Commercials

[LS2982]

@Open What exactly is this suit between the DOJ and AMEX?

[LS2982]

@FR Sweeeeet!!

[Anonymous]

Commercials are usually to get the word out on something. I would guess that Amex thinks they are a luxury or exclusive product. This would then fall into the same reason private jets are not advertised, luxury products usually don't need it. Just a guess.

[Anonymous]

I admit I have thought about AMEX from time to time in my credit card quest. Mostly for the wow factor and prestige. About a month ago I went to a basketball coaches luncheon for my university at a local restaurant. Sitting at a table with other people when the bill came and we all put down our cards I used my Discover more, and the other two people at my table used a BoA debit card and a southwest visa card.

I thought "How cool would it be to impress somebody by plopping down a nice shiny gold card with a roman guy wearing a helmet on the front of it?"

But in all seriousness as a single guy who spends 10-12k a year I have done the math and looked at MR parters and I get a much better value elsewhere.

First of all I wouldn't earn enough in MR points at my current spending level to make a 175 dollar AF worthwhile. I only travel maybe 2 or 3 times a year so the 450 AF of the platinum wouldn't be worth it since I wouldn't really use the perks often enough, and the MR point earning rate wouldnt offset the AF.

My airlines of choice are United, and I am not opposed to flying southwest or american. Since Delta is the primary MR parter for domestic flights, and there are only one or two delta flights a day to Atlanta from my home airport, which is on the other side of the country. It is not convienient to make delta my primary airline, and their miles are notoriously hard to redeem. For hotels I only stay in the one with the best price at the best location.

For the Zync or Green using MR express points are what? 1 cent per point at most? I can get a better return from venture miles, an airline co branded card of my choice, or straight cashback elsewhere.

If I was a big spender and traveler the Gold or Platinum card would be my best bet though, and if I ever reach a point in my life where I spend greater than 30k a year a gold or platinum will definitely become my primary card.

[Open123]

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@LS2982 wrote:
@Anonymous What exactly is this suit between the DOJ and AMEX?

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The DOJ is suing Amex for allegedly engaging in anti-competitive practices, such as charging merchants a higher fee and prohibiting them from offering a discount for using other cards or cash.

Visa/MC/Disc have settled with the DOJ acquiescing to their demands to allow merchants in their agreement to freely offer discounts for using a different card or cash. Amex refused to settle and insists that if merchants fly the blue box Amex banner, the agreement stands that a discount cannot be offered for using a different form of payment.

So, the issue be decided in court.

[tubesock]

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@CreditScholar wrote:

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@FrugalRican wrote:

This forum is a great example of why AMEX doesn't need memorable commercials.

Look at how most of the forum itself pines over the elusive AMEX card.

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I still think Amex is more reputation and hype than anything else. They have some great products, but they're not the only ones in that catgegory. Still, they seem to have a very large following. I think they're relying too heavily on their past reputation. Other companies are catching up, but many in the general public haven't realized this.

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AMEX haS stood the test of time and I'm talking long before CC's even existed. In the stone-age, I did customer service for Amex. The training for other clients was 1 week back then but Amex was a hefty 3-4 weeks. They taught me everything about this company from the Pony Express days, LOL! But as poor as I was then, I knew that one day, I wanted that card.

I gave great CS and their Customer Service is stellar to this day. I've had my first card with them 3 years now and they do not disappoint. I call it as I see it and Amex is the BOMB.COM! IMHO

[LS2982]

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@tubesock wrote:

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@CreditScholar wrote:

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@FrugalRican wrote:

This forum is a great example of why AMEX doesn't need memorable commercials.

Look at how most of the forum itself pines over the elusive AMEX card.

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I still think Amex is more reputation and hype than anything else. They have some great products, but they're not the only ones in that catgegory. Still, they seem to have a very large following. I think they're relying too heavily on their past reputation. Other companies are catching up, but many in the general public haven't realized this.

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AMEX haS stood the test of time and I'm talking long before CC's even existed. In the stone-age, I did customer service for Amex. The training for other clients was 1 week back then but Amex was a hefty 3-4 weeks. They taught me everything about this company from the Pony Express days, LOL! But as poor as I was then, I knew that one day, I wanted that card.

I gave great CS and their Customer Service is stellar to this day. I've had my first card with them 3 years now and they do not disappoint. I call it as I see it and Amex is the BOMB.COM! IMHO

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BOOM!!

[scottwagnon]

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@CreditScholar wrote:

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@Open123 wrote:

AmEx is definitely cashing in on it's reputation of old and the prestige attached to it with the old guard. 

I sense they've been trying to cultivate the newer generation because they sense once the existing cardmembers retire or pass on, this prestige will likely plumit.  The "next" generation (Gen X) are mostly Visa/Mc users who all found AmEx disappointing during the 90s during the time of the Boston Fee Party.  I think Amex senses they likely won't win this generation over, and have opted instead for Gen Y with social media, twitter, and facebook.

In my view, Amex's bread and butter cardmembers are all getting long on the tooth.  They will need "new" blood very soon, especially with other issuer's closing the gap very quickly, such as Chase.  Even Citi has rumored to be adding BA/Kris Flyer to their underwelming Thank You program.

Aside from the perceived prestige I place on an Amex card (all those commercials in the 80s sure worked on me along with seeing my father use the card), now that I've examined Chase's UR Rewards with a closer eye, I've got to admit the Ink Bold is a better value than any of the Amex charge cards.  For $95 fee, the Bold offers 5X rewards on spending categories with no limit on overall spending and no forex fee.  The UR programs appears to be improving and expanding while the MR program appears to be stagnant.

I think Amex has decided the commericals aren't effective with Gen X, but will instead try to reach directly to Gen Y, based on their bitter experience with this generation during the 90s.

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+1. I think you're right on target with their prime clients "getting long in the tooth".

The major problem is that Gen Y simply doesn't have the old guard's earning/spending power, nor will they ever. In reality, Gen Y will be the first generation in modern US history to have a lower standard of living compared to the generation before it. With crushing loads of student and consumer debt, a poor global economy, dim prospects and a lack of job stability, it'll be hard for them to amass the same kind of wealth.

This might also explain why they're diluting their lending standards and expanding their client-base. If they want to maintain their profits, they'll need to gradually shift from relying on margins to relying on increased volume.

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i couldn't have said it better. creditscholar. iyou always post well thought out messages as i favor reading what you have to say. i feel you are very mentally sound, and that is what we as a society cant seem to get enough of. +1 to you.

[scottwagnon]

this has got to be the smartest thread i have ever read on this site. thank you so much as i find myself very much focused for more than a minute and actually reading the entire thread. it has so far been very enlightening.

i am also a late gen x, (1976) and i so concurr with the disturbing economic disparity occuring from those born in the mid 70s to the early 80s. however i am one of those that did not catch the last train out (mid 90s) so im there with the gen y group. the only difference is that i was paying attention and did not by into the rap of accepting that i need to have 100k in student loans so i can be among those that are in the middle class, or shame on me. i do not make much but i am not in the hole by 100k. that kind of makes me 100k richer than those in gen y that thought they needed to do so or shame on them.

[CreditScholar]

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@scottwagnon wrote:

this has got to be the smartest thread i have ever read on this site. thank you so much as i find myself very much focused for more than a minute and actually reading the entire thread. it has so far been very enlightening.

i am also a late gen x, (1976) and i so concurr with the disturbing economic disparity occuring from those born in the mid 70s to the early 80s. however i am one of those that did not catch the last train out (mid 90s) so im there with the gen y group. the only difference is that i was paying attention and did not by into the rap of accepting that i need to have 100k in student loans so i can be among those that are in the middle class, or shame on me. i do not make much but i am not in the hole by 100k. that kind of makes me 100k richer than those in gen y that thought they needed to do so or shame on them.

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I'm really enjoying it as well, and I think I'll be sad when it's finally finished.

GenY has several severe headwinds that will hamper its ability to increase its wealth/spending power, and unfortunately education loans are at the top of the list. For GenY specifically, I think the hangover from the current student loan bubble will be more severe and longer lasting than the great recession will be.

At the very worst, someone deeply in debt with negative equity up to their eyeballs can simply delcare bankruptcy and take the 10 year hit on their credit. They might have to completely start over, but there is a finite ending point. Student loans on the other hand are virtually impossible to discharge, and will literally follow people to the grave. There is no finite ending point here.

Making matters worse is that it's not just about repaying the principle that they borrowed, but also about repaying the accrued interest as well. In severe cases, the interest on the loans may be so high that it will consume all of a graduate's meager earnings while the principle remains untouched. People always talk up the benefits of  compound interest, and this is very similar but in reverse. It's like having a 401k-type growth pattern, but instead of savings for retirement it's debt. It just grows and grows.

The other major issue is that a larger proportion of students are studying degrees that have very few job prospects. In most cases, degrees in the arts, humanities and social sciences offer very little in the way of tangible, marketable skills. Sure a liberal arts degree teaches you how to write, communicate and critically think, but given the current economy employers can afford to be especially picky. All qualified applicants will already be assumed to have those skills. Then the employers will say, "what other skills and experience do you you have? Give me examples and quantify it, and how will it benefit this company?". At that point many of those graduates will be at a loss to come up with an acceptable and truthful response. Most of the job growth currently is in math and science-related fields, or the so-called STEM jobs. Instead of meeting that demand, most graduates are getting degrees that are not in this sector.

Culture isn't helping this either. In the 1980s we had a push for science achievement, with space being something that plenty of children were eager to learn. Shows like MacGuyver were still on TV. Much of this was driven by the still active Cold War, but nonetheless it shaped cultural and public opinions regarding educational priorities.

Shift forward 3 decades and the pendulum has swung the other way. The arts has now taken over center-stage, with music, dance and other creative areas having preference. While this isn't necessarily bad for culture, it does influence the kinds of degrees students choose to pursue and their subsequent earning power after graduation. It doesn't take a genius to figure out what then happens to the average earnings of GenY. More people trying to pursue sectors with fewer opportunities means higher unemployment, more people forced to work outside their chosen field of study, and the lucky ones who do get jobs in those sectors will see their incomes surpressed due to higher levels of competition.

These are the headwinds Amex faces with regards to GenY, as does any other lender who is courting this particular cohort. I think Open123 was completely correct when he said that we're about to see an explosion of wealth disparity. It's been happening for quite awhile, but it's much more overt since 2007. I think Amex is in for some rough times ahead, regardless of whether or not they win against the DOJ. Unfortunately in terms of finances, GenY will likely be floundering for decades to come. If that's who Amex is pinning their hopes of survival on, I don't think highly of their chances.