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Card Networks Like Visa and Mastercard Don't Take Credit Losses. American Express Does. Here's Why That Matters for the Stock.

The premium card company's stock, owned by Berkshire Hathaway, has outperformed the S&P 500 index in the past five years.

  • Visa and Mastercard don't issue consumer cards, avoiding credit risk
  • American Express operates a closed-loop system, processing payments and issuing cards in-house
  • Amex's higher exposure to credit risk makes it more vulnerable to economic downturns

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