AMEX feeling the heat

[Anonymous]

I would say that the next few quarters will be very telling. It's undeniable that what once was a one horse race, AMEX rewards, is now surpassed in many areas. The difference between AMEX and other lenders is that it hits them particularly hard when things start to go against them. I remember reading an article awhile ago that 1 out of every 10 AMEX cards out there were Costco cards... investors were really shaken up for a bit after that fallout. Citi, Chase, BoA, Wells (albeit they haven't been doing so hot either) are at that "too big to fail" type banks that are so diversified that even if a particular program isn't performing well, it's not going to shake investor confidence. I just don't see that with AMEX. AMEX has its cards and savings but it isn't nearly as expansive as a Chase. Compounding it is a lot of everyday people keep things in house... BoA checking/savings = credit card convenience type thing. ... there are also a TON of cobranded cards out there or store cards that provide more value to everyday non traveling customers than an AmEX. How many people want a Plenti Card?

I wholeheartedly agree that the BCE/BCP are fantastic cards and are very popular with people who do have them, but if they are competing with other lenders offering massive sign-up bonuses, are they really going to get more new accounts? How many of those Costco/AMEX card customers ended up staying loyal once Costco split, how much catch up do they have to play?

I think that some of the "heat" revolves around the question how is AMEX going to step up its game and respond? ... Even though it's only a Green Card, I love Amex. They have been awesome about my random, big charges out of nowhere, which is why I want to stay with them and ultimately will regardless if they offer huge bonuses or not... I certainly don't think that they would ever go belly up, but I do think that the C-Suite needs to acknowledge that they are not what they were and if they want to remain HIGHLY competitive they need to start playing ball with their competitors... I don't expect 100,000 MR offer on a Green Card, but 10,000 MR points for new ED Card has been that way for months and months. CSR was handing out MASSIVE sign on bonuses, AMEX ran these ghost like, targeted promos that some people could nab and another's couldn't find. I think if AMEX was truly trying to grab as many new customers as possible they would have been hammering out promos to at least mitigate some of the new Chase/Citi/Disco promos.

[gdale6]

I still read printed material inlcuding newspapers, the local paper isnt even posted online. I saw some comments that banks cannot stay afloat giving 3-5% and I disagree, their earnings reports prove that, they still have hundreds of millions of card holders that earn no rewards at all and others that dont spend on their cards just to get that reward. 

[BronzeTrader]

---

@longtimelurker wrote:

---

@BronzeTrader wrote:

---

@longtimelurker wrote:

---

@Anonymous wrote:

---

They did lose a little. But there strategy will pay off.

https://www.reddit.com/r/churning/comments/5oucdq/the_economics_of_churning_who_pays_for_the_rewards/

---

OT, but there is a great table in the comments on that link showing income from interest vs interchange

         Bank                       Interest     Interchange

                                        revenue    fee revenue

American Express	$1.346B	$4.985B
Chase	$2.218B	$2.014B
Wells Fargo	$2.597B	$2.374B
Bank of America	$6.998B	$3.084B
Capital One	$7.821B	$1.572B
Citibank	$11.377B	$1.410B
Discover	$5.456B	$0.520B
Barclays	$2.148B	$0.231B

---

If we believe in those numbers, then it is Chase to feel the heat, not the AmEx feeling the heat. They are doing well. The new Blue lineup is going to draw some new and young generation. I've seen quite some people using the AmEx Blue cards.

---

Table was 3Q 2016.   The BCP/BCE came out several years ago, the ED and EDP by 2014.   So I don't think they are particularly "new" compared to some offerings from the other banks listed

---

Tell you something.

We have a minor. FICO from 730 to 785. Checking, saving, investment accounts etc. Credit history 2 years with AU. Self CC 6 months with $3k CL. Excellent payment history, 

Applied Chase Freedom Unlimited, rejected. Applied Chase Amazon, rejected. Both saying short credit history, or thin file. Then applied Discover, approved. Applied AmEx BCE, approved (though with $500 CL). So Chase does not even like young or common folks. It likes the people who enjoy Ritz, Fairmont and Marriott. But common folks buy more grocery than paying hotel stays. 

Chase is clearly missing the boat. When the youngsters graducate from college, their loyalty (if any) stay with AmEx and Discover. 

From what I know, AmEx has been very aggressive with the BCE/BCP line. It takes time to grow the CC portfolio...

[longtimelurker]

---

@BronzeTrader wrote:

---

@longtimelurker wrote:

---

@BronzeTrader wrote:

---

@longtimelurker wrote:

---

@Anonymous wrote:

---

They did lose a little. But there strategy will pay off.

https://www.reddit.com/r/churning/comments/5oucdq/the_economics_of_churning_who_pays_for_the_rewards/

---

OT, but there is a great table in the comments on that link showing income from interest vs interchange

         Bank                       Interest     Interchange

                                        revenue    fee revenue

American Express	$1.346B	$4.985B
Chase	$2.218B	$2.014B
Wells Fargo	$2.597B	$2.374B
Bank of America	$6.998B	$3.084B
Capital One	$7.821B	$1.572B
Citibank	$11.377B	$1.410B
Discover	$5.456B	$0.520B
Barclays	$2.148B	$0.231B

---

If we believe in those numbers, then it is Chase to feel the heat, not the AmEx feeling the heat. They are doing well. The new Blue lineup is going to draw some new and young generation. I've seen quite some people using the AmEx Blue cards.

---

Table was 3Q 2016.   The BCP/BCE came out several years ago, the ED and EDP by 2014.   So I don't think they are particularly "new" compared to some offerings from the other banks listed

---

Tell you something.

We have a minor. FICO from 730 to 785. Checking, saving, investment accounts etc. Credit history 2 years with AU. Self CC 6 months with $3k CL. Excellent payment history, 

Applied Chase Freedom Unlimited, rejected. Applied Chase Amazon, rejected. Both saying short credit history, or thin file. Then applied Discover, approved. Applied AmEx BCE, approved (though with $500 CL). So Chase does not even like young or common folks. It likes the people who enjoy Ritz, Fairmont and Marriott. But common folks buy more grocery than paying hotel stays. 

Chase is clearly missing the boat. When the youngsters graducate from college, their loyalty (if any) stay with AmEx and Discover. 

From what I know, AmEx has been very aggressive with the BCE/BCP line. It takes time to grow the CC portfolio...

---

My daughter just graduated from college.   Has the BCE, SM, Citi Forward, Cap One QS,.  First card now she is making real money, Chase CSR.   Her sister, three years  out, who had the same cards at college, just got CSR, moved CSP to FU, Blispay and one of the Chase United cards.   So, small samples aren't all that informative!

[BronzeTrader]

---

@gdale6 wrote:

I still read printed material inlcuding newspapers, the local paper isnt even posted online. I saw some comments that banks cannot stay afloat giving 3-5% and I disagree, their earnings reports prove that, they still have hundreds of millions of card holders that earn no rewards at all and others that dont spend on their cards just to get that reward. 

---

Agreed. But Chase is not showing the $$ with its CC portfolio. So its customers do not carry, or carry less balances than Citi and Discover customers. We would think Chase makes tons of $$ from both CC portfolio (interest income) and interexchange (swipe fees) income. But It is lagging with the interest income.

[BronzeTrader]

Also, I work in the banking industry, though not credit card side. But I have a good understanding of the CC business. 

[mjb59463]

The only thing keeping me with Amex as of now is their Delta card. Otherwise, the rest of my card usage falls to Chase and Visa.

I fly only with Delta and the card has been useful in earning MQM's and miles.

If Chase could ever steal Delta away, I'd drop AmEx in a New York Minute.

[TheVig]

The magnetic stripe on my green card recently died. And I mean died. It was like it was never there to begin with. Chip was fine though. I call Amex on a Saturday morning to order a new card. I fully expected to have to wait a week for the new one to arrive. Nope. Without asking the rep said I would have a new card tomorrow. I said but tomorrow is Sunday. She said you will have it Sunday. Sure enough, Sunday morning around 11am, a courier was at the door with my new card. I was not charged extra for that expedited service either. With that said, Amex is still the king of cards in many respects for me.

[Anonymous]

Vig i agree, customer experience has been top notch from them. I can't say their cards are all the best, but I have never been treated so well by any customer service anywhere else.

[Anonymous]

My personal opinion is that AMEX cannot go punch for punch with offers. The capital is not there for them to back them compared to juggernauts like BoA, Chase etc...

Chase certainly hit its target as far as attracting new customers with the CSR, 100k signup bonus was shut down. But think of it this way, Chase is still doing this well despite of how picky they are... 5/24, they want at least 12mo AAoA (I know it can be YMMV), an apparent blacklist on par with AMEX...

They're holding back the floodgates on themselves, but if they chose to loosen up I think AMEX staying status quo and not really trying to be dynamic and innovative is really going to have an impact with the exact market it is trying to reach. Wealthy, affluent people will always carry an AMEX among other cards... but myself? If Chase said to me, "here's a card, spend 4,000 in 3 mo and we will give you XX.XX"- my AMEX and Cap one aren't seeing a whole lot of action for that time, so they lose the trans fees...

Chase as a broader picture is going to keep issuing card sign-ups until the economy tanks again... there's a lot of logic behind big banks using CCs as a way to generate income. My mother and I were talking today about this post...she's a loan originator... in her opinion banks stand to gain more by giving these "rewards." Avg. debt being carried on cards is up so APRs are generally offsetting any rewards given out. And on the flip side, given how much other types of loans (i.e. Mortgages) have been over-regulated since '08, banks want to generate more income from their CC side