Fascinating Data About American Express and Chase

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American Express losing Costco set off a chain reaction that rocked the credit card world. American Express moved quickly to re-up their co-brand deal with Delta (which was second largest to Costco, Starwood is third). They set a new high price benchmark, that defined terms for Chase renewing United and Southwest and ultimately led to expected higher revenue from a new Citibank-Barclaycard deal with American Airlines.

American Express went from figuring out how to grow post-Costco, to cost-cutting, to investing in products and cardmember acquisition again.

Meanwhile Chase got aggressive bringing back the 50,000 point bonus for the Chase Sapphire Preferred Card, introducing the premium $450 annual fee Chase Sapphire Reserve Card (in contrast, Sapphire Preferred is $0 the first year then $95). And introducing the Chase Ink Business Preferred Card which lets you earn an 80,000 point signup bonus.

The American Express Platinum Card now lets you earn a 60,000 point signup bonus, comes with an Uber credit up to $200 in value each year, and is produced as a metal card — on top of existing club lounge access and elite status benefits.

Citi likely overpaid to be able to offer their strong new Costco Anywhere Visa. American Express wouldn’t match the deal, which made sense but set off a new level of competition and laid bare the issuer’s own weaknesses.

In a New York Times piece on Friday about American Express brand positioning weakness with affluent millennials — suggesting that American Express has married itself to the kind of consumption versus experiences that millennials don’t relate to (that millennials prefer the humble brag to conspicuous consumption) — some interesting data points about the American Express and Chase card businesses are shared.

  • American Express has more than 109 million cardholders
  • The number of Amex cards in use “declined by almost 18 percent” last year. Ouch. Of course just over half that should be accounted for by losing Costco.
  • American Express revenue is off $2 billion compared to 2014.
  • Over 1 million people have signed up for the new Chase Sapphire Reserve Card

About Gary Leff

Gary Leff is one of the foremost experts in the field of miles, points, and frequent business travel - a topic he has covered since 2002. Co-founder of frequent flyer community InsideFlyer.com, emcee of the Freddie Awards, and named one of the "World's Top Travel Experts" by Conde' Nast Traveler (2010-Present) Gary has been a guest on most major news media, profiled in several top print publications, and published broadly on the topic of consumer loyalty. More About Gary »

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Comments

  1. This is not “fascinating”. You cribbed this from a New York Times article that came out this week and you used it to include a bunch of credit card links. The only facts you include are buried at the bottom of this “article” and you don’t even link to the original source material.

  2. WTF? Gary links to a story and shares key nuggets from it and offers interesting context, did your [removed personal attack on another commenter -gl]

  3. Ultimately led to expected to “expected” higher revenue for AA with the split deal… Isn’t that revenue expectation already tanking? 220 million less in 2017 (330 vs 550 estimate)….

    Split deal was a bad idea from the get-go… While the notion that competition between two banks is supposedly good for the customers – this is patently false at least for those who travel extensively on AA.

    Now in order to really get a comprehensive set of benefits I have to have two different AA credit cards with different benefits rather than one strong card (i.e. DL AMEX Reserve) that I can use for almost all purchases without having to “plan” my spend. I don’t have time for that.

    Of course – this arrangement with the other stuff AA did has shrunk their potential revenue and they failed to maximize their potential in the current credit card macro environment that was sign tilted significantly in their favor.

  4. American Express thinks they know and understand everything about customers. Amex Platinum Card is overpriced, especially with the increase in the annual fee to $550. Are the benefits worth it? That is very debatable. I’ll give an example. The free companion with an international first class or business class ticket. Yes the list of airlines is huge. But the fares are full price. One could find a business class tickets for 2, for less than Amex is offering. Amex’s response to this is, that it is meant for business travellers who’s company is paying for the full fare ticket. Yet, most companies do not allow business class travel. Can you use enough of the benefits to get $550 worth of value? Possibly. But make the comparison to Chase Sapphire Reserve with a $450 annual fee, of which $300 is automatically rebated with any travel purchase. Yeah, Amex has $200 for airline fees, but it is only one airline.

    I think Amex needs to come up with some, everyday usable benefits that make the $550 worth it. The Platinum Card doesn’t make sense for every traveller. Whereas the Chase Sapphire Reserve offers more value upfront, and is just as prestigious.

  5. C’mon Gary, there are many people who want to read the offensive comments and insults.
    You’re a total [removed for insult.] for being such a [removed for insult]

  6. I wonder if the premise of the article is correct. With the mileage multiplier’s that Chas and Citi offer on dining, travel and, in Citi”s case, entertainment, a compelling case can be made for using them rather than Amex without having anything to do with millennials psyches.

  7. I have carried an Amex Platinum card since 1969. Up until recently, that was the only card that I used except for the occasional need for a Visa card.
    Frankly, it pisses me off to see 100000 mile or even 60000 Mile sign up offers from Amex. Amex offers zip rewards for loyal users carrying that card for so many years.
    I am thinking to cancel my cards and wait a year to reapply.

  8. @Gerald Hansen

    Amex introduced the Platinum Card in 1984. The Gold Card came out 1966. You have been a card member since 1969, but probably not a Platinum one. But if you never received a sign up bonus for your Platinum Card, there is a good chance if you applied again, you would receive a bonus. Which has no down side for you, if you don’t get a bonus. Sometimes the Gold Card has a better bonus than the Platinum.

  9. AMEX has laughable customer service and has been way eclipsed by Chase in that department. I have, over the last 45 years, made the trip from Green to Gold to Platinum to Centurion and back to Platinum – just cancelled it in favor of the Platinum Business card. The Blue Business card gives 50% rebate on points for your favored airline when using points as cash and the agents tell me it can take 8-12 weeks to get the points back! WTF? In fact, it took all of two days but really – sounds like a great benefit but nothing you can’t get from a Capital One – both end up as two points per dollar. The decline in Centurion benefits came at the same time as they increased the fee. They seem to think the public still craves AMEX for its exclusivity but in my experience, no one cares anymore. I see them shrinking more and more. Their model just doesn’t shine anymore.

  10. @Gerald Hansen…

    if you want a sign up bonus, apply for the Mercedes Benz co branded plat card, same benefits.

    and then cancel your existing card.

    @Gary, i wld delete the abusive texts, and not even worry about posting them, and just block the perpetrators. Life’s too short.

  11. That’s definitely an interesting article/scoop from The New York Times. It describes what most card holders have instinctively felt for some time already, that Amex is losing touch with their desired customers/market.

    It’s face-palm sad that Amex hasn’t figured out that what they need to incentivize is BASIC, EVERYDAY SPEND on their Platinum card. In place of (relatively) rare, big-ticket airfare purchases or tricky Uber monthly credits, Amex should drop the signup bonus, $200 incidentals travel credit and $15/mo. Uber credit; and instead offer 5 MR points per dollar on all restaurant spend, 4 MR points per dollar for all airline/hotel spend, 3 MR points per dollar for groceries and gasoline, and 2 MR points for all other spend. 5X points on restaurant spend is the key for Amex Platinum, as it would allow them to beat CSR’s 3X points. And as I understand it, American Express charges a larger merchant fee than Visa/Mastercard do, so Amex has a chance to give their higher fees back to consumers.

    Because of CSR 3X restaurant bonus, it is the top card in my wallet which I pull out on weekdays at lunchtime, while my nice metal Amex Platinum card stays in my drawer at home.

  12. @Gary continues to deceive: “Meanwhile Chase got aggressive bringing back the 50,000 point bonus for the Chase Sapphire Preferred Card, introducing the premium $450 annual fee Chase Sapphire Reserve Card (in contrast, Sapphire Preferred is $0 the first year then $95).”

    Genug ist genug!

    Either you think your readers are stupid, or making a profit from CC signups is more important than providing your them with accurate information to enable them to make informed decisions, or both, but you have got to decide between that and being THE “Thought Leader in Travel.”

    Here are the facts: Chase introduced the 100K signup bonus points [not mentioned], $450 annual fee (AF) Chase Sapphire Reserve (CSR) card AND, importantly and NOT MENTIONED, a $300 statement credit on travel that effectively results in a [negative] -$150 AF the first year (that’s right, one makes money!), a $0.00 AF the second year, and, subsequently, a $150 AF compared to the CSP’s $95 AF after the first year — an insignificant AF difference considering that the CSR awards 3x for Dining and Travel vs. the CSP’s 2x for the same categories. Given those facts, only one who is brain dead would go with the CSP if one can be approved for the CSR. @Gary knows that to be the case, but he will not level with his readers because he does not have a link for the CSR but does have for the CSP.

    Money talks…

    BTW, glad to see the “Thought Leader” coming around to my thinking months ago, that Chase, especially after the seismic launch of the CSR, had AMEX spooked and desperate for an effective counterattack… Q.E.D

    G’day.

  13. Oh @DCS what I wrote is 100% accurate and the travel credit is an important benefit of the Sapphire Reserve credit to make the math work out on points-earning versus annual fee, but a 100,000 point bonus that was available in the past isn’t super relevant to a card’s current value proposition now is it?

  14. Gary don’t bring a gun to DCS’ knife fight, he’s a bit short on grey matter at the moment

  15. @Gary — I did not say what you wrote was inaccurate. It simply MSILED, as in the past, by presenting only part of the story. That’s the difference and it is a huge difference.

    Also, remember your own topic for this thread: AMEX vs. Chase. And when did the gloves first came off? After the seismic launch of the CSR, in which the 100K UR points signup bonus WAS the story. Therefore, it is relevant to THIS POST. The statement I took issue with, in fact, is itself RETROSPECTIVE:

    “Meanwhile Chase got aggressive bringing back the 50,000 point bonus for the Chase Sapphire Preferred Card, introducing the premium $450 annual fee Chase Sapphire Reserve Card (in contrast, Sapphire Preferred is $0 the first year then $95).”

    Again, genug ist genug!!!

  16. @DCS not writing about a past bonus, no long active, is hardly misleading except in DCS world. I’ve written extensively about the bonus, but it also hasn’t been necessary to continue to drive card signups. When Chase filed with the SEC about the material increase in acquisition cost driven by the card they weren’t even halfway to the total signups reported here.

  17. This was a worthless NYT retread posting and a bunch of worthless comments, but Jerry had the comment of the day. Why should we believe that millenials don’t like American Express because the don’t like people seeing them pulling out an American Express Card? Maybe millenials are leaving American Express for the same reason the rest of us are: their products are no longer competitive. It ain’t rocket science.

  18. @Gary — I will not “debate” you on this. It is not the first time that I have or someone else has called you on for pushing the CSP over the CSR with the same misleading and deceptive half truths. Fortunately, I believe that nearly everyone has already figured out your gig…

    My reiteration and clean demonstration of it again here speaks for itself.

    G’day.

  19. @DCS disagree, they are both great cards and worthwhile for different people at different stages of frequent flyer collection.

    You’re welcome as always to spell out your views, that’s what the comments section is for. Just don’t impugne my motives because I write something that isn’t what you’d write.

  20. Ok so far this year I have added Amex Blue Cash Everyday ($250 signup Bonus) no annual fee, Amex Everyday Preferred (30,000 point signup) and Amex Business Platinum as I have a business where all spend goes on a card whenever possible. Outside of Amex I added Chase Ink Preferred and had Chase Ink Plus from last year. Also have Amex business gold from last year.

    For business, it’s easy, maximize the Ink Preferred for social media and web advertising till hitting the max category bonus, then Amex gold till hitting the max category bonus on advertising and then everything else goes on the Platinum as most charges are over $5k and you also get the point redemption bonus back. No brained. I continue to use Ink Plus for the bonus categories like office supply, cell phone bills, etc.

    For personal everyday it is all going on the Amex Everyday preferred for gas, groceries, etc. Amex offers pay for the annual fee on the preferred and then some. The Chase Sapphire Reserve is only pulled out of my wallet for dining cause of the 3x. The Blue Cash Everyday has 10% for restaurants up to $200 back so the Chase Saphire Reserve is taking a backseat until that is maxed.

    The point is for my Everyday spend day in and day out I am using those two Amex cards for personal spend. I will use the Reserve for the travel bonus to offset the annual fee and for hotel and restaurant spend but that’s about it. Between business and personal I will spend a lot more with Amex. To me Chase is good for the bonuses and little else compared to Amex on an everyday basis. Maybe I am missing something but I disagree with the assumptions made by the NYT article.

  21. To JohnB,
    He is correct,I have been a member since 69. Go carried away chalk it up to exuberance.
    I will cancel both cards in three months and go for the Gold Good idea

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