American Express cards carry a certain cache at the point of sale. In contrast to the branded network credit card model of Mastercard and Visa, which operate a four-party card network, American Express (and competitor Discover) offer a three-party model where the card firm owns the relationship with both the cardholder and the merchant. American Express typically aims at the higher spectrum than other issuers; my rule of thumb is that they target FICO scores >720, the prime segment of U.S. cardholders.
The American Express Cash Preferred Card is one of my personal favorites. My card says that I have been a member since 1998, though I think the actual timing is much longer, dating back to the 1980s, and I’ve had a variety of different Amex cards over the years. The reason I like this card is the rewards, which pays a whopping 6% cashback on groceries, up to $6,000 in purchases a year.
The only problem is that the high bonus maxes out once you hit that limit and the cash reward tempers down to a more traditional 1% incentive. The upside is that you will probably find that Discover It or Chase Freedom has one of their 5% rotational incentives in the grocery vertical once you hit the limit.
American Express weathers the COVID storm with its usual grace. As their latest quarterly reports indicate, T&E billings, which contributed 30% of their proprietary billed business of $266 billion in Q219, fell dramatically during 3Q as COVID caused us all to hunker down at home. T&E fell to 12% of their billed business, on a base of $214.8 billion in Q320.
Online retail consumer purchasing surged by 32% during the same period, while offline retailing fell 10% during the same period. Cardmember receivable net write-offs held nicely at 2%, down from 2.5% over Q220, and 30+ delinquency was a solid 0.9%. Loan Loss reserves ramped up heavily in Q1, following the industry trend to cover Current Expected Credit Loss requirements (CECL).
Amex announced some regearing of their reward offers in this notification at the American Express site, which are relevant to the panemic-world. Detailed below are some highlights.
Building on its commitment to small businesses, American Express is giving U.S. Small Business Card Members extra support to help keep their businesses moving forward. This includes:
- Up to 400,000 Additional Membership Rewards® Points Across Back-to-Business Categories6: With these exclusive business offers, eligible Business Platinum Card Members2 can now earn 5X Membership Rewards points on U.S. purchases made across wireless, shipping, advertising, gas and office supplies categories through June 30, 2021 after they enroll in these Amex Offers. That’s four additional points on top of the one already earned per dollar spent in these select categories, up to 80,000 points per category. In the coming weeks, new Business Platinum Card Members will also receive exciting offers for their first three months of Membership.
- Up to $250 Back on Eligible Business Purchases: With this cash back bonus, eligible Blue Business Plus and other eligible American Express small business Credit Card Members2,7, can receive $25 back via statement credit on transactions greater than $500 up to 10 times, through June 30, 2021.
Support for U.S. Small Merchants’ Growing Digital Presence
Last year, American Express made over $15,000 in discounts on services available to businesses to help them save on shipping, connect with customers, streamline their operations, and more. As small merchants continue to invest in their ecommerce and digital capabilities, American Express is continuing to offer multiple discounts and services for U.S. small merchants, with the most recent offers including:
- 30% off Social Media Management Solutions from Sprout Social: New Sprout Social customers will receive a 30-day free trial and then 30% off their subscription after signing an annual subscription. Sprout Social helps businesses manage their social media presence across channels, streamline and scale engagement with customers, and analyze social performance. Offer valid through March 31, 2021.
- Get 4 Months free from BigCommerce for Building an Online Store: New BigCommerce customers can get their first four months free after they sign up for a free 15-day trial.
Up Next: New Cobrand Card Offers
In the coming weeks, American Express and its Cobrand partners will be introducing new limited-time offers for existing Consumer and Business Delta SkyMiles®, Hilton Honors® and Marriott Bonvoy™ Card Members — with more details to come soon.
- This new value builds on Card Member’s existing benefits as well as the suite of relevant and rich Amex Offers available through the Amex mobile app or online account.
Online Shopping Perks for Consumer Platinum Card® Members
79% of consumers surveyed say they have spent significantly more time shopping online in the past 12 months than ever before and 53% indicate they plan to spend more on online purchases in 2021 than in the past, according to the Amex Trendex1.
Eligible U.S. Consumer Platinum Card Members will now see even more value when they shop online, with new offers available through June 30, 2021:
- Up to $180 in statement credits with PayPal: Consumer Platinum Card Members can receive up to $180 back ($30/month via statement credits) on purchases made at eligible merchants with PayPal through June 30, 2021. Terms apply.
What is most important here is American Express’ comprehensive view of their cards in light of the new normal, with a view of merchants, small business, and high-end consumers, which will likely help them keep a healthy pace in these segments.
Overview provided by Brian Riley, Director, Credit Advisory Service at Mercator Advisory Group