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Something interesting to watch in your lunch break!
Why Wealthy Americans Love AmEx
https://www.youtube.com/watch?v=EbLmCRuoW1w
And one piece of information I just learnt from it, at 4 minutes in, is “the company generated about $9.9 billion of interest in 2022”. AmEx’s net interest income.
Wow! Anyway back to the video….
This was posted the other day, but yes, it is interesting.
I doubt they get much interest from HFP readers.
Ah sorry I missed it.
This is why I love reading annual reports but then I guess I’m a finance geek.
I find it more interesting that they generate US$6 billion in card fees. Only £985 of that comes from the Froggee household so this means there are a lot of other suckers out there.
I doubt they get much interest from HFP readers.
Yes, it would need to be entitled “New ways to screw Amex for retention bonuses” to generate interest here! 😄
Evil HFP readers fleecing this company which generates a paltry $6 billion in card fees 😉
Evil HFP readers fleecing this company which generates a paltry $6 billion in card fees 😉
You have to feel for Amex – it’s not easy being simple country folks, trying to run an honest Mom & Pop multinational financial services corporation.
Add onto that evil HFP readers trying to take you for every penny they can get, it’s a wonder they make any profit at all.
I assumed it was only a matter of time before they go bust, I thought everyone just rinsed the points, I guess not.
Do you think they are stupid and allow what they allow to lose money?
To be honest, yeah I kinda did think that, it made no sense.
Seriously? They’ve been around forever, the global economy would be in serious trouble if Amex went bust!
Well not actually go bust, although I have never given it much thought, it’s just the rewards seem far to good to be true, I feel like I’m (we are) taking the mick. To the extent I got an extra 50k for keeping the platinum so kept it a couple more months before cancelling, if you get my meaning.
It seems like a terrible business model, but as usual it seems I was wrong.
If you are so concerned about the future of Amex you could always donate your 50,000 retention MR points back to them!
Given the number of people that pay £6800 in the first year then £3500 or so annually for a Centurion card in return for … well I’m not really sure what – other than a card that still makes Amex craploads of money on top of that by charging 3% on overseas transactions – I’m sure Amex will be OK. 😀
I assumed it was only a matter of time before they go bust, I thought everyone just rinsed the points, I guess not.
I don’t think they will go bust, but they may get out of UK market, they’re the last of the US credit card company operating in UK. Citi, Capital One, Bank of America and others have gone out in the last decade.
I’m sure they do lots of stuff that are not profitable (or at least directly profitable). And some of this money spent on retention, bonus, etc. might come from money pots that have to be spent regardless of their impact on the company (always a scourge on big organisations). But c’mon, to think that long term stuff that they do it’s done to the benefit of the HfP crowd and that they are losing money doing it.
they’re the last of the US credit card company operating in UK. Citi, Capital One, Bank of America and others have gone out in the last decade.
Not entirely true. Bank of America own MBNA and they’re still going strong in the UK.
I assumed it was only a matter of time before they go bust, I thought everyone just rinsed the points, I guess not.
I don’t think they will go bust, but they may get out of UK market, they’re the last of the US credit card company operating in UK. Citi, Capital One, Bank of America and others have gone out in the last decade.
The American bank Chase are very active in the UK with their new app based bank accounts.
Chase has no credit cards in the UK.
US banks in the UK there are more in fact (GS e.g.), gs_mit was specifically talking about US credit cards.they’re the last of the US credit card company operating in UK. Citi, Capital One, Bank of America and others have gone out in the last decade.
Not entirely true. Bank of America own MBNA and they’re still going strong in the UK.
Bank of America sold MBNA UK to Lloyds couple of years back. This is kind of oligopoly of UK companies and the products has gone downhill
Amex have a different setup to most other banks, in that they provide their own cards and don’t piggyback on Visa or MasterCard. This makes it much more lucrative to stay in the UK for them.
Their business/corporate cards must also make them a shed load as well in interchange fees, making it worth staying in the UK.
The number of vendors willing to offer deals on Amex that don’t offer them elsewhere also tells a story in itself that they must be able to sell their success enough for other companies to want to join in.
Amex generates profit from cardholders, including from hobbyists and churners like the HfP crowd. HfPers probably spend more through Amex than the average non-HfP cardholder. This generates a lot of transaction fees for Amex. HfPers are also providing a marketing service for Amex for free by happily discussing these products, referring family and friends, etc. Amex designs their terms and conditions, including limitations on bonuses, and their bonus and reward point amounts based on data from all different types of users, including HfPers.
Amex is not going to exit the UK market. The UK is a big market for luxury and high-net-worth spend by British citizens, non-citizen residents, and tourists. As such, the UK will continue to be a big market for Amex for spend, and so will continue to support a successful credit card business.
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