Low Roller

Not 50k on groceries, but 50k on groceries + gas + utilities + restaurants + travel + gifts + clothing... I put everything on a credit card for points (even if it's just a take out coffee). Acceptance varies alot depending on where you live. The biggest grocery store around here doesn't take Amex but many restaurants do.

blaz

Out of the items you list, the only item on your list that usually demands high spend is travel. In my personal example, roughly 50% of my yearly spend on credit cards is for travel. And yes, I put everything I possibly can on a credit card, from a $2 coffee to a $15k furniture purchase.

With travel, hotel and air fare are really the most expensive items, and there again I don't know of any many vendors who accept credit cards but don't accept Amex.

HawkeyeFlyer

I think your comments support exactly what he is saying. More people carry or want to carry a Visa

Low Roller

My point is simply that it isn't just big ticket items that matter. Add up all the small purchases over a year and it adds up to a significant sum. We spend more on restaurants than travel.

blaz

Right, but you can use Amex at restaurants, just not all of them. So really, Amex is loosing out on only a small percentage of potential revenue. Yet if they lower the interchange fees, they potentially loose a huge amount of revenue.

HawkeyeFlyer

Dining is by far the largest item I run through my Visa, followed closely by Insurance and Utilities (Cable, Wireless, gas +electric)

Low Roller

Unless they attract alot more customers who don't currently have an Amex. I don't know if it will work, but that seems to be the strategy. Amex Canada has a new Cobalt card that is aimed directly at millennials offering lots of bonus points for everyday purchases.

blaz

Indeed, they are trading an immediate and noticeable drop in revenue for the potential minor increase in revenue from acquiring new customers. Seems like a really risky strategy.

HawkeyeFlyer

I am sure they have run some serious numbers with their actuaries but I agree it is a big risk

beachmouse

While that's been the image they've wanted to project, the reality is that the've been courting the middle class with good credit mass market for decades. My schoolteacher parents' first charge or credit card was an American Express green card they got somewhere around 1980 because we were making a family trip to Disneyworld, and they'd done the research on how a charge card made paying travel expenses easy compared to cash/check/traveler's check. (I was too young to hear the details of why they got the Amex instead of a Master Charge card)

RooseveltL

Good idea but maybe too late.
With the introduction of debit cards for transactions with V/MC logo - everyone basically has V/MC in their wallet and if a merchant claims they would rather not accept Amex - you have an alternative.
Business travel Amex advantage (with its travel agency, accounting reconciliation) has too many competitors with self-serve travel online and cheaper competitors with V/MC.
The Amex advantage has pretty much disappeared over the years for services/concierge with the Internet.
Outside of Pre-Sales concert or shows or special seating at an event (which other financial institution also offeR) - I think the Costco lost was a big deal. After switch over at Costco (gas purchases and store visits) - I basically have zero reason to use Amex over my other V card unless I anticipate dispute of a transaction which Amex is more reliable.

I equate it to a changing landscape in the market place - at one point Blackberry had the best game in town and wasn't prepared for the competitior in iOS or Android plus faster mobile connectivity. BlackBerry could've lowered its fees, license, but hard to reduce profits in anticipation of what is ahead vs. forced to reduce because of reduced profits in the market place.

Beltway2A

Not everyone fits your spend profile. Aside from rent, my highest personal spend is on F&B (whether at grocery stores or dining retail). I wouldn't avoid a restaurant or deli I like because they don't take Amex, but I'd love for them to start accepting it.

Someone who lives in an area where things like rent and food are cheap, but other things, like online retail, are fixed in price may feel differently.

Fiordland

Not certain where the 90% comes from. In Canada there is no bank that issues Discover cards and the vast majority of merchants don't accept such things. I think Sears had some Discover logos on there tills before they went bankrupt.

I think the problem with limited AMEX acceptance is corporate accounts. I have been with two employers that have had AMEX corporate programs and at the end of the day they switch to Visa. The reason is when staff travel they want flexibility in picking the restaurant they go to and don't want to deal with the extra paper work of putting expenses on a personal card and then claiming it back. The employee does not want to deal with multiple streams for processing claims.

I run a small business now, have an AMEX Platinum. Still have to have Visa business cards. The guys that sell office furniture don't take AMEX. The printing company does not take AMEX. The independent coffee shop I sometimes like to have meeting at does not take AMEX. The computer hardware and office supply store does not take AMEX. The online portal for renewing the business license does not take AMEX. The lawyers office does not take AMEX. I probably run about 20% of my business changes on AMEX (mostly airlines, hotels, online groceries for the office and some restaurants). For everything else there Visa.

They need to address acceptance at Business to Business retailers and service providers if they want to retain business customers.

mikesyr18

We're talking about U.S acceptance.

Fiordland

If it is a travel card for someone who does not travel outside the US, then Discover may make sense.