Amex worried??

[WA flyer]

Well, they are going to notice a huge drop (to just about zero) come Oct 1st from me....and by Jan 2013, both the Charge and Reserve card will be cancelled. Will have put about $150K in the last 12 months on the cards...small bickies I know but if many card holders do this, it might bite AMEX a bit....:idea:

Me too, I have just received my Westpac Plat Altitude + in preparation for 1st Oct.
Will use that with the Citi select and Amex Ultimate for future spending. I am finding the Citi price match excellent for QF bookings!
http://www.australianfrequentflyer....ram/citibank-price-match-guarantee-35663.html

 

[dontwanttoregister]

They can't be too worried. Cardmember since 1999, cancelled yesterday. Not a single question asked about why nor any alternatives presented. I haven't paid an annual fee for 5 years, it seemed to be waived as a matter of course on request each anniversary.

Can't say I'm too sad about the end of the relationship, it was becoming very one sided and I need the wallet space.

 

[Ausbt]

This 'card member since 99' is interesting: I also just closed a Platinum Q card today due to lack of use, and it stated upon it 'Cardmember since 99'. However I just took a look at my Velocity Platinum CC card and there is no reference to this length of service with Amex. So will Amex regard me a cardmember for 13 years or have I just wiped the slate clean?

 

[RWJ777]

Me too, I have just received my Westpac Plat Altitude + in preparation for 1st Oct.
Will use that with the Citi select and Amex Ultimate for future spending. I am finding the Citi price match excellent for QF bookings!
http://www.australianfrequentflyer....ram/citibank-price-match-guarantee-35663.html

Link in original post seems not to be working.

 

[WA flyer]

This 'card member since 99' is interesting: I also just closed a Platinum Q card today due to lack of use, and it stated upon it 'Cardmember since 99'. However I just took a look at my Velocity Platinum CC card and there is no reference to this length of service with Amex. So will Amex regard me a cardmember for 13 years or have I just wiped the slate clean?

Mine is also "since 99" but "since 05" on my Ultimate, no idea why. Still I guess once I leave I'll be able to come back as a newbie with and a nice points bonus!

 

[aschmid]

They can't be too worried. Cardmember since 1999, cancelled yesterday. Not a single question asked about why nor any alternatives presented. I haven't paid an annual fee for 5 years, it seemed to be waived as a matter of course on request each anniversary.

Can't say I'm too sad about the end of the relationship, it was becoming very one sided and I need the wallet space.

This is I think what is really the issue here. We mostly talk about the changes in the product features or the cost of the product but I think all of that wouldn't matter so much if AMEX would not have such a disregard for their loyal customers. I personally feel the same way that AMEX today as such an arrogant attitude that for some reason they believe they are doing you are favour if they allow you to be one of their customers.

Even with Citibank, who is by all means not perfect, at least one thing I can say they try to look after their existing customers. I had several times issues with them and called to cancel but every time they managed to offer me something that prevented me from leaving be it points, lower annual fees or low rate for limited time, etc. It just shows they at least care about their customers even though they don't have perfect operations.

 

[wxxnxs]

This is I think what is really the issue here. We mostly talk about the changes in the product features or the cost of the product but I think all of that wouldn't matter so much if AMEX would not have such a disregard for their loyal customers. I personally feel the same way that AMEX today as such an arrogant attitude that for some reason they believe they are doing you are favour if they allow you to be one of their customers.

Even with Citibank, who is by all means not perfect, at least one thing I can say they try to look after their existing customers. I had several times issues with them and called to cancel but every time they managed to offer me something that prevented me from leaving be it points, lower annual fees or low rate for limited time, etc. It just shows they at least care about their customers even though they don't have perfect operations.

Even CBA starts offering benefits to keep existing customers, AFAIK CBA normally does not negotiate with credit card fees unless there is a special case, no matter how much you spend.

 

[aschmid]

I was going to cancel end of this month but having read this threat I wanted to test the theory:

So now I just called up and ask to cancel my cards. They did ask why i want to cancel and i said "The recent changes in insurance and rewards don't warrant a $900 annual fee" - hint, hint!

BUT no reaction just okay ... give me a moment ... your cards are now cancelled, please make sure if you have any outstanding direct debits ... bla ... bla ... bla.

Have been a customer since 2000. Go figure.

 

[Moopere]

This is all very strange, but a huge organisation like Amex is extremely unlikely to be petulant or have any 'feeling' whatsoever. They will have a strategy in mind and will be pursuing that strategy.

Perhaps behind the scenes they are interested in reducing their exposure with Membership Rewards? Perhaps co-branded cards, with banks, are working better for them? I can't begin to imagine the various contracted relationships behind the bank co-branded products ... I wonder who carries the burden of the short term credit? I had heard as background noise that amex was trying to reduce their credit burden which is an astronomical monthly figure. Amex customers, in general (apparently), don't pay any interest so the cost of providing credit to customers falls back to merchant transaction fees and annual card fees.

 

[aschmid]

This is all very strange, but a huge organisation like Amex is extremely unlikely to be petulant or have any 'feeling' whatsoever. They will have a strategy in mind and will be pursuing that strategy.

Perhaps behind the scenes they are interested in reducing their exposure with Membership Rewards? Perhaps co-branded cards, with banks, are working better for them? I can't begin to imagine the various contracted relationships behind the bank co-branded products ... I wonder who carries the burden of the short term credit? I had heard as background noise that amex was trying to reduce their credit burden which is an astronomical monthly figure. Amex customers, in general (apparently), don't pay any interest so the cost of providing credit to customers falls back to merchant transaction fees and annual card fees.

While I kind of see the point of the exposure to huge amount of credit let's not forget that this is what AMEX does. Providing short term credit is their core business. They don't have much left after that as they are not a traditional bank with other income streams. So charge and credit cards is AMEX bread and butter and that means you are in the short term credit business, better get that straight.

I certainly do hope that it's the case that AMEX customer don't pay much interest. None of their cards has less than 15% interest, most of the higher end card usually around 20%. If you really revolving a balance you'd be kind of silly doing that on an AMEX card if there is 10% cards out there with even better balance transfer offers. So why would anyone revolve on a regular basis on an AMEX card?

 

[Moopere]

While I kind of see the point of the exposure to huge amount of credit let's not forget that this is what AMEX does. Providing short term credit is their core business. They don't have much left after that as they are not a traditional bank with other income streams. So charge and credit cards is AMEX bread and butter and that means you are in the short term credit business, better get that straight.

Yes, sure - I get it too. This is their core business... yet, I am trying to fathom whats going on. Why, for instance, is MR points earn halved on the majority of Amex cards for Government, Utilities, etc, yet on co-branded cards the earn remains the same? Why are the traditional products of Amex being diluted in value (or perception of value) whilst the co-branded cards are relatively stable?

Its starting to smell like a deliberate strategy to me, but perhaps I'm reading too much into the tea leaves?

Diners used to be in the same game as I recall, and now, at least in Australia, are owned/backed by Citi, the Diners brand, here, is now really just a retail product. One wonders what the planners at Amex are up to?

 

[aschmid]

I wonder myself what AMEX is up to and i have no idea. I think they must have lost their marbles. On the one side they can't care less if somebody is leaving them, on the other side they have sign up bonuses and I see ads running on TV about how they make everything possible. Beats me. Don't know what they want, seems like want to shed existing loyal customer and just get some fresh blood through? Probably points to a CEO that is measured on how much NEW business he generate vs sustained business. Probably with a huge bonus to that he's gonna pocket and move on and leave the organisation in shambles as usual.

 

[oz_mark]

Probably points to a CEO that is measured on how much NEW business he generate vs sustained business. Probably with a huge bonus to that he's gonna pocket and move on and leave the organisation in shambles as usual.

I suspect that a lot of it comes down to the Managing Director position changing hands not so long ago. The incoming MD probably has profit targets etc to achieve. Amex Australia was not an overly profitable business, so it may well be that a business as usual approach was not going to work in improving it's profitability.

(and for what it's worth, AFAIK, the MD is a she)


..and this is all mostly conjecture on my part.....

 

[Moopere]

American Express Australia Limited Appoints New Managing Director - People On The Move - etravelblackboard.com

The article quotes Ms Vehrenkamp (new Amex MD) as saying "Australia is an important market for American Express. Since 1954, our local business has forged a position as a leading payment, network and travel company built on the foundations of exceptional service. I’m thrilled to be leading the company at a time of enormous innovation to deliver services that make life easier, safer and more rewarding for consumers and businesses"

I seem to remember last years profit statement being something like 8.2 million on 1.15 Billion turnover. Thats not even 1%. I cannot for the life of me see how that would translate into "an important market for American express". Before that the figures were even worse, and apparently before 2005 there has never been a profit at all. I smell a rat right there.

But you know, if they could arrange for the banks to take on the burden of providing and paying for the short term credit account and simply 'retail' the Amex brand, perhaps its perceived that profits will increase? Rather than borrowing short term money from a bank you pull them in as a partner.

I have no idea of course, but as I say, there does seem to be a direction crystallising here. Seems to be more than natural product attrition or random product retirement/dilution.

 

[civinod]

Had another call from my Account Manager yesterday trying to sell me on upgrading to the Centurion card.

I have got to hand it to him he has been doing some sums.

Basically he looked at my spend and saw that most of it was with a freight company so would qualify for 2 points per dollar spend. Hence I could earn an extra 375,000 points per year compared to Platinum card. Weigh that against the $4600 annual fee (against $900 plat fee and only 300,000 points per year at bonus rate of 1.5) and it works out about 1c per point. It has made me think about it again.

Things must be tough in Amex land tying to keep customers at the moment!!

 

[Sprucegoose]

Had another call from my Account Manager yesterday trying to sell me on upgrading to the Centurion card.

I have got to hand it to him he has been doing some sums.

Basically he looked at my spend and saw that most of it was with a freight company so would qualify for 2 points per dollar spend. Hence I could earn an extra 375,000 points per year compared to Platinum card. Weigh that against the $4600 annual fee (against $900 plat fee and only 300,000 points per year at bonus rate of 1.5) and it works out about 1c per point. It has made me think about it again.

Things must be tough in Amex land tying to keep customers at the moment!!

Yes but if that changes you have an expensive dud on your hands. And life does change!!

 

[RWJ777]

This is all very strange, but a huge organisation like Amex is extremely unlikely to be petulant or have any 'feeling' whatsoever. They will have a strategy in mind and will be pursuing that strategy.

Perhaps behind the scenes they are interested in reducing their exposure with Membership Rewards? Perhaps co-branded cards, with banks, are working better for them? I can't begin to imagine the various contracted relationships behind the bank co-branded products ... I wonder who carries the burden of the short term credit? I had heard as background noise that amex was trying to reduce their credit burden which is an astronomical monthly figure. Amex customers, in general (apparently), don't pay any interest so the cost of providing credit to customers falls back to merchant transaction fees and annual card fees.

Ah, this could be the answer: they might be making good money out of co-badging with reduced costs in terms not having to run the credit machinery themselves. So, not having to administer the account themselves, and instead riding off another institution's account management, means that they minimise their per customer machinery costs while getting a steady (but doubtless reduced) income stream through the co-badging rights. It might mean that their principal business of offering the whole product themselves is becoming too expensive to run hence starting to cut back on the incentives to use it.

 

[civinod]

Yes Spruce very true. I was thinking the same thing but mind you it would be used up in a a couple of months max...

I am going to wait until closer to October 1 and get it in writing from the Account Manager that the bonus rate applies. If it falls over I think I would have a good argument to cancel and get a refund.

 

[Stephen65]

It has made me think about it again.

Make sure you don't pay any sort of joining fee for the Centurion though. Would suck to pay that and then have the card enhanced again.

 

[Stephen65]

Yes, sure - I get it too. This is their core business... yet, I am trying to fathom whats going on. Why, for instance, is MR points earn halved on the majority of Amex cards for Government, Utilities, etc, yet on co-branded cards the earn remains the same? Why are the traditional products of Amex being diluted in value (or perception of value) whilst the co-branded cards are relatively stable?

I would suspect that Amex is locked into contracts with its partners on the co-branded cards which mean that they cannot freely alter card features such as earn and redemption rates.