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Recovery by American express gets more aggressive

Wednesday, January 19, 2011

The third largest card issuer in the US is American Express, and it offers credit cards and other charge card products as well as other travel related services to its customers as well as businesses worldwide.

The prime customers are generally the ones who own an American Express card, as it offers them better benefits in comparison with the other cards. American Express offers better reward packages for its customers. The most distinguishing feature of all is the fact that, there is no fee charged on balances, which are paid before the end of the grace period. Due to this, American Express manages to maintain the lowest rates, when it comes to charge offs.

The charge off rates are at 4.4% at American Express, and this is a great advantage as the card company can issue cards in a more aggressive fashion, while the economy recovers completely. This way American Express can tap the consumer spending during this recovery phase.

American Express has always had an affluent customer base to its creditors and has known to be conservative when it comes to issuing cards, in spite of having the lowest charge offs. Hence, the losses suffered during the recession in 2008 to 2009, was also the lowest when compared to the entire credit card industry; which witnessed, the peak charge-offs that exceeded 10.6% when compared to the averages, prior to the recession at 3.2%. American Express has the lowest charge-offs, and this upward trend will have little or no effect on the card.