No, the bank that issues you credit will pay the merchant in a few days after the merchant charges your credit card account. The bank issuing your credit card is the one that extends credit to you, however, there is usually a few days between the merchant charging your account and the bank sending the merchant the money.

Afterwards, if you do a chargeback, the bank will yank back the funds from any other amounts the bank owes the merchants, but if the merchant has enough proof the cardholder participated in the transaction (aka, swipe and sign, or chip and sign, or use of CVC code online), then the bank will give the money back to the merchant. The bank still takes $30 or so from the merchant as a fee for getting a chargeback though, but I'm sure that amount and terms vary from merchant to merchant, depending on their purchasing power.

This is interesting. I'd think the card-issuing bank has incentives to delay the payment as long as possible though. I'd imagine 30 day is not that bad of a term. Why is that not the case? I mean what is the merchant going to do? Stop accepting American Express?

A friend told me about this case where a vendor charged his American Express twice. They called the vendor about this and the vendor yelled at him so he called American Express for a charge back. Apparently, American Express went in and did a charge back for the whole amount. I am glad they did the charge back but it must suck for a merchant if the charge was legitimate and the customer was being a jerk.