I’m a little concerned about American Express right now. Yes, I know they’re a multi-billion dollar company. But let’s face it, they’ve had had a pretty rotten 12 months and I’m starting to wonder if they’re going to be okay.
Why, you ask, am I worried?
Well, let’s jump all the way back to 2014. Many of you younger folks weren’t around back then, but it was a glorious time in the history of humanity. Jay Leno hosted the “Tonight” Show and the Seattle Seahawks couldn’t have cared less about 1 measly extra yard in the Super Bowl. You kids think you have it hard today? You have no idea. Back in 2014, we had to turn on a national television network just to watch the show “Community.”
Amongst all this, American Express sat on top of the world, commanding a credit card portfolio as far as the eye could see. If you wanted a travel rewards card, you wanted an Amex. Sure, maybe you’d have an occasional fling with that young and cute Chase Sapphire Preferred. But that was just for kicks. When it came to travel, you remembered who made the best home-cooked meal, consisting of two parts airline lounge access and one part transfer partners.
Amex was your woman and you would never leave her. Not for Chase, not for anyone.
But Then Something Happened
It was about a year ago when Amex started to lose some of her shine. You could sense it when the Amex Platinum card began to fall apart with the loss of American and US Airways lounge access, and then further restricted guest access for Delta lounges.
“No worries,” we all thought. “Amex will fix it with new benefits that will be even more exciting.”
But they didn’t. They added a couple Gogo passes and some Boingo and called it a day.
Around the same time they introduced their Amex Everyday cards. They’re nice and all, but nothing to write home about. Personally I’d rather have a Chase Freedom and max out the 5% categories each quarter instead of worrying about making 20-30 transactions a month on an Everyday card. But Amex had always known what they were doing, so maybe they still had something up their sleeve.
Why won’t JetBlue return our calls?
Except towards the end of 2014, people started to whisper that JetBlue was talking to other banks about taking over their credit card partnership. Reports said Amex might still be among the bidders to keep the business, but when the Queen of Credit Cards was fighting to maintain her partnership with a low-cost airline, we had to start feeling that perhaps she’d lost a step.
And then, after the turn of the year, the bottom fell out.
Costco announced they were leaving Amex and moving to Citibank with a new Visa card, thus ending not only their partnership with American Express but also making Visa the only credit card accepted at their stores. That marriage with Costco had been providing Amex with $80 billion in annual revenue. That’s a huge hole blasted in their customer base. Shortly after that, JetBlue also served the papers on their divorce with Amex, heading for the greener pastures of Barclays.
If we thought things couldn’t get worse, we were wrong. Amex lost an antitrust suit over their policies of preventing merchants from trying to lower their credit card costs. While we as consumers generally applaud lower costs, those extra Amex profits are what have allowed us to fly in Singapore Suites across the Pacific for practically nothing.
Finally, the icing on the cake was when Amex’s last remaining legacy airline partner Delta decided that SkyMiles could be more of a feeling than an actual loyalty program. I’ve heard rumors that when United ran their 2014 proposed award chart revision (which at the time raised prices absurdly across the board) by their partners at Chase, the folks at Chase went ballistic, which is what resulted in the split United metal/partner metal award charts.
Do you think Delta even bothered to inform their partner Amex when they decided to do away with their award chart entirely?
Please, here’s $100, just stay one more year.
Which brings us full circle to the newest perk added to the Amex Premier Rewards Gold card — a $100 annual airline fee credit, similar to the existing $200 credit on the Platinum card but half as good. Note this new benefit also comes along with a $20 increase in the annual fee as well, which brings it to a hefty $195.
It’s not that the extra $100 isn’t welcomed or appreciated. It’s just that it feels like you’re tired, Amex, and reaching around in the refrigerator of benefit leftovers. At least the Platinum card is obviously designed for heavy travelers, but it’s not even clear what an airline credit has to do with the branding of the PRG card.
As if to prove they’re behind the times, Amex also added a 2x restaurant bonus category to the PRG. Really, Amex? You do know that a 2x restaurant bonus category is practically a staple in the credit card business nowadays, right? If you’re going to go down that road, you might as well tell me that as an added perk I can also pay my monthly bill via the Internet. Now wouldn’t that be exciting?!
The Devil’s Advocate no longer feels special about Amex.
Back in December I touched on a few of these points when I tore apart the limited new perks Amex was trying to promote as replacing lounge access on the Amex Platinum (see “The Amex Platinum! Now Improved! But Not Really!“). But even I didn’t realize that we had only just started to see the decline of a once great credit card issuer.
I hope Amex can turn it around. In the past they’ve been innovative in creating new and exciting credit card features, perks, and rewards. They’ve led and the rest of the industry followed. But now those roles seem reversed and it’s up to Amex to change things up and start thinking outside the box again.
Because if it stays this way, it won’t be long before we hear the neighbors chattering away about how Frontier Airlines spent the night over at Ultimate Rewards place…Devil’s Advocate is a weekly series that deliberately argues a contrarian view on travel and loyalty programs. Sometimes the Devil’s Advocate truly believes in the counterargument. Other times he takes the opposing position just to see if the original argument holds water. But his main objective is to engage in friendly debate with the miles and points community to determine if today’s conventional wisdom is valid. You can suggest future topics by following him @dvlsadvcate on Twitter or sending an e-mail to firstname.lastname@example.org.
Recent Posts by the Devil’s Advocate:
- My #30kToNowhere Mileage Run Cost Only 3.99 CPM… Or Did It?
- Why You Shouldn’t Get a Hyatt Visa for the 20% Rebate
- It’s the End of the Delta SkyMiles Award Chart, and I Feel Fine
Find the entire collection of Devil’s Advocate posts here.