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What Amex Needs to Do NOW in Order to Stop Playing Second Fiddle to Chase

Last week I’ve mentioned that Amex has added some pretty strong verbiage to their “T and C” on credit card applications.  I don’t have any problem with banks trying to make money. They are a business, after all. Admittedly, me and Amex have not been on “simpatico” terms for a while. If you are a new reader, I can’t get into any details as to why. I will only say that  recently, our relationship has improved quite a bit.

Either way, the purpose of the post is not to bash American Express, but rather provide feedback in hopes that  the rep who reads my blog will pass it on to the relevant department (rather unlikely given the small scale of my site, but worth a shot). It’s in my best interest to see Amex give Chase a run for their money. Why? Competition among banks is good for consumers and tends to increase sign-up bonuses.

I will be the first one to admit that I’m not the type of a customer Amex should be after. Heck, I wouldn’t want me. But I am a regular mom and consider myself to be somewhat  of an expert on credit cards. Plus, I deal with normal folks enough to know what works and what doesn’t.

So, here is the list of five suggestions, in no particular order, and occasionally addressed to Amex:

1) Don’t go “Anthony Scaramucci” on your potential customers.

Cue Italian New Yorker accent:

If you apply via leaked credit card links, we will confiscate your points. All of them. Man, we just want to find and kill  the leakers. Oh, you didn’t know it was a targeted offer when you applied? Well, you should have known. Next time, ask us and we’ll let you know what links are acceptable and which ones are not. Just don’t expect us to stand by that answer because we are not responsible for what underpaid and undertrained reps in India may tell you in the online chat. Unless it’s to our advantage. 

Basically, just apply for inferior links on our website and you will be safe. Oh, you think it’s unfair that some can get a better offer elsewhere? Too bad.  We took  the sign-up bonus from one guy today, and will take it from three more tomorrow. And you better re-elect, err, renew your credit card for the next five years or we’ll CONFISCATE ALL OF YOUR POINTS.

American Express and its customers are like brothers, similar to Cain and Abel. In short, we will be thrilled if you apply for one of our credit cards. What say you?” ( A note to readers: I’m not trying to inject politics into my blog, but merely using recent colorful events for comedy  material).

First impressions matter, right? I don’t know who drafted the latest “genius” amendment to terms, but it really stinks. Amex, are you trying to scare off potentially profitable customers? Because it’s working. But don’t take my word for it. Here is a comment from  reader Cheapblackdad:

There you go. This upstanding black citizen got spooked by your over-the-top threats. You lost him, maybe forever. He puts considerable amount of spending on credit cards each month, and now Chase will have it all. Once again, I understand why Amex wants to get rid of potentially unprofitable customers, it’s just that they are cutting off the nose to spite the face. There is plenty of competition in US, people will simply take their business elsewhere.

2) Launch a card that is a crossover between Chase Freedom and Chase Freedom Unlimited.

This one is a must. Amex can’t just be as good as Chase. It has to be better. Their cards are still not accepted everywhere, which is a major strike against that bank. Sure, they have great purchase protection and various lucrative offers in online profile. But it’s not enough.

American Expresss has some great everyday cards, like Amex Blue Cash Preferred and Amex Everyday Preferred (read about them here). However, there is one major problem. Both have annual fees. Many normal families will skip the cards for that reason alone. Yes, the products are worth the fee, but it’s a matter of perception. Annual fee=deal breaker for regular family.

That’s why most of my friends and relatives have Chase Freedom, and few have applied for Citi Double Cash. They like the idea of 5% categories and 2% cash back on everything. Simple is good for busy folks. Amex needs to create a no-fee card that earns 5 points on rotating categories and 1.5 points on everything else. Also, make it automatic, so folks don’t have to worry about registering. Oh, and no minimum number of transactions requirement, as is the case with Amex Everyday Preferred. Simple is best.

In order to contain costs, cap 5% categories at $1000 in spending  per quarter, compared to $1,500 on Chase Freedom. Most normal people will be quite happy with that limit, and savvy hobbyists won’t bother with such a puny amount. Double win. Earning 1.5 points on everything is the new standard these days. Go any lower, and people will simply switch to 2% cash back.

And there you have it: a great card for an average Joe, and a viable competitor to Chase Freedom/Freedom Unlimited combo. Every three  months, like clockwork, miles and points blogs will announce new 5% categories. Boom. Free publicity for the card.

Name it  Everyday Simplicity card from American Express. You are welcome.

3) Make it possible to pull points between various MR and cash back earning cards.

It’s time. Amex, you will not be able to beat Chase unless you make the points fluid. Turn Amex Blue Cash Preferred into a point earning product and allow the ability to transfer points to MR earning cards on 1:1 basis. Also, adding the ability to combine the stash with that of your spouse or domestic partner is a must. Even Citi lets people share points for free. Come on, Amex! You definitely don’t want to be a second fiddle to Citi.

4) Make few much needed improvements to Membership Rewards  program.

Membership Rewards program is second only to Ultimate Rewards, IMHO. I wrote a comparison post awhile back with the latest updates. For some families, in fact, MR program is better. Namely, folks who like to fly Jet Blue and who live in Delta hubs. But that doesn’t describe the majority of people, and there is no way around the fact that Southwest and Hyatt are two of the most lucrative UR transfer partners. The ones you can’t get anywhere else.

Amex can’t steal those  from Chase, so they need to overhaul their own program. Few suggestions:

1) Make transfer to Hilton 1:2.5. The ratio of 1:1.5 simply doesn’t cut it. Lack of decent hotel transfer options is the achilles heel of Amex. You can usually buy Hilton points for around 0.5 cents apiece via various promos, so by that logic, using valuable MR points with the current transfer ratio gives you less than one cent per point. That’s ridiculous. Amex, you are now the sole issuer of Hilton cards, surely you can negotiate a better deal? IMO, 1:2.5 is a bare minimum exchange rate, comparable to 1:1 UR/Hyatt ratio. An occasional transfer bonus won’t hurt either.

Hilton hotels are everywhere, and regular families are more likely to drive than fly.

2) Make it possible to redeem MR points at 1 cent apiece. In all likelihood, most people won’t take advantage of this option. But it’s nice to know that it’s there if you need it. Having 1:0.5 ratio is simply unacceptable. Oh yes, but various gift cards you can get on 1:1 basis! Not good enough. You can buy many of them on Giftcardgranny at a substantial discount. Plus, you can’t pay power bill with gift cards to Carrabba’s etc.

Few months ago I cancelled my Amex Green card that earns Membership Rewards. I didn’t want to transfer 10,000 remaining points to miles speculatively, so just dumped them to Plenti program 1:1. Then I used  the stash at Winn-Dixie for a $100 discount. To me, it was almost as good as cash, but it was still a hassle. Plus, not everyone can utilize Plenti program as efficiently as I did.

3) Make MR points worth at least 1.25 cents toward ALL travel, similar to Chase Sapphire Preferred. Once again, a long overdue change. You won’t be able to compete with Chase unless you do this, Amex. In fact, why not make each MR point worth 1.35 cents? That’s still a modest return in value compared to 2% cash back cards, and it will give consumers another option.

All in all, MR program definitely has its strengths (like plethora of airline partners and instant transfer to most of them), but few tweaks would make it much more attractive to an average Joe.

5) Overhaul Amex Platinum and turn it into a viable competitor to Chase Sapphire Reserve.

Amex Platinum is the “cream of the crop” product, designed to lure a lucrative segment of high-spender/business travelers. Every bank is salivating at the prospect of cornering the market on this one. But it comes at a  steep price. Business travelers are usually very savvy, and demand maximum rewards and benefits  in exchange for their patronage.

What Amex seems to forget though, is that business travelers are just “average Joes” at heart. They want to keep it simple, so they can instead focus on spending time with their  family. They are already super busy and overwhelmed due to their demanding jobs and travel schedule, and don’t want to worry about taking advantage of expiring Uber credit each and every month. They also would prefer a straight travel credit each year rather than archaic allowance towards incidentals on ONE designated airline. Amex, get rid of this ridiculousness already.

Chase Sapphire Reserve is crushing it because it’s simple and straightforward. It also currently allows you to bring all of your travel companions (not just two) to Priority Pass airline lounges. Business travelers take vacations with their family just like average Joes, and many have more than one child.

Sure, some changes to benefits on CSR are probably inevitable, and Chase is even starting to float the idea of cutbacks (read the post on Doc) But they would have to seriously gut the card before Amex Platinum started to look better by comparison. Yes, some people will benefit from the latter, sure. Premium card market is not “one size fits all.”

But overall, CSR is designed for a savvy business traveler who likes to keep it simple. A top notch product. Amex has to make much needed changes or lose the segment entirely to Chase and Citi. Citi Prestige may not be as hot as it once was, but it’s still a decent premium card, ahead of Amex Platinum in many respects. Not to mention, 75k points bonus is getting  a lot of buzz.

Bottom line

I don’t claim to know the ins and outs of the banking industry. Obviously, it’s a delicate balance. Give too much in rewards, and there won’t be any profit to speak of. Give too little, and other banks will eat your lunch. However, American Express needs to overhaul its brand ASAP. They can’t seem to attract normal folks and business travelers are defecting to Chase in droves. It’s time for a change in direction. Your move, Amex.

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Author: Leana

Leana is the owner and founder of Miles For Family. She enjoys beach vacations and visiting her family in Europe. Originally from Belarus, Leana resides in central Florida with her husband and two children.

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27 thoughts on “What Amex Needs to Do NOW in Order to Stop Playing Second Fiddle to Chase

    • @Audrey Haha! Yes there is, and I knew of its existence when I wrote the post. There is no Simplicity Everyday, though. Banks are copycats, just look at Altitude Reserve. Hmm, I wonder where US Bank got its inspiration? I better trademark my new name ASAP, so Amex can pay me big $ for it. Winning! 🙂

  1. I think annual fee free MR card would be a game changer. I’ve had a freedom and an FU between my wife and me for as long as I’ve had credit cards. Given it earns UR that can only be used to transfer to partners when one of has a premium UR card, we always have a premium UR card in our rotation.

    Said another way: we tend to have premium UR cards because we have a non premium UR card that we are constantly earning points on. Isn’t that funny? I could just have the premium UR card and cut out the fee free version but I feel like a savvy consumer by doing it this way. y’all, I don’t have to make sense — I’m a consumer.

    Amex is too hard. It really is. I can’t use it at Sams Club or the farmers market. I can’t use it to pay my utilities online or my kids’ daycare. And our household is kind of their target market. Two millennial white collar professionals with a decent income, a stupid amount of expenses, and a good amount of business travel. Yet you want me to pay for the honor of always wondering if I can use you as a primary card or if I always have to have a back up? Not worth it.

    • Amex Everyday is fee free, also the Blue for Business Plus. I think they’re the only fee free cards that allow transfers to partners.

      • You are right! I was thinking of the EDP but the ED is free. Tina Fey commercials and all. Maybe worth an application in the future. The availability of acceptability is still an issue but shame on me for not giving Amex props.

    • @Cheapblackdad Audrey is correct. I should have added that info to the post. Amex has a real opportunity here with regular folks. Create a card that has rotating 5% categories like I’ve described in the post, and market it in conjunction with Amex Everyday or even Blue for Business Plus. Or maybe make points transferrable to begin with? Unfortunately, unlike Chase, Amex keeps MR program separate from cash back cards. Like you said, too many restrictions and barriers to entry.
      For many regular people, paying any sort of fee is a deal breaker. I know that for a fact, and I rarely pay one myself. Everyday Preferred is a great card, though. But once again, 30 transactions requirement is a turn-off. Amex needs to simplify and streamline its portfolio of cards. Of course, as you have correctly pointed out, Amex is still not accepted everywhere. That’s an issue, but I think having a back-up card is a good idea even with Visa and MasterCard in case there is a problem. Sometimes banks put a freeze on transactions when they suspect fraud. It has happened to me before.

  2. AMEN!!!! My Chase Freedom is my oldest card, and one that I love because of it’s $0 annual fee. However, I used to be loyal to my AMEX Gold, but parted ways when I just couldn’t accumulate the points to make it worth the annual fee (it’s frustrating that many vendors do not accept AMEX).

    We’re every day folk (not business travelers) who charge/spend quite a bit, and we’re seriously considering renewing our CSR because of the value we have received. Just received my TSA Precheck credit (bummed that I didn’t have time to do Global Entry, but maybe next time), the $300 travel credit comes in handy, but we haven’t been able to use the Priority Pass yet (maybe soon).

    AMEX’ 1x per lifetime bonus, their annual fees, their monthly spending rules/credits, and lack of great transfer partners has made this husband and wife team look elsewhere. I had a vendor yesterday cancel my order because I used an AMEX card and they couldn’t give me a reason. Unbelievable!!! Now I have to reorder the item, and will use a Chase card instead.

    • @Stephanie I hope Amex people read your comment because I think it echos how many feel about their credit cards. Convoluted rules, hoops to jump through, lack of acceptance, all those things are hurting their bottom line. That’s why I said Amex can’t just be as good as Chase, it has to have an edge of some sort. Introduction of Blue for Business Plus is a positive development. Unfortunately, it’s a business card, so most normal people won’t apply for it. Maybe if they introduce a personal version…Now that would be big news! A no-fee card that earns 2 flexible points per dollar on everything. But I doubt that will happen.
      Ironically enough, I’m debating on whether to renew CSR or not. I probably won’t, but I’m surprised that I’m having a hard time with this decision.

    • Exactly. We’re keeping one of our CSRs. It’s worth it. Accepted everywhere, and has a good reward structure.

      I think chase will be pleasantly surprised by how many people keep the card past the first year.

      • @Cheapblackdad That’s what Chase was betting on when it offered that crazy lucrative 100k offer!

      • @Cheapblackdad – I agree. I never keep cards with annual fees, but we’re thinking about keeping our CSR as well. I just *wish* that you could get a second authorized user card without a fee. Even though I agree that Chase caps Amex – we still need to keep the pressure on Chase! We want more! We want more!

  3. Also keeping my CSR and nixing my Platinum when the annual fee posts. I just can’t justify the $550 annual fee. Even with the airline credits. I now have to pay to use the Centurion lounge since I have a family of 4. Amex is too hard.

    • @ Natasha I totally understand. That $550 fee on Platinum is just plain insane for most people. Sure, the card comes with many perks, but still. Amex needs to overhaul it ASAP and make it look decent in comparison to CSR. I’m not sure they can afford it, but they can’t afford not to.

  4. Chase cards have the best bonuses for sure…. but they have the 5/24 rule…
    Much prefer Amex’s once per “lifetime”… rule

    I love UR (I use them almost exclusively for Disney cruises — 1 per year), and occasionally to top off a hyatt reward. UR > MR for sure. But Amex has some nice MR earning cards Everyday preferred anyone?

    Amex concierge and lounges > Priority Pass and Chase concierge. Definitely some nice benefits you can squeeze out of Amex’s relationships in entertainment —

    One way I imagine the premium Amex cards will get better relative to the CSR (which I have and plan to keep) is unfortunately that Chase ends up nerfing the CSR over time. I love the CSR, but the real value for me is 1.5 cents for all the URs that my Ink Plus and Freedom Quaterly cards. If they cut out this benefit, or the ability to transfer from other UR earning cards I’d drop it immediately.

    To be honest, as someone who plays the game…. I LOVE the strict rules. Tell me straight up what you allow… and I’ll follow them to the letter. Thanks Amex.

    Let me ask you guys a question — what non credit card gamer/travelhacker/points hobbyist will even pay attention to the fine print to be scared off. My doctor and lawyer friends who have the Amex platinum do so for the perks and really doubt they have any clue about the fine print. Also I don’t think Amex will actually enforce the rules against non-gamers. IE if you are a “regular” customer and buy 1K of gift cards in addition to your $2K in standard purchases I doubt Amex even takes a look.

      • @Joe Well, I’m canceling CSR because I’m cheap, not because it’s not a good card! I just don’t think the math in my case adds up. However, I’m somewhat of an anomaly in this hobby. I burn my points like there is no tomorrow, rarely fly, and like to buy my own travel insurance. Most have a decent UR stash and fly regularly. For those folks, there is a compelling case for sticking with the card. Plus, I’m averse to annual fees, period.
        You do bring up some good points, and I have no doubt many will cancel CSR. But many will not. I’m not sure Chase will come out ahead on this card after investing in it heavily via 100k points bonus, but they are clearly betting on it.
        As to Amex Platinum cards, there is no question that it’s a great product for the rich who like the finer things in life. No sarcasm, by the way. However, most business travelers don’t fall into this category. Many simply want to earn the most points per dollar and have access to great transfer partners. Few additional perks like lounge access, primary car insurance, simple travel credit etc. make it an all-around great travel card. Obviously, I’m not saying CSR is best for all high spenders. I’ve even mentioned in the post that for some, Amex will be superior. However, if Amex was doing so hot with Platinum, why would they proactively give people points as a Thank You for keeping the card. I’m sure youv’e seen reports that folks got 20k, and as much as 50k points from Amex for no reason. Why do that if you have such a compelling product to begin with? Personally, I think American Express needs to reavaluate what all these finer perks are costing them, and perhaps channel the money into making their products more straightforward. Changing incidentals credit on one airline to something similar to CSR is a must IMO. But it’s only my opinion, and maybe I’m off on this one.

    • @Joe You actually bring up some good points. I totally agree with you that Chase will nerf CSR Eventually. Perhaps Amex is waiting to see what those changes will be like before they make any improvements to Amex Platinum. I just think they squandered an opportunity when CSR first came out. They should have changed travel credit right away to match what Chase was offering etc. Being a copycat would not have been such a bad thing. Yeah, some Amex benefits are superior to Chase, no doubt. But overall, CSR is the king of premium cards right now. As long as Chase goes easy on cutting benefits, it will probably stay that way for awhile.
      And I agree, Amex Everyday Preferred is definitely a great card. I’ve mentioned it in the post as well. Unfortunately, any time I mention it to a normal person, they feel it’s too complicated. Amex needs to do away with 30 transactions requirement. Most normal people don’t want to worry about it. Sure, many in the community love the card and maximize bonus categories. But Amex is probably losing money on them. They launched the card in order to capture middle-class segment, and I don’t think it worked. I could be wrong, of course.
      As far as strict requirements in T and C go, I hear you. I don’t have a problem with clearly stating the rules, but the way they were stated. I think the language is way too strong. Sure, most normal people don’t read the fine print. Still, the news was blasted on many blogs, including DoC. Many newbies will see it when they Google Amex card.
      Also, some requirements are over the top, like not being able to cancel the card for 12 months. That means you are guaranteed to get hit with a second annual fee. Sure, you can get refund within 30 days, but it’s stil a hassle. Many people may decide that the card is not for them, why should they be forced to renew it? I think 9 or 10 months requirement would have been more reasonable. Also, saying that you can only apply via links intended for you is a bit vague. There are many Amex card links floating on the internet. How is a consumer supposed to know with 100% certainty that this or that link is not targeted, especially if application goes through.
      Still, I totally see what you are saying and appreciate your comment!

      • I think the CSR is fantastic for people in the hobby, MS (Ink Plus)/maximizing (freedom quarterly bonuses), and URs are great.

        but for the majority of people who were going gaga over the card, the main draw initially was the sign up bonus 100K pts plus 2 $300 credits offsetting the $450 annual fee. But now the question is who keeps the card and who doesn’t… now the bonus is 50k and cardmember year $300…..

        If you’re just a fairly well off/busy person who values perks and benefits, I’d argue that you probably like the Amex Plat better. Their customer service is generally superior. Their concierge gets you reservations to nice dinners that may be hard to book. You can get seats to the sold out shows (Hamilton) And if you don’t have a large family the Amex lounges are nicer than most PP lounges.

        Not to mention Amex offers — if you get a free gold Amex sub card that’s 2 cards that are amex offers eligible that’s probably good for $100-200 per card in value every 12 months.

        You’re saying how great the CSR is…. but…. you’re not keeping it! SMH. And even though, I don’t think it’s that great for the normal guy, I’m keeping it because of all the UR I earn from other cards. On the other hand, I cancelled my Amex Mercedes Platinum.

      • @Leana – and mentioning normal people. Many people are afraid to trust credit companies in the beginning. Will they actually pay the bonus? Will there be a trick? If a nervous potential applicant comes along and reads that fine print, it might be enough to scare them off. Even though, as Joe points out, some don’t bother with the fine print, some nervous normal people do!

  5. @Joe – Hey! Thanks for the reminder on the Amex Concierge service. I want Ed Sheeran tickets in NZ and they are sold out. I wonder if Amex can help me! Or do they only do that in US?

    And finally, @Leana – You. Rock. Tell it like it is! Anthony Scaramucci! Hahahahaha! More politics and don’t apologize. I laughed out loud. Actually, I’m suddenly curious…are there any Republican Miles and Points hobbyists out there? Hmmm? (wondering voice)

    • @Amanda I hope you get those Ed Sheeran tickets! I like his music quite a bit, too. As to Scaramucchi rant, I assure you, it wasn’t meant to be political. I think the guy will end up in history books, best reality show on TV! I’ll miss him. LOL
      Honestly, I want to keep politics out of my blog, and in fact, I try to stay out of politics, period. Your comment made me think that perhaps I should not even go down that road, not even as a comedy relief.

      • Oops! Sorry!

        The Scaramucchi but *was* funny.

        Tell it like it is! I meant that toward AmEx.

        And I agree, it’s not really political, just funny.

        And feel free to to edit my comment to keep the politics out. Your blog. I don’t mind. Was just sharing thoughts as I seriously did just start to wonder!?

    • @Amanda Please, don’t apologize! You did nothing wrong. I’m not going to remove your comment. Why would I? You made a reasonable assumption based on my write-up. Oh, and I’m actually neither a republican nor democrat.

  6. @Leana great post and I’ve been thinking the same thing lately, especially related to number 4 and 5. We have a large family trip to Hawaii in November and we’ll be staying in a timeshare for a week. My wife and kids and I will be staying a few extra days on the island and I wanted to book 2 nights at the Hilton Hawaiian Village. I thought this would be a good use for my MR points since Hilton is a partner. Boy was I wrong. For two nights it would have cost me 70K MR transferred to Hilton, or 64K booked through the Amex travel site. I ended up getting the same room with 33K UR through the Chase portal. That’s half the amount of points needed and Hilton isn’t even a partner of Chase.

    Regarding number 5, just the other day I was out with a group of people and pulled out my wallet to pay for dinner and of course I went straight to my CSR for the 3X dining bonus. It hit me then that Amex gives me no reason to use my Platinum card in a social setting. The only bonus categories it gives you are on purchases made online or over the phone. If it’s really supposed to be a status symbol and something that you should be proud to pull out of your wallet then I don’t see why they give you zero incentive to use it when you’re out and about. I travel a lot for business and get a lot of value out of the other perks that the card offers so that’s the only reason why I have it but I feel like they really could benefit from better bonus categories. The 5X hotels through Amex travel is basically useless for me as I don’t get to use the gold elite status that the card gives me. I’d much rather book direct if I’m not using points and pay with my CSR, that way I get 3X UR and can take advantage of my gold elite status. I actually think the PRG has better bonus categories and would give people incentive to use it day to day.

    For now I’ll just keep it in my wallet to access non-Priority pass lounges (Oakland airport which I travel out of twice a month has a lounge that does not accept Priority pass but accepts Platinum card) and continue putting my spend on Chase cards. I hope someone from Amex reads this and takes your advice! Thanks again for all the great tips.

    • @Robert Thank you so much for sharing! It’s nice to hear a business traveler perspective. I don’t fall into this category, obviously, so I was largely making assumptions. I agree with you, Amex is not making it compelling enough to actually use the Platinum card for purchases. True, many people renew it for the perks, but the perks cost a substantial amount. If there is no spend to make up up for them, Amex loses money on that customer, especially one who is well versed in the miles and points hobby.
      The Hilton transfer ratio needs to be adjusted ASAP. It’s simply not competitive with Chase. At the very least, they need to add an extra incentive to redeem MR points on hotels. I just think some sort of an overhaul is in order, or Chase will dominate this segment of the market. People are creatures of habit, and once they get used to CSR, they will be reluctant to switch back.

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