American Express: Personal Credit Cards, Business Credit Card Provider

American Express

www.americanexpress.com
NYSE: AXP
(Finance: Credit Services)

American Express, commonly referred to as AmEx is a worldwide financial services company that mainly provides credit cards, but also issues traveler’s checks. Founded in 1850 by Henry Wells and William Fargo, of Wells Fargo, American Express accounts for nearly 24 percent of U.S credit card transaction dollar volume.

Contact Info
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Services
Personal Credit Cards, Business Credit Cards, Travel Planning, Merchant Services, Traveler’s Checks

Overview
American Express is an industry leader in personal and business credit cards. The company provides cards that offer premium rewards, flexible payments, and even air travel and hotel partner cards that provide the cardholder with reduced costs.

With an American Express premium rewards card, consumers can select from the basic green preferred rewards card, a gold preferred rewards card, a gold premier rewards card, and the Platinum Card®. The basic green card comes equipped with travel privileges and one reward point for every dollar spent, two points for every dollar spent at the American Express Travel website.

The differences between the gold preferred and gold privileges cards is that the premier card offers no annual fee for the first two years, while the preferred card only waives the annual fee through the first year. In addition, the preferred card gives the cardholder one point for each dollar spent, two points on gas, groceries, and purchases made through American Express Travel, and three points on airfare. The premier card offers the same reward points except for the three points on airfare purchases, but gives anywhere between two-times and ten-times the points for purchases made with select partners.

With the American Express Platinum Card® the cardholder gets all the same rewards points as with the premier gold card, however, there is no annual fee for the first three years.

American Express, along with being one of the world’s leading credit card issuers, is also one of the world’s largest travel agencies. In addition, American Express issues traveler’s checks and publishes magazines through American Express Publishing, such as Food & Wine and Travel + Leisure. Travel agency locations can be found worldwide, while American Express Traveler’s Cheque Group is the largest provider in the world. American Express has an estimated 88 million credit cards in circulation throughout the world.

Nearly half of American Express’ revenues are generated through merchant account fees, and much of this is due to the efforts of the company to expand its acceptance of its credit cards. Businesses in the industrial, construction, and pharmaceutical industries, plus others that typically accept only cash or check payments have also been a target of American Express. Furthermore, American Express offers marketing services to its clients.

In 2008, after the economic downturn, American Express implemented cost-cutting measures that reduced its overall workforce by 10 percent. American Express also transformed into a bank holding company, which allowed for access to US government bank bailout funds while write-offs and delinquent customer accounts increased. Subsidiary banks, Centurion Bank and AEBFSB provide consumer charge cards and issue revolving credit. In 2009, American Express received $3.4 billion in funds from the $250 billion Troubled Asset Relief Fund (TARP), which was repaid within months.

In 2010, American Express paid $300 million for internet-based payment company Revolution Money. The payment platform allows for online payments and issues prepaid cards that can be reloaded. While the company maintains a very small amount of market share, American Express plans to grow it into an internationally accepted service. Also in 2010, American Express sold its stake in American Express Incentive Services, a firm that issues AmEx prepaid cards, to Maritz.

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