Bloomberg News

AmEx Offers No-Fee Card With Rewards Rivaling Premium Products

March 03, 2014

American Express Credit Cards

Unlike with American Express Co.’s charge cards, EveryDay customers will have a spending limit and won’t be required to pay their balance in full each month, according to AmEx. Photographer: Scott Eells/Bloomberg

American Express Co. (AXP:US) is seeking to broaden its customer base by offering its first no-fee credit product that grants holders access to all of the lender’s rewards programs.

The “EveryDay” card is AmEx’s biggest debut in terms of the amount of money spent on development and marketing since AmEx launched its “Blue” brand in 2000, according to Ed Gilligan, president of AmEx. The card issuer (AXP:US), already the biggest by purchases, is seeking new kinds of customers including U.S. mothers by offering incentives such as extra points for shopping at supermarkets, Gilligan said.

“This segment didn’t think AmEx had a product that fit their needs,” Gilligan said in an interview at the firm’s New York headquarters.

AmEx, whose business was built on charge cards that didn’t allow consumers to carry a balance, is seeking ways to increase loans and net interest income, which Gilligan has said comprise a smaller part of revenue than for competitors. Loans are increasing at AmEx slightly faster than the rest of the industry and they’re regarded as an important source of future revenue growth, he told analysts last month.

Unlike with AmEx’s charge cards, EveryDay customers will have a spending limit and won’t be required to pay their balance in full each month, according to AmEx. They also won’t get extra perks such as earning triple rewards for travel and dining or access to entertainment events that are available to some customers who pay an annual fee on other types of cards.

Zero Percent

Terms call for the new card to carry a zero-percent interest rate for the first 15 months and 12.99 percent to 21.99 percent afterward, according to the company. Customers will have access to the full rewards program, which includes perks like transferring travel points that aren’t available on other AmEx products that don’t have an annual fee such as Blue, the firm said.

The new card comes with EMV anti-fraud technology -- named for founders EuroPay International SA, MasterCard Inc. and Visa Inc. -- that’s designed to provide better security than cards with magnetic strips.

To promote the card, which will be available by April 2, AmEx planned television advertisements featuring Tina Fey to run during the Academy Awards and photographs by Annie Leibovitz that will appear in print publications.

To contact the reporter on this story: Elizabeth Dexheimer in New York at edexheimer@bloomberg.net

To contact the editor responsible for this story: Peter Eichenbaum at peichenbaum@bloomberg.net


Cash Is for Losers
LIMITED-TIME OFFER SUBSCRIBE NOW

Companies Mentioned

  • AXP
    (American Express Co)
    • $90.39 USD
    • -0.23
    • -0.25%
Market data is delayed at least 15 minutes.
 
blog comments powered by Disqus