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What’s Going On Over at American Express?

by , February 4, 2013. (Posted in: Credit Cards / Personal Finance News)


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There’s a new J.D. Powers and Associates survey and it appears American Express has claimed the coveted number one position in customer satisfaction. This, according to a survey that included 14,000 consumers, is based on a number of factors, including the terms and conditions that define the accounts, the billing process, its rewards programs, customer service and whether or not problems are easily remedied. Not only that, but American Express took that number one spot in all categories and in fact, the report reads,

The competitors of American Express like Capital One Financial Corp. and Discover Financial Services could not match to American Express.

Oldest Card Company

Many aren’t aware of this, but American Express is the oldest credit card company in the nation. Founded in 1850, the Amex story is dotted with events, changes and history that memorialize the American financial landscape. Its first offerings included money orders, which were offered to consumers as another option besides the U.S. Postal Service. By the time the 1950s arrived, it was already creating its own niche in the financial sector and soon, it offered the American Express charge card. This time, instead of competing with USPS, it was looking to level the playing field for those who were using Diners Club, but who wanted more choices. That first charge card had a $6 annual fee. Its first traditional credit card was the Optima card.

It remains the nation’s largest credit card lender based on its volume and its consumers spent 8% more in 2012 on a national level and 5% more internationally than they did in 2011.

Prepaid Factor

American Express is now in the prepaid debit card business, too. Its Blue Bird card is a co-branded effort with Wal Mart and has no fees, is reloadable and offers a lot of great perks and benefits for a prepaid card. Users get the same fraud protection and customer service that earned it the number one ranking. Blue Bird is a reloadable debit card which customers can use at any retail counter that accepts American Express. All of the fees are paid by the retailers, too.

Meanwhile, the American Express Serve, another prepaid card, has a built in platform that works great for those who find themselves working and playing online. With an impressive app and an easy to understand website, consumers are already reporting a solid experience that allows them to better manage their money. Card holders can add money via credit cards or bank accounts and it’s easy to set up direct deposit, too. It’s a fluid financial product that offers up the latest in safety technology. Downloading coupons and other deals is easy, too.

So why now? Why two prepaid debit cards, released just weeks apart, from the same credit card network? It could come down to a recent announcement by the federal government. There are close to 5 million paper checks mailed every month to Social Security recipients. It’s quite costly for the government to print and then mail those checks; in fact, estimates are that it’s a $4.5 million tab each and every month. This, according to the Treasury Department, is the ideal incentive to make the transition over to prepaid products.

As the government readies for the March 1 deadline, those who haven’t provided an electronic payment method will likely see delays. American Express is covering its bases with these two prepaid product. The goal is to gain new members with a quality financial product. It’s also touting the safety consideration of lost or stolen cards being easily replaced, no worries about lost or late checks and it’s safer than cash.

Microsoft Factor

Another much anticipated announcement includes a partnership with Microsoft. By teaming with the software giant, the credit card company now has an in with a younger consumer base. It’s slated to now offer discounts via the MS X Box video game systems. It’s the ideal gateway into online merchant markets. You may recall 2012 saw Amex partner with Facebook, Foursquare and Twitter, all of which provide a seamless opportunity for members to sync and integrate their payment processes.

On the international front, American Express has jumped on the opportunities the global sector provides. Most recently, it launched its prepaid products in India and consumers can load different currencies, including U.S. dollars and Euros. Canada is in on the gig too as Amex announced the Bank of Nova Scotia will now offer its products.

The Financials

American Express reported a 5% increase in its revenue to total $8.1 billion and its earnings are up 8% too from 2011. Despite these impressive numbers, the credit card company is now said to be laying off more than 5,000 employees as it seeks to restructure debt.

It now looks like Paypal might be a thorn in the company’s side, which is already offering point of sale networks in several retailers around the country, including Home Depot.

There’s a lot going on with American Express these days. There’s an authenticity associated with the customer service team and its commitment to financial education, worthy causes and ethical business practices. In recent years, it’s shown just how fluid it is. It’s met the challenges and benefits from technology as well as the changing needs of its customers. No longer is this the credit card company that focuses on enticing more affluent consumers. It’s actually redefined itself without compromising the value of its offerings.

There’s no denying Amex seems to be evolving even more. It’s actually embraced a quickly changing financial sector and while it’s always met those challenges, it seems as though a fresher approach has been thrown into the mix making it a formidable force for its competition such as Discover, MasterCard and Visa.

Are you an American Express card member? If so, let us know your favorite Amex product and if you’re using either one of the new Amex prepaid products, let us know your experience with those too. It’s the consumer, after all, who has the final say in how any one product performs over the long haul.

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