I am a big believer that loyalty is a one way road in the game. Sure you can receive great perks for “being loyal,” but with credit cards and airlines/hotels loyalty is bought. I have been critical of American Express for quite awhile now, that’s probably due to the fact they don’t know what they are doing. That being said, I think their latest move shows American Express is desperate to persuade customers to keep their high end cards.
American Express Becomes Desperate
Yesterday, Charlie asked the question, is American scared or playing it smart? He makes some really good points about what American Express could be doing. Although I think this is more of a desperation move on American Express part.
Earlier this year, I wrote about changes that American Express should look at changing.
Since that post, American Express has made some changes:
- Reduced guest into lounges. This really hurts families larger than 3 people
- Increased the annual fee of the American Express Platinum (at least it metal, right?)
- Reduced the American Express Business Platinum rebate from 50% to 35%
- Increased the time for rebate points to post. A painfully long time, up to 10 weeks
- Added “benefit” of Uber credit, which you can only use $15 per month (and $20 in December) in the US only.
- Increased the Personal Platinum card fee by $100
All of these are definitely moving American Express in the wrong direction. They are desperate to stay competitive and keep card members, but quite frankly they aren’t doing a good job of that.
When you look at the other premium cards such as the Chase Sapphire Reserve or Citi Prestige, their cards appeal more to the average person who has more expenses than airfare and hotels. Chase and Citi are pretty broad in the definition of travel and other bonus categories are more realistic for daily spend.
American Express is now giving away large sums of points, probably to keep current card members happy. I’m sure they think this will sway people who are considering canceling their card. But, I think this will backfire and won’t have the effect they are hoping for.
In an desperate move to make card members happy (in my opinion), American Express sent out some great targeted offers.
The first offer was offering up to 50,000 bonus points when you spend $10,000 total. This is basically a “free” sign up bonus, because there is no hard pull required. A nice win for anyone who received this email.
In addition, American Express was very quick to deposit the points to your account. My points posted within 1 day of the transaction posting. I’m definitely not complaining about that though, since everything else they do takes too long.
The other offer awards you 5,000 Membership Reward Points after the authorized user spends $500, up to 4 authorized users. Again for no hard pull, you could earn an extra 20,000 Membership Rewards Points for $2,000 in total spend.
Be cautious if you are worried about the Chase 5/24 rule because those will count against you.
All in all, you could earn up to 70,000 Membership Reward points for $12,000 in spending. That breaks down to an extra 5.8 Membership Rewards per dollar, which is pretty solid for no hard pull and daily spending.
Happy or Not?
Anytime you see a huge offer like this you want to be in on it. This isn’t small offer, especially the Business Platinum offer. The targeted offer of 50,000 points could give you enough points to fly round trip to Europe on Flying Blue, in coach.
Many of us who opened our email and saw these offers were pleased to earn a nice chunk of points for an easier spend requirement. The ones who did not receive this offer were left wondering why they were left out.
Scrolling through the Twitterverse, you could see how disappointed people who did not receive this offer were and rightfully so. If these were people on the fence about keeping their premium, high dollar, benefit slashed credit card, well American Express did a great job showing them their loyalty means something to them.
I have absolutely no idea why I was targeted for this offer. I have used my card very seldom since I hit my spending requirement, because the earning rate on this card is terrible. My annual fee isn’t due until January, so I can’t even say it was due to my annual fee. Although, it does seem that was a trend for people.
It could be that the only transactions I have made were to meet the spending requirement and at a Delta lounge which my airline credit covers.
Maybe American Express thinks giving me a huge incentive, will lead me to use my card more. WRONG! It made me use my card for 1 transaction and back in the wallet it went.
It could be they read my article on why I won’t be keeping my American Express Business Platinum and wanted to change my mind 😉
Even with this offer, I still have absolutely no intention on keeping this card! They are simply hoping their “generosity,” leads to people thinking American Express cares about them and they should keep their card.
Remember, I think loyalty is a one way road, and I will use the cards that I feel reward me best on my purchases. I am loyal to myself in this travel game, not a bank.
American Express is really trying to be the cool Aunt/Uncle/Grandparent/Etc who wants to give you money to like them. If they choose to throw money at us, great I’ll gladly take it and run. I don’t play this game to break even, I’d hope you don’t either.
They are cutting benefits and adding “enhanced” benefits while raising their annual fees, rather than address the issues that are causing them to crumble.
Many benefits of these high cost cards overlap. They all have lounge access, Global Entry/TSA Precheck, some sort of credit, etc. There isn’t a whole lot that sets American Express apart from the rest of the competition.
If American Express actually looked at what consumers want in a card, they could make real improvements to possibly keep customers. Unfortunately, they aren’t making the right decisions to stay competitive with other $450 (or $550) cards.
American Express made some people happy with their current targeted offer, while at the same time making some people upset. I think these offers show how desperate they are to try and retain people.
Unfortunately for American Express, I don’t think people will remember this offer when their fee comes due. The people who did not receive this offer will remember being left out and decide to take their business elsewhere.