American Express: Two new no-fee cards
American Express has a problem: Its cardholders are old. Too old, by their reckoning. According to Robin Sidel in the Dec. 1 Wall Street Journal, Amex execs "acknowledge their customers have been older than 40." What to do?
For Amex, the answer has been a no-fee credit card called "The Knot" aimed at a certain young demographic -- people planning on getting married. The idea, apparently, is to lure this demographic with a card that offers discounts on wedding dresses, honeymoons, and home decor. Then, once the honeymoon is over, somehow migrate them to other American Express cards -- assumedly, those that offer a better financial benefit to Amex through fees, rates, or other financial arrangements with co-branded card partners. The "somehow" bit has yet to be worked out, judging by Sidel's article.
Having been a former young person who once was an American Express cardholder, I have a few pieces of advice for the company. One: the best way to get young people, and keep them, is to offer them a no-fee card that stays no-fee for the life of the relationship. If the company feels its necessary to charge fees at some point, they will lose customers, because there are lots of no-fee arrangements from other issuers, and young people -- many of whom are sensitive to fees -- will simply abandon the relationship for cheaper pastures.
Sure, Amex can try gimicks like reward programs, but judging by what people have told me and I have heard elsewhere, the public is getting skeptical
Later, I'll relate my own experience with American Express, and why I cut the card. There may be a few lessons in it for you, and the company.
This year my family will take a trip to Asia to visit the in-laws. My question: Where should we buy the tickets? Read
Earlier this week, I blogged about the American Express plan to create a new card called "The Knot" to attract younger customers. Today I would like to relate my own experience with Amex, and why I cut the knot. Read
More Americans than ever are running their own businesses, but most don't think they're saving enough for retirement. Read
Today Fidelity Observer continues the discussion about cutting subscription costs -- this time, those mobile phone plans that cost most of us at least $360 per year, and some well over $1000/year. Read
Don't they already have a no-fee card aimed at the younger demographic? It's called Blue. And they even have it with rewards: Blue Rewards or Blue Cash.
Can someone explain why people would pay an annual fee for a credit card when there are so many out there without one? I guess to some there is the appeal of no credit limit, but even though they say there is no credit limit, there is one. Besides, with even a little job/income history and credit history, just about anyone can find some bank somewhere to give them a Visa or Mastercard with a $10k to $15k limit on it. If you need a higher limit than that, you probably can't afford what ever it is you want to buy.
