American Express reported an 85% slump in quarterly profit as spending using its card collapse
https://t.co/RQuhCDaFst https://t.co/leaEuXkLQX
"The compy said its high exposure to travel and entertainment (T&E) industries, which have been ravaged by the COVID-19 pandemic, has led to a sharp decline in its overall spending volumes, though some other sectors are looking up."
And yet, they tighten up on apps and limit increases.
@Brian_Earl_Spilner wrote:And yet, they tighten up on apps and limit increases.
Wouldn't you? 
SUBs cost money and if your customer base ain't spending like they used to... who, rationally, is the person applying for your card?
Not likely someone ideal from a lender standpoint.
I don't think anyone knows what the market is going to look like, the longer COVID goes on the longer it has the chance to make real changes in behavior. It's possible there is a drunken fiesta of a spending spree by the mythical average consumer when this lifts one way or another... but it might not either and then where is Amex? There is more and more signs that business travel isn't going to come back like it was, and might not ever: less office spaces in use to go to, and more and more companies are finding remote work is just fine.
My own big giant company apparently accelerated plans that were clearly in the works and closed a bunch of offices down, they aren't likely ever coming back though in our case there are other structural reasons for this, but I would note we used Concur aka Amex Travel and that revenue is gone for Amex right now.
Out of all the credit card issuers in this world, I would not want to be Amex right now. Out of the majors Synchrony and Cap 1 were probably the two largest risks for default, but Amex is the biggest risk to never regain their former stature or revenue imo.
@Revelate wrote:
@Brian_Earl_Spilner wrote:And yet, they tighten up on apps and limit increases.
Wouldn't you?
SUBs cost money and if your customer base ain't spending like they used to... who, rationally, is the person applying for your card?
Not likely someone ideal from a lender standpoint.
I don't think anyone knows what the market is going to look like, the longer COVID goes on the longer it has the chance to make real changes in behavior. It's possible there is a drunken fiesta of a spending spree by the mythical average consumer when this lifts one way or another... but it might not either and then where is Amex? There is more and more signs that business travel isn't going to come back like it was, and might not ever: less office spaces in use to go to, and more and more companies are finding remote work is just fine.
My own big giant company apparently accelerated plans that were clearly in the works and closed a bunch of offices down, they aren't likely ever coming back though in our case there are other structural reasons for this, but I would note we used Concur aka Amex Travel and that revenue is gone for Amex right now.
Out of all the credit card issuers in this world, I would not want to be Amex right now. Out of the majors Synchrony and Cap 1 were probably the two largest risks for default, but Amex is the biggest risk to never regain their former stature or revenue imo.
No, I wouldn't.
I can understand being more critical of new apps from new people, but denying new cards to people with established relationships and outright getting rid of recon despite those histories is ridiculous. 😉 If I'm spending upwards of $3k a month, every month for the last 2 years, including during the pandemic, and paying in full, why are they gonna throttle my spending power? They're really gonna deny me new credit even though I've worked 15 years for an essential business that is posting better earnings than last year, and has stock heading for an all time high, forget the fact that business is so booming everyone is getting a raise (4% for myself)? Sure are, because I can't recon and tell them that. And even if I could, they're not hearing it because corporate sent out a memo saying, "no reconsiderations during the pandemic".
Then you have what @Remedios posted, they're not really trying to encourage spend. They're coming across as having this mentality of "well, our meat and potatoes is screwed because of this pandemic, we better just make sure we don't lose any more money" instead of trying to encourage spend to make up that lost revenue, or increasing spending power for those that can.
Then, there's your own statement. If business travel and spend isn't coming back soon, and possibly ever at the previous levels, and that's really the bulk of Amex's income, they should be evolving their products, even if temporarily, to ride out a possible year of this, or more. If they can't, that makes them a one-trick pony and who knows if they can really recover from it to previous levels.