I am completely stumped on this journal entry.

How would you journalize

"Recieved $3325 from American Express Co. after a $175 collection fee had been deducted"

I know you would debit cash for 3325 and debit credit card expense for 175, but what account would you credit for 3500?

Not sure, but I believe it would belong to the Accounts Receivable.

Yes, it would be accounts receivable. If American Express owes you money from credit card charges, that is no different than when anyone else owes you money. And that is accounts receivable.