Newspaper article International New York Times

American Express Focuses on Affluent ; New Benefits Are Offered to Holders of Gold Cards, Though with Higher Fees

Newspaper article International New York Times

American Express Focuses on Affluent ; New Benefits Are Offered to Holders of Gold Cards, Though with Higher Fees

Article excerpt

The company announced new benefits for holders of its gold cards, including double points for all restaurant transactions in the United States.

American Express, bruised by the recent loss of two major partnerships and an important court case, is seeking to reinvigorate its brand by sweetening the rewards on one of its most popular lines of cards.

The company announced on Thursday new benefits for holders of its gold cards, including double points for all restaurant transactions in the United States for its premier rewards gold card and regular gold card. It will begin offering a personalized travel service for those cardholders, as well as a $100 annual credit for airline incidentals, including meals and baggage surcharges. And it will eliminate foreign transaction fees. Other types of gold cards will get new benefits as well.

The new gold card benefits, which will begin June 1, won't come without some added cost to cardholders: The annual membership fee for the premier rewards gold card will rise $20, to $195 per year. For the regular gold card, it will rise even more, to $160 from $125.

The move signals a reinvestment in the company's core business -- premium charge cards aimed at affluent consumers -- after recent efforts to expand its base to more middle-income shoppers.

"You've seen us enter new consumer spaces, but we're also getting really invested in continuing to rebuild our premium cards," said Lisa Durocher, the company's senior vice president, charge and benefits.

Little has gone right for Amex in recent months -- falling gas prices and weak holiday season sales took a toll on its revenue targets. The company said in January that it would eliminate 4,000 jobs, or about 6 percent of its work force. It announced recently that it had failed to renew two key partnerships, with Costco and JetBlue.

Then a federal judge ruled that Amex had violated antitrust laws with its longstanding policy that bars merchants that accept its cards from steering customers to use lower-cost forms of payment.

The transaction fees Amex charges merchants are routinely higher than those levied by other card companies, in part to finance the lucrative rewards programs of cards like the gold card. The judge, Nicholas G. Garaufis of the Eastern District of New York, has yet to order a remedy, and Amex has said it will appeal the ruling, but the company could eventually be forced to alter its way of doing business.

All of these setbacks have taken a toll on Amex stock, which traded at $94.27 a share on Dec. 29 and had fallen to $78.08 by Feb. 13. It has since crept up and on Thursday closed at $83.25.

The Costco deal had been particularly lucrative for Amex. Its cards were the only plastic other than debit cards that the big discount retailer accepted. The two companies also jointly issued a credit card for general use, and there is some question whether those cardholders will stick with Amex. …

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