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AmEx Says Rewards War for Premium Card Customers Is Leveling Off

AmEx Says Rewards War for Premium Card Customers Is Leveling Off

(Bloomberg) -- American Express Co. is finally seeing a reprieve from the years-long rewards war.

The battle, which boosted industry spending on points and other perks used to lure premium card customers, was kicked off three years ago, when JPMorgan Chase & Co. introduced its wildly popular Chase Sapphire Reserve, AmEx Chief Executive Officer Steve Squeri said. Since then, AmEx has had to refresh the rewards offerings on many of its cards, including its Gold and Platinum portfolios, and spent more to keep some of its biggest co-brand partners, including Delta Air Lines Inc. Now, competition is beginning to cool.

“Our competitors are run by really smart people and they do a really good job executing. What we have seen, though, is a leveling off,” Squeri told investors at a conference in New York on Tuesday. “What we have seen is a leveling off in terms of rewards, a leveling off of bonuses and things like that, and even interest-rate offers.”

Lenders such as Citigroup Inc. have said they’re moving away from promotional interest-rate offers as they seek to increase the profitability of their card portfolios, and issuers including Discover Financial Services have said they’re tightening their standards in preparation for an eventual turn in the credit cycle.

For AmEx, refreshing the lender’s Platinum portfolio following Chase Sapphire Reserve’s debut is starting to pay off. Squeri said Tuesday that the Platinum card base has increased by 60% in that time, with roughly half of new cards going to customers under the age of 35.

To contact the reporter on this story: Jenny Surane in New York at jsurane4@bloomberg.net

To contact the editors responsible for this story: Michael J. Moore at mmoore55@bloomberg.net, Daniel Taub, Christine Maurus

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