
How Bad Will It Get for American Express? - someear
http://www.bloomberg.com/features/2015-how-amex-lost-costco/
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d2ncal
I've been an AMEX user since 2002. I have a MasterCard also, and use it where
AMEX is not accepted. However, I prefer using AMEX because:

1\. It has a rock solid dispute system. I've disputed charges where the
merchant didn't deliver on promise and AMEX took really good care of it. Same
thing with a Visa card didn't go very well. You can do everything off the AMEX
website and over email. With others, you have to call them and deal with lousy
customer support.

2\. They have a really good website and overall user experience. Its a
pleasure to go to the website to see the charges, or to get a well laid out
annual spending report. Their mobile app is also the best as compared to
others.

3\. They have stellar customer service. I rarely need to call them, but when I
do, the wait times are in seconds.

4\. They support mobile payments - Its the first one to be on Samsung Pay and
I happen to have a Note 5.

FWIW, I just have the "American Express Blue Cashback" card, which no annual
fees.

~~~
exw
> Same thing with a Visa card didn't go very well

I agree with the overall sentiment of your post, but unlike Amex, Visa does
not issue credit cards, and relies on banks ("Issuing Banks") to deal with
disputes. So if you had a bad experience with your Visa card, you should
consider switching to a different issuer, vs. just assuming that all banks
that issue Visa cards will act the same.

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eggoa
For something as fungible as credit card transactions, it's hard to understand
how a "brand" could be truly valuable. (Or is the grocery store cashier
secretly really impressed when I produce my Amex Blue?)

~~~
magic_beans
I've live in New York and I've literally never been to a single bar or grocery
store that accepts American Express.

Anyone know why this is?

~~~
Sanddancer
Amex charges higher fees per-transaction. Because they're a charge card, they
make their money off the transaction fees, and not off the interest rates a
card accrues. Conversely, this means they have to charge more on the front-end
to maintain profitability.

~~~
branchless
Yep - great to see them in trouble. Most small businesses hate them as they
take from their bottom line.

IIRC amex also tried to stop retailers letting customers know just how much
they charge per transaction and wouldn't let shops offer different prices to
counter-balance Amex greed.

Overall they sound thoroughly nasty and I cheer their demise.

ps whenever I can I use cash at an independent business so they keep the 2-3%
instead of some big bank.

~~~
cthalupa
>Overall they sound thoroughly nasty and I cheer their demise.

They're wonderful as a consumer, and I would be quite sad if they were to go
anywhere. I've had multiple large companies try to screw me over, and I went
to Amex and they went to bat for me and took care of the issue.

I have 100% confidence that I will be taken care of for all purchases related
to my Amex card, which I cannot say even for my other "prestige" cards such as
the Chase Sapphire Preferred, etc.

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cm2012
This is typical modern Bloomberg reporting - telling a misleading, emotion
driven story from anecdotal data and rumors.

"The Amex people, most of whom had MBAs, sometimes found it amusing to deal
with Costco veterans who spoke about starting out stocking warehouse shelves.
Less endearing was the habit Costco executives had of referring to Amex as a
“vendor.” That made the Amex people seethe. After all, they represented one of
America’s oldest corporations. But they smiled and said nothing, and the
corporate marriage endured for 16 years."

Seriously?

~~~
thehoff
While I don't entirely agree, this article put me off a little.

The first three paragraphs didn't make sense to me and seemed like you said,
anecdotal/rumor.

Same with the part about Chenault at the Museum of Natural History event with
Sheryl Sandberg and how "yet his dark slacks were creased, and his shoes
gleamed as if they'd just been polished." Reads as if the author has something
personal in this. What was he supposed to show up in?

~~~
joezydeco
I got the impression the author was trying to reinforce the image of Amex
being a stodgy Wall Street company that is increasingly out of touch with
technology and culture.

~~~
champillini
I think they were more trying to demonstrate their elitism, which is kind of
the brand that Amex has.

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AdmiralAsshat
I was really bummed when I found out that the Costco Amex card was getting
cancelled, as I was thinking about getting one.

But having read the article: good. I'm glad Costco did not hesitate to tell
them to take a hike when they found a better deal.

~~~
JoshTriplett
The Costco Amex vanishing seems like no big deal. However, Costco refusing to
take Amex for payment at all introduces far more inconvenience.

~~~
brewdad
Not really. Before AMEX, Costco had an exclusive deal with Discover. That's
the definition of inconvenience. This new deal will result in a Costco branded
Visa but Costco will be accepting ANY Visa card. For the vast majority of
consumers this is much more convenient.

FWIW, AMEX has been doing the hard sell trying to get me to switch to a new
card. So far, I haven't seen any offers worth my time. It's a shame really.
I've been a cardholder for 15 years and even worked for them for a few years.
Personally, I see no reason to continue the "relationship".

~~~
davidw
Yeah, when we moved back to the states, I signed up with Costco. Only I
couldn't pay for it with any of the cards that I had. So I also had to sign up
for their Amex card. Quite a bit of paperwork and hassle...

~~~
redblacktree
There's always cash.

------
iamleppert
"And you know the surest way to go broke? Keep getting an increasing share of
a shrinking market. Down the tubes. Slow but sure. You know, at one time there
must've been dozens of companies making buggy whips. And I'll bet the last
company around was the one that made the best goddamn buggy whip you ever saw.
Now how would you have liked to have been a stockholder in that company? You
invested in a business and this business is dead. Let's have the intelligence,
let's have the decency to sign the death certificate, collect the insurance,
and invest in something with a future."

------
mastre_
Not a fan of elitism, however one good effect AMEX has on people who use their
charge cards is to make them be more responsible with their spending habits.
Credit cards make their money by charging interest on revolving credit, which
steers people toward being less responsible with their spending.

Ironically, I think the people who would stand to benefit the most from a
charge card, those just getting started i.e. in college, probably don't
qualify for a charge-only AMEX, whereas the credit card companies aggressively
pray on them.

~~~
pbreit
Most of Amex's non-corporate business now is regular ole credit cards.

~~~
morgante
Do you have a citation for that?

Most mid-to-high-end Amex cards (which generate the majority of revenue) are
still charge cards.

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platform
In my view, AMEX will not survive, unless it innovates by creating new 'types
and ways' of credit card usage. Eg offering multiple currency balances,
digital currencies, using a card for non-payment functions, integrating with
phones for security/etc.

Their network is small and getting smaller, and I think soon corporations will
just stop issuing AMEX to its employees for corp expenses (this were AMEX is
still strong (guessing)) -- as there are enough attractive business-friendly
alternatives are out there.

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Overtonwindow
Anyone else go into a Costco and then try to pay only to be hit with the Amex
deal, and say no thanks? I wouldn't mind having a Costco membership, but the
Amex thing really rubbed the wrong way, so I never bothered to get a
membership.

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tmaly
I have been an AMEX user since 2005. I love their customer service, and I like
that my card is travel ready. I do not have to call up some place to tell them
I am traveling over seas. That is a huge benefit for me.

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ww520
Amex has been offering pretty sweet signing bonus for new cards. I think I
have raked in enough points for two first class international flight tickets.

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NoMoreNicksLeft
Chenault's strategy of pursuing the New Jersey EBT card program was when
things really started to go downhill.

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crisopolis
Article references Costco getting bummed that their customers could use VISA
in plenty of places and that's correct. However, I'm an AMEX cardholder and
I've yet to run into a place who doesn't accept AMEX.

However, Costco is right AMEX is just a vendor and if they can find cheaper or
better vendor with benefits then more power to them.

~~~
thieving_magpie
Really? I only have an AMEX card and unless it's a chain store it's almost
never accepted. I often get lectures from small business owners about the
higher rates charged by AMEX and why they can't accept it.

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steanne
i'd be more impressed if they hadn't done the half-assed chip-and-sig thing
and actually supported pins.

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NN88
Goddamn this was brutal

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Exuma
Is AMEX really struggling... ?

I really had no idea. That's really disappointing, how could that be?

~~~
AngrySkillzz
They offer a strictly inferior, more expensive product in an industry that has
been effectively commoditized.

~~~
s73v3r
Their service for cardholders is strictly superior to any other card issuer.

~~~
Exuma
That is the correct answer.

