Why American Express Brand is valuable?

[fareastwarriors]

Do people really hold 10 credit cards?

 

i have 12 currently.  all are held because they in some way help me maximize the number of points/miles i receive from signup bonuses and spend.

 

I have like 6 now. That's down a couple already. Those sign up bonuses are very lucrative.

 

Wow, I guess I don't work as hard taking advantage of the cash back/points.  I only have 3 cards. Not counting my debit card for my checking account which has a VISA logo on it, but it isn't a credit card and provides no cash back benefits.  I only use it at ATMs to get cash, never to buy anything.  Once you are already getting 2% cash back on everything you buy the extra effort to get a few bonus points here or there doesn't seem to me to be worth the extra effort.

 

Amex Preferred Cash give you 6% back on grocery. Sallie Mae Card give you 5% on grocery(including Walmart Super Center), 5% on gas, 5% on books (including Amazon.com)...

 

 

I have the Sallie Mae card. I guess the disclaimer is 5% cash bank on the first $250 of spending on grocery/gas and then 1% thereafter.  I can't remember the book store limit right now. But it is great reward. It's better than Amazon's Visa Card (only 3% cash back for Amazon purchases).

[Liberty]

I wish we had no-fee cards with such a high cash-back % in Canada. Best I've found is one that gives me 2% on groceries, and on with 1% on everything else, and I recently added the Amazon.ca card with 2% on Amazon.ca stuff.

[beerbaron]

I wish we had no-fee cards with such a high cash-back % in Canada. Best I've found is one that gives me 2% on groceries, and on with 1% on everything else, and I recently added the Amazon.ca card with 2% on Amazon.ca stuff.

 

I have a friend that got an american card by using a PO box in the US. Maybe you could use the same strategy.

 

BeerBaron

[rkbabang]

I'm starting to understand why customer service is such an important thing with AmEx card holders.  I just got screwed by CitiBank.  I was in Mexico this summer and paid for a tour, I changed my mind and called the tour company to cancel 3 days before it was supposed to take place.  They told me they would not refund my money unless I showed up at their location (a $40 cab ride from my resort), so I told them no, I am just going to refute the charges with my credit card company.  CitiBank refunded my money while the "investigation" was pending (2 months), but I just found out today that they are taking their side, not mine, and the charge is back on my account.  I'm paying my bill, claiming my reward balance and cancelling that account this week.  Bastards!  I've been a card holder for decades and the one time I've needed them they screw me over.

[Mephistopheles]

I'm starting to understand why customer service is such an important thing with AmEx card holders.  I just got screwed by CitiBank.  I was in Mexico this summer and paid for a tour, I changed my mind and called the tour company to cancel 3 days before it was supposed to take place.  They told me they would not refund my money unless I showed up at their location (a $40 cab ride from my resort), so I told them no, I am just going to refute the charges with my credit card company.  CitiBank refunded my money while the "investigation" was pending (2 months), but I just found out today that they are taking their side, not mine, and the charge is back on my account.  I'm paying my bill, claiming my reward balance and cancelling that account this week.  Bastards!  I've been a card holder for decades and the one time I've needed them they screw me over.

 

I had a similar experience with Bank of America. Although they took my side, I wasn't very satisfied. It was over a $50 bill at Pizza Hut on the other side of the country. I told them I haven't been in that region in years. They refunded me and investigated. I thought that was the end of it but then they mailed me a picture of the receipt, which clearly wasn't my signature, and said I need to sign the accompanying page saying it's not my signature and get it back to them the very NEXT DAY. Luckily they let me fax it, but it was annoying. I would think that they can a) see for themselves that it's not my signature by comparing w/their records and b) see that the purchase was on the other side of the country, with no other purchase in that area years before or after; and trust me based on that.

 

I've disputed a bill with AMEX as well and it's much smoother. They make it clear that they trust you and want to be on your side.

[Mephistopheles]

Incidentally, my respect for AMEX went up tremendously a couple of weeks ago. I had signed up for a credit card a few YEARS ago which had a minimum purchase of a few thousand in a few months, for which I would be awarded 30,000 miles. Unfortunately, I missed the deadline for the purchase because I was under the assumption that the time period begins from when I receive the card, not from when I signed up, which was two weeks prior to receiving it in the mail.

 

So at the time I called them and tried to get them to give me a break and extend my deadline. They wouldn't bend, they said a deal is a deal. The other day, nearly 3 years later, I got a $300 check from them with a letter explaining that this it was for the missed miles. I couldn't believe it; they certainly won me over all over again.

[rkbabang]

I'm starting to understand why customer service is such an important thing with AmEx card holders.  I just got screwed by CitiBank.  I was in Mexico this summer and paid for a tour, I changed my mind and called the tour company to cancel 3 days before it was supposed to take place.  They told me they would not refund my money unless I showed up at their location (a $40 cab ride from my resort), so I told them no, I am just going to refute the charges with my credit card company.  CitiBank refunded my money while the "investigation" was pending (2 months), but I just found out today that they are taking their side, not mine, and the charge is back on my account.  I'm paying my bill, claiming my reward balance and cancelling that account this week.  Bastards!  I've been a card holder for decades and the one time I've needed them they screw me over.

 

I had a similar experience with Bank of America. Although they took my side, I wasn't very satisfied. It was over a $50 bill at Pizza Hut on the other side of the country. I told them I haven't been in that region in years. They refunded me and investigated. I thought that was the end of it but then they mailed me a picture of the receipt, which clearly wasn't my signature, and said I need to sign the accompanying page saying it's not my signature and get it back to them the very NEXT DAY. Luckily they let me fax it, but it was annoying. I would think that they can a) see for themselves that it's not my signature by comparing w/their records and b) see that the purchase was on the other side of the country, with no other purchase in that area years before or after; and trust me based on that.

 

I've disputed a bill with AMEX as well and it's much smoother. They make it clear that they trust you and want to be on your side.

 

My dispute was only over $100, but that was what made it insane to spend $80 on cab rides there and back to get my card credited.  It is ridiculous that they wouldn't credit me over the phone.  I told this to CitiBank, the only thing the tour company did was send Citi a picture of the original receipt with my real signature on it and that was that.  The charge was determined to be legitimate and reappeared on my account.  It isn't much money, but I'm glad to find this out now before some issue ever comes up that involves something more substantial.

[Mephistopheles]

I'm starting to understand why customer service is such an important thing with AmEx card holders.  I just got screwed by CitiBank.  I was in Mexico this summer and paid for a tour, I changed my mind and called the tour company to cancel 3 days before it was supposed to take place.  They told me they would not refund my money unless I showed up at their location (a $40 cab ride from my resort), so I told them no, I am just going to refute the charges with my credit card company.  CitiBank refunded my money while the "investigation" was pending (2 months), but I just found out today that they are taking their side, not mine, and the charge is back on my account.  I'm paying my bill, claiming my reward balance and cancelling that account this week.  Bastards!  I've been a card holder for decades and the one time I've needed them they screw me over.

 

I had a similar experience with Bank of America. Although they took my side, I wasn't very satisfied. It was over a $50 bill at Pizza Hut on the other side of the country. I told them I haven't been in that region in years. They refunded me and investigated. I thought that was the end of it but then they mailed me a picture of the receipt, which clearly wasn't my signature, and said I need to sign the accompanying page saying it's not my signature and get it back to them the very NEXT DAY. Luckily they let me fax it, but it was annoying. I would think that they can a) see for themselves that it's not my signature by comparing w/their records and b) see that the purchase was on the other side of the country, with no other purchase in that area years before or after; and trust me based on that.

 

I've disputed a bill with AMEX as well and it's much smoother. They make it clear that they trust you and want to be on your side.

 

My dispute was only over $100, but that was what made it insane to spend $80 on cab rides there and back to get my card credited.  It is ridiculous that they wouldn't credit me over the phone.  I told this to CitiBank, the only thing the tour company did was send Citi a picture of the original receipt with my real signature on it and that was that.  The charge was determined to be legitimate and reappeared on my account.  It isn't much money, but I'm glad to find this out now before some issue ever comes up that involves something more substantial.

 

Yea, makes sense. Amex would have heard your argument and realized it was ridiculous of the tour company to expect you to show up in person to cancel.

 

My dispute for Amex was that I had purchased tickets to a college football alumni "event" at a bar in NYC, for my college team. But when we got there, there wasn't anything special going on, there was no reserved table, no special food or drinks, nothing. Nobody even checked our tickets. In other words, anybody could have just gone to the bar and sat down, which was mostly empty anyway. I explained this to Amex and they agreed that it was silly and credited me right away.

[rkbabang]

I'm starting to understand why customer service is such an important thing with AmEx card holders.  I just got screwed by CitiBank.  I was in Mexico this summer and paid for a tour, I changed my mind and called the tour company to cancel 3 days before it was supposed to take place.  They told me they would not refund my money unless I showed up at their location (a $40 cab ride from my resort), so I told them no, I am just going to refute the charges with my credit card company.  CitiBank refunded my money while the "investigation" was pending (2 months), but I just found out today that they are taking their side, not mine, and the charge is back on my account.  I'm paying my bill, claiming my reward balance and cancelling that account this week.  Bastards!  I've been a card holder for decades and the one time I've needed them they screw me over.

 

I had a similar experience with Bank of America. Although they took my side, I wasn't very satisfied. It was over a $50 bill at Pizza Hut on the other side of the country. I told them I haven't been in that region in years. They refunded me and investigated. I thought that was the end of it but then they mailed me a picture of the receipt, which clearly wasn't my signature, and said I need to sign the accompanying page saying it's not my signature and get it back to them the very NEXT DAY. Luckily they let me fax it, but it was annoying. I would think that they can a) see for themselves that it's not my signature by comparing w/their records and b) see that the purchase was on the other side of the country, with no other purchase in that area years before or after; and trust me based on that.

 

I've disputed a bill with AMEX as well and it's much smoother. They make it clear that they trust you and want to be on your side.

 

My dispute was only over $100, but that was what made it insane to spend $80 on cab rides there and back to get my card credited.  It is ridiculous that they wouldn't credit me over the phone.  I told this to CitiBank, the only thing the tour company did was send Citi a picture of the original receipt with my real signature on it and that was that.  The charge was determined to be legitimate and reappeared on my account.  It isn't much money, but I'm glad to find this out now before some issue ever comes up that involves something more substantial.

 

Yea, makes sense. Amex would have heard your argument and realized it was ridiculous of the tour company to expect you to show up in person to cancel.

 

My dispute for Amex was that I had purchased tickets to a college football alumni "event" at a bar in NYC, for my college team. But when we got there, there wasn't anything special going on, there was no reserved table, no special food or drinks, nothing. Nobody even checked our tickets. In other words, anybody could have just gone to the bar and sat down, which was mostly empty anyway. I explained this to Amex and they agreed that it was silly and credited me right away.

 

Seems a hell of a lot more reasonable.  I wonder if this is the reason, rather than cost, that some merchants don't accept AmEx.  It is a lot easier to screw over MasterCard holders and get away with it.

 

[HJ]

http://www.bnn.ca/News/2014/11/5/Costco-could-drop-American-Express-in-US-after-Canada-switch-report.aspx

 

[bookie71]

Humm, Charley is on the Costco board and Warren owns AMEX.  Think it won't happen? Ask Coke why Pepsi is served at the Costco food courts.

Could be interesting.

[HJ]

http://blogs.barrons.com/stockstowatchtoday/2014/11/26/why-losing-costco-would-matter-for-american-express-discover-sues-visa/?mod=BOL_hp_blog_stw

 

Earlier this month, news broke that Costco Wholesale (COST) was considering dumping American Express (AXP) as its credit card of choice in the U.S. Susquehanna’s James E Friedman and Xin (Joey) Yang explain why Costco is important to American Express:

 

 

Costco Cobrand Is Important, Especially for Small Business. The big-box retailer does nearly $113 bln in annual revenue, almost 75% with small business owners. American Express has two co-branded, cash-back credit cards with Costco in the US. And these American Express cards are the only credit cards accepted by Costco in the US. As such, in-store American Express competes with only debit and cash. In exchange for this exclusivity we believe that Costco has negotiated a lower discount rate from American Express (vs. the current 2.49% average). As such we estimate Costco generates ~$100 mln of discount revenue for American Express, and another $60 mln in interest income…

 

We believe Costco also helps the perception of American Express “coverage.” A continuing goal of American Express is to increase merchant “acceptance” (currently lowest when compared with Visa (V), MasterCard (MA) and Discover Financial (DFS)). This is particularly relevant for their B2B franchise. With almost 75% of Costco’s spending from its Executive Members (mostly small business) and American Express strength in small business cards, Costco has played a major role in bolstering this perception among business users. Costco’s heavy foot traffic and American Express signage likely drive American Express sign-ups as well.

 

 

Merchant acceptance of Amex is actually lower than DFS, something not surprising when thinking through, but I did a double take when first reading it.

[leeway]

Costco accepts any AMEX card, not just the 2 cobranded ones. Some years ago only Discover cards were accepted. Whatever Costco will switch to, I for one will carry one of those cards, and may use it sometimes for other payments. So the effect does go beyond the sales within Costco stores.

[Liberty]

AXP to lose Costco exclusivity, stock down over 5% this morning:

 

http://www.wsj.com/articles/american-express-to-lose-costco-exclusivity-1423746408

 

This should be good for MA and V, more transactions.

[bookie71]

non-subscription link

http://www.wsj.com/articles/american-express-to-lose-costco-exclusivity-1423746408

[fareastwarriors]

non-subscription link

http://www.wsj.com/articles/american-express-to-lose-costco-exclusivity-1423746408

 

I wonder who will win this business. I need a new credit card. I been paying with a debit card at Costco (no rewards!).

[Guest 50centdollars]

Discover?

 

non-subscription link

http://www.wsj.com/articles/american-express-to-lose-costco-exclusivity-1423746408

 

I wonder who will win this business. I need a new credit card. I been paying with a debit card at Costco (no rewards!).

[Pauly]

My local Costco is Mastercard exclusive now...I assume that goes for all of Canada?

 

I'd like to see Visa win in the US...being that I'm a V shareholder.

 

 

 

[HJ]

Market is acting as if it's MA + COF, redux of the Canadian outcome.  There was comment that it's as much as 20% of Amex worldwide loans outstanding, 8% of billing volume, so it's a fairly big deal.  Curious how much they will disclose on economics of the winner.

[nikhil25]

American Express Loses Antitrust Lawsuit on Merchant Rules

http://www.wsj.com/articles/american-express-loses-antitrust-lawsuit-on-merchant-rules-1424360909

[LongHaul]

There was an article in the WSJ recently about how AMEX might be losing share to high end Visa and Mastercard issuers.

Whitney Tilson was quoted as switching to Barclay Card which looks great.  I ordered one as it seems like a great deal.

 

http://www.barclaycardarrival.com/arrival-plus/?campaignId=1729&campaignId=2043&od=bcarrival&cellNumber=24&cellNumber=9&referrerid=BCSBA1014HPG

 

 

Anyone have any thoughts on if AMEX is losing its prestige vs high end competitors? 

 

I was thinking that after Mastercard and Visa were "demutualized" they increased rates and now their issuers can go after AMEX.

[Jurgis]

Personally, Amex never held prestige to me.

 

My main "non-special" card is Fidelity Amex that gives 2% back. But I'd hold any other card that gives 2% back if it was available. And it would be simpler to me if it was Visa or MC. (Yes, I think there is Citi something which does 2% back in two stages... it seemed confusing to me :)).

 

I have a bunch of other "special offer"/"special situation" cards (Amazon, TJX, 5% categories, airline, no foreign fees). None of them are Amex.

 

There might be a segment of population for whom Amex means prestige. Not for me.

[fareastwarriors]

Personally, Amex never held prestige to me.

 

My main "non-special" card is Fidelity Amex that gives 2% back. But I'd hold any other card that gives 2% back if it was available. And it would be simpler to me if it was Visa or MC. (Yes, I think there is Citi something which does 2% back in two stages... it seemed confusing to me :)).

 

I have a bunch of other "special offer"/"special situation" cards (Amazon, TJX, 5% categories, airline, no foreign fees). None of them are Amex.

 

There might be a segment of population for whom Amex means prestige. Not for me.

 

You're talking about the Citi Doublecash card. You get 1% cash back when you purchase and 1% when you pay your balance.

 

The Citicard is a good card since the Amex is not accepted everywhere.

[randomep]

My fidelity rewards amex seems to be issued/serviced by FIA Card Services (BofA).  I don't expect anything like good service from them, but I get 2% cash back on everything.

 

I have the same card.  We probably don't get the service that other AmEx cardholders get, because we don't pay an annual fee.

 

Same here and my impression of amex has changed after I got it. It can't be that prestigous if I can get one! :)

 

[Jurgis]

Personally, Amex never held prestige to me.

 

My main "non-special" card is Fidelity Amex that gives 2% back. But I'd hold any other card that gives 2% back if it was available. And it would be simpler to me if it was Visa or MC. (Yes, I think there is Citi something which does 2% back in two stages... it seemed confusing to me :)).

 

I have a bunch of other "special offer"/"special situation" cards (Amazon, TJX, 5% categories, airline, no foreign fees). None of them are Amex.

 

There might be a segment of population for whom Amex means prestige. Not for me.

 

You're talking about the Citi Doublecash card. You get 1% cash back when you purchase and 1% when you pay your balance.

 

The Citicard is a good card since the Amex is not accepted everywhere.

 

Off topic: any idea why Citi went with this confusing scheme rather than straight 2% off?

 

It's not as if they get much for it: if people don't pay off, they pay high rate, so even better for them.

Unless this is to avoid paying 2% back for people who get the card and get 0%-rate for first year and keep the balance for that year. That might make sense.