature® Card is a great option for putting the 2% cash back to work as an investment.

If you're willing to join a credit union, you could extend your everyday rewards to 2.5% cash back via the Alliant Cashback Visa® Signature Card.

How do you feel about this American Express news? We’d love to hear your thoughts in the community.

The post eBay ditches American Express: What's the Best Credit Card Alternative? appeared first on Clark Howard.

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