I think AmEx is aggressively trying to take a greater share of the credit card market (usage) and that is reflected in how they market their cards today. Based on recent reports AmEx usage is growing in the share of the finite complete market.
http://www.businesswire.com/news/home/20120222006974/en/American-Express-Moves-MasterCard-U.S.-Credi...
AmEx was "born" as a business card which was also known as a Travel & Entertainment card, much like Diners Club or Carte Blanche. These cards were not designed as general usage credit cards, they were charge cards that had to be paid in full every month. Typically expense account cards, many times in a company name too. I don't know what happened to Carte Blanche, but Diners Club was purchased by CitiBank and then after a few years converted to a MasterCard, both are gone now I believe. Diners Club did have a "pay over time option" credit line attached to it where you could exercise a credit extension voucher with your statement, but the general idea was to pay the account balance in full with every statement.
American Express grew to the largest T&E card by offering just charge cards, then in the late 1980's AmEx added the Optima Card which was a credit card with a credit limit, followed by their Blue Card which I think was called "Open" also a credit card. The most common AmEx was the Green card, then when your spending increased you were invited to upgrade to a Gold Card at a higher AF, but really very little difference from the Green. In the late 80's (1990-ish) AmEx came out with their Platinum Card which was invite only after you averaged $50,000 or so a year on the Gold Card. The Platinum card was a much higher AF ($300) and you could not apply for it, you had to be invited and qualify through usage history. After 2 years or so using the platinum card you were offered a credit line in addition to the regular charge PIF terms, much like what Diners Club offered. Platinum cards were rarely seen in the 1990's. Because AmEx was marketed as a T&E card, personal income and spending was not really a big factor since typically "business" backed these accounts. Today AmEx is considered a general usage card and they market their products as such. In 1990, 64% of our U.S. billings came from the travel and entertainment sectors and 36% came from retail and other sectors. That proportion has now been more than reversed. In 2011, only 28% of U.S. billings came from the travel and entertainment sectors. ****
Over the last 5 years or so AmEx seems to have taken the attitude that not only are they going to be a general usage product, but Annual Fees are good so they want every card member to carry 2 or 3 or 6 different AmEx cards (including their co-branded products such as Costco, Delta, Hilton, etc). Today we have entry level AmEx cards with a $3-500 hard limit (sub-prime stuff), we have "Pre-Paid" Amex logo cards and credit limits that triple after 90 days! The rainbow of colors and flavors vary mostly by what they charge as far as annual fees, and yes everyone will qualify for a Platinum card either at once or after a year of proper handling of a AmEx starter card, just as long as you pay the $450 AF. As of 12.31.2011 AmEx had total worldwide Cards-in-force of 97.4 million (including Cards issued by third parties).****
If you do the math the amount collected just for Annual Fees is staggering every year at 98 million X AF.
The marketing AmEx has used over the last 10 years or so has exploded the usage and number of AmEx cards and the prestige of AmEx has been just as strongly marketed. When Amex was a business based T&E card you rarely saw anyone under 30 carrying even a green card, today if you qualify for a MasterCard at 18, they want you to have an AmEx right next to it and by 21 you'll be sporting a Platinum card.
Charge off and default rates for AmEx are lower than MC/V even though the entry standards are very low today compared to 20 years ago. I think this is partly due to the prestige factor and partly do to the fact that members generally Pay for the "privilege" to carry an AmEx meaning they have a vested interest in the card of sorts. I know that as a group AmEx members are higher income and tend to have greater average sales based on disposable income. If you look at the over all picture on how AmEx is expanding today to almost anyone with a pulse as a general purpose card, I think you are going to see their market share continue to increase. I also think the the "prestige" of lower charge offs and defaults is going to back fire with their lower issue standards. Of course AmEx makes a ton of money from their AF's and they tend to watch their members closely with monthly soft pulls and their Financial Review process.
I admit that I carried an AmEx from 1978 until 2005 (Platinum 1990 through 2005). AmEx never asked me for a financial review, but if they had I would have told them where to stick their cards. I also had an AmEx Merchant Account from 1973 through 2008. The marketing Amex uses is one of the best out there and creates loyalty with their card holders. Today's AmEx is not the same product it was when it was a T&E product and that is good for AmEx because they evolved with the market where Diners Club and Carte Blanche didn't.
Today you qualify for AmEx Platinum after one month? Or Get a Green Card and a Gold, why not have two? It's all by design to extract more AF's up front, thank you for being a loyal AmEx member since 2012.
PS - to all the Amex fans, these comments are based on my personal experience with AmEx and observations of their marketing. I am not "hating" on AmEx so please don't read it that way. I also know I ignored the 1999 issuing of the Centurion Card - by design.
**** Source - 2011 AMX SEC Annual Report filing.
