Introduction
One of the largest and most famous brands in finance especially in relation to the payment solution is American Express. From here on the American Express card the Amex card marks itself out from all other credit cards because of its differentiating features advantages and the prestige a person gets by owning one. This article unravels the history of American Express cards their different varieties the benefits they offer how they impact personal and corporate finance and how they compare to others in the marketplace.
We shall discuss the challenges and criticisms that Amex faces and the changes it has had to undergo to stay on par as the future of finance unfolds.
History of American Express and Its Card
American Express was founded in 1850 by Henry Wells William G. Fargo and John Butterfield. Originally it was a financial services company specialising in express mail and the name American Express came from it. However the current image of Amex as it is known today didn’t materialise until the mid 20th century. Knowing the advantage the company sensed the scope of opportunity in the growing demand for consumer credit and launched its first charge card in 1958.
Because it was a card that required users to settle their balances at the end of every month and not revolving this feature made this card different from the rest creating it as an elite card for the rich therefore making it represent financial responsibility and exclusivity.
Amex Card
It continued to diversify its product lines for decades with a stream of novelties such as credit cards and debit products which further expanded its horizons in the sense that it was now reaching out to various customer needs. By the 1980s Amex had become one of the biggest providers of financial services globally as the card was effortlessly taken to most corners of the globe for personal and business purposes.
American Express turned the day on its head innovating and improving to add co branded arrangements with airlines hotels and other organisations as well. Targeting customer service rewards programs and upscale products helped position it in the ranks as a leader in the financial services industry.
American Express Cards
Among the different varieties of American Express cards there are many distinct advantages and benefits. There are charge cards membership credit cards and cobrand.
American Express issues a large number of cards and caters to different needs and financial profiles such as charge cards credit cards co branded cards and corporate cards. Below we’ll review the most prominent types of Amex cards available today.
Charge Cards
As noted above Amex started with charge cards and still offers those today. Charge cards mandate that the issuer pay his balance off in full each month as opposed to credit cards which use revolving credit. Some of the most recognized charge cards are
Platinum Card by American Express
This is Amexs most premium card offering benefits like lounge access travel insurance concierge service and rich rewards points in travel and dining.
American Express Gold Card
This too is a premium charge card with rewards points in places like dining groceries and travel hence best suited to those having big spends in those categories.
Credit Cards
Except for the credit card Amex offers a more traditional credit card where cards are issued to a cardholder. The facility allows a cardholder to roll over a balance from one month to another on which interest is charged on the unpaid balance. Among the popular Amex credit cards some of them include
Blue Cash Preferred Card
A top pick for everyday purchases earning cash back on groceries gas and streaming services.
American Express Green Card
This is more accessible to those who would like to earn points on travel and dining but are not interested in paying a significantly large annual fee.
Co Branded Cards
American Express has entered into agreements with many companies to offer co branded credit cards. Co Branded credit cards offer typical Amex benefits with rewards and terms custom to specific brands. Some of the popular co branded cards are
Delta Sky Miles American Express Cards
This is one of the perfect cards for those who fly with Delta Airlines very frequently since it provides Sky Miles rewards and many kinds of travel benefits.
Hilton Honors American Express
Cards are designed for those who are loyal to Hilton. It allows users to earn Hilton Honors points on purchases and enjoy all kinds of benefits including free elite status at Hilton properties.
Corporate and Business Cards
The company has an entire line of corporate and business cards tailored for small businesses and large enterprises. The cards assist businesses in controlling their expenses earning rewards and employing benefits to the employees. Some of the popular card options are
American Express Business Gold Card
It is a very versatile card offering points on business related expenses such as advertising technology and travel.
American Express Business Platinum Card
This card provides more points on travel expenses for bigger companies or companies that travel more frequently. It also gives premium privileges from lounge access to travel insurance.
Benefits of American Express Cards
The main reason American Express has remained ahead of the curve is because it gives its card holders endless benefits. What I mean by this is that it offers some benefits far beyond simple points and cashback from travel protection to going to exclusive events.
Reward Programs
One of the most attractive features of Amex cards is the myriad rewards programs they offer. In fact depending on the needs of the card holder he may like cashback travel points or rewards on expenditures. Amex has a number of these rewards programs to fit the varied tastes of each card user. This is particularly true for American Express Membership Rewards which is very flexible and value for money earning points on almost all kinds of purchases and redeemable through various options.
Membership Rewards Program
The Membership Rewards program is one of the most flexible loyalty programs existing in the financial services arena. Points earned through qualified purchases are redeemable for just about anything such as
Travel Card
Members can apply their points to book flights hotels car rentals and vacation packages directly through American Express travel sites or transfer their points to program loyalty for select airlines and hotels.
Statement Credits
Points can be used to pay for the cardholder’s statement balance.
Gift Cards Membership
Rewards points can be redeemed for gift cards at several retailers and restaurants.
Merchandise
Amex has partnered with various online stores to give cardholders access to redeem points for electronics clothing household goods and more.
Shopping
Cardholders can shop directly from partner merchants such as Amazon or PayPal using their points.
The Membership Rewards program is quite flexible. The points never expire and the cardholder has the chance to use them when he feels like it. This makes the tool highly value for money for frequent travellers shoppers and diners.
Amex Offers
Another great rewards program is Amex Offers which are available on most Amex cards. It provides card members with targeted deals and discounts from selected retailers restaurants travel services and entertainment venues. Amex offers may be cashed back in a purchase holiday savings and extra points earned when spending at merchants who are partners of Amex. Offers are available all the time with new ones being added giving cardholders a new dynamic way to save money and increase reward potential.
Co Branded Credit Card Rewards
American Express has partnered with various airlines hotel chains and retailers. Through the co branded card it issues cards with special rewards attached to these brands. Such include
Delta Sky Miles Credit Card
This card lets its holders earn Delta SkyMiles for earning purchases that one can redeem in terms of flight seat upgrades or other related travel advantages through Delta Airlines.
It awards a point for each dollar spent for Hilton Honors American Express Card stays in participating international and domestic Hilton properties.
Marriott Bonvoy Brilliant American Express Card
This card offers huge rewards and benefits for loyal Marriott customers both in the form of points for stays and elite status in the Marriott Bonvoy program.
These co branded cards suit buyers who are loyal to certain airlines hotels or retailers and want to maximise their expenditure in those respective areas.
Travel Benefits
One of the most significant benefits of American Express premium cards is their generous travel benefits.
Indeed American Express remains identified with luxury travel and catering to cardholders with seamless convenience and comfort. Luxury travel is catered not only to leisure but also to business travellers and always provides comfort and access to exclusivity.
Travel Insurance and Protections
American Express offers card members many travel related protections in this case one would be invaluable in case an unexpected disruption to travel becomes necessary. Such protections include
Trip Cancellation and Interruption Insurance
Trip cancellations or interruptions for reasons of illness severe weather conditions and other covered events.
Travel Accident Insurance
Accidental injury or death while travelling.
Lost or Delayed Baggage
Insurance Reimburses for luggage lost damaged or delayed while travelling.
Rental Car Insurance
Most American Express cards offer secondary or primary rental car insurance that will cover an account holder against damage or theft if the cardholder uses his Amex card to rent.
Hotel and Airline Benefits
Even more premium perks which can be accessed at specific hotels and airlines include supplementing benefits such as
Fine Hotels & Resorts Program
This program is available only to the Platinum Card presenting elite advantages at participating luxury hotels.
Among many travel conveniences are room upgrades free charge breakfast late checkout and several other privileges.
Airline Fee Credits
Some American Express cards such as the Platinum Card come with annual statement credits that can be used to offset any incidental fees charged by airlines like baggage fees inflight meals and seat upgrades.
Global Entry/TSA Pre Check Credit
Most American Express cards possess credits that may be used to offset the expense of applying for either Global Entry or TSA Pre Check thus providing card holders with fast security and customs clearance at airports.
Moreover it has a long history of gift giving including designing exclusive dining and entertainment experiences for card members. Such benefits are designed to upscale the lifestyle of card members by allowing them access to once in a lifetime events and preferred treatment at the finest establishments.
Benefits Under Dining Rewards and Experiences
Many American Express cards especially in the Gold and Platinum line offer excellent dining rewards. The American Express Gold Card for example offers high rewards rates on all dining purchases restaurants takeout and delivery services.
Some of the other wonderful privileges offered by Amex include partnering with some of the best chefs and restaurants worldwide to offer cardholders incredible experiences such as being invited to very special events priority reservations and curated tasting menus.
Amex Entertainment Access
American Express cardholders enjoy preferred access to concerts sporting events Broadway shows and more through the American Express Entertainment Access program. Here a cardholder will be able to buy tickets before a concert or sporting event goes on public sale or even score top seats that are not available anywhere else. Amex also sponsors special events where a cardholder may access VIP lounges or get to meet the performer.
Concierge Services
Amex premium cards such as the Platinum Card pay for an array of 24/7 concierge services helping you to make your life more customised. Bookings at restaurants where getting a table is particularly tough securing tickets to sold out events or even arranging unique experiences while travelling the variety of services offered is very helpful to busy professionals and high networth individuals looking to open exclusive opportunities and plan things easier.
Challenges and Criticisms
While it has some strengths American Express has a wide range of challenges and criticisms in the marketplace
Merchant Acceptance
One of the criticisms most commonly levelled against American Express is that it enjoys far less merchant acceptance than Visa and Mastercard. As Amex charged higher interchange fees to merchants for each transaction than did Visa or Mastercard some merchants still needed to accept their cards. Although the company has worked very hard over the years to reduce fees and expand its merchant network the company still lags in merchant acceptance especially among small businesses and internationally.
Higher Annual Fees
Most of the premium benefits enjoyed by American Express come with an associated cost. Cards such as The Platinum Card have annual fees that are mostly offset by large rewards and perks but annual fees may become too high for consumers who don’t make full utilisation of cards. This may make it more challenging for Amex cards to compete with no fee cards issued by their competitors as a choice for frugal consumers.
Competition with Visa and Mastercard
Visa and Mastercard are the two giants in the world of the payments sector with much more expansive merchant acceptance. The two also have a greater variety of co branded cards with the banks hence having a higher probability of the consumer finding a card that meets their needs. This competition is a strain on the company as it strives to innovate and remain atop its competition in the market.
International Outreach and Plan
American Express has been driving aggressively to expand its reach worldwide. Within the last few years the company through partnering alliances with banking institutions and payment processors globally has increased the acceptance of its cards and thereby acquired more customers. Recently Amex struck deals with mobile payment platforms and fintech companies to stay relevant amid this ever changing financial services marketplace.
Another area the company has concentrated on is digital innovations to enhance the user experience. American Express will continue to be ahead of the curve when the world becomes more integrated with digital wallets and online transactions with the emergence of mobile apps virtual cards and contactless payments.
Future of American Express in Finance
With evolving trends in financial services landscapes future payment and credit are likely to see American Express play a significant role. Some of the trends and innovations will be key in American Express direction over the coming years.
Digital Transformation and Fintech Integration
Fintech revolutionised traditional financial services and American Express realised that the only way to stay ahead of the competition was to be innovative digitally. The company has invested heavily in technology to improve the user experience as well as in security systems. The company has witnessed the trend of digital wallets and a major push and it has accepted the cards through platforms like Apple Pay Google Pay and Samsung Pay.
Apart from this Amex has also undertaken some efforts to partner with fintech companies in an attempt to reach out and service a younger tech savvy set of customers. American Express can access virtual cards subscription management tools and expense tracking apps through integration with the FinTech platform.
Sustainability and Corporate Social Responsibility
As aligned with the growing consciousness of consumers on issues such as sustainability and corporate social responsibility American Express addresses these concerns. The company has initiated several carbon reduction initiatives promoting diversity and continues to ensure investment in a local community that benefits its current operations. For example the company vowed to cut its emissions and increase renewable energy usage in operations.
In addition to that the company has also launched eco friendly credit cards that use recycled materials that can attract and appeal to more consumers who are pro environment. Further American Express has undertaken initiatives to nurture small businesses. For instance since the pandemic hit its door steps in COVID19 the organisation has stood for supporting small businesses during that hard time and therefore extended its stature as a company held to be socially responsible.
Conclusion
American Express is a true market leader within the credit card and benefits programs for individual and business customers in the financial services business. Even in a very competitive market the strength of their brand lies within the premium benefits given to the client with which they give impeccable customer service.
The Membership Rewards program is strong with travel benefits and partnerships with leading global brands indicating the firm considers a wide range of consumer needs and preferences. Besides supporting small businesses digital transformation and corporate social responsibility American Express shows a forward thinking approach towards growth.
