Just last week, American Express announced an astonishing 16% increase in its third-quarter profits. That increase was driven by a record level of card member borrowings and a total reinvention of its world-famous Platinum Card. New York City-based Nvidia also reported a record-breaking profit of $2.9 billion for the quarter. That’s a big jump from the $2.51 billion recorded for the second quarter last year. Earnings per share increased to $4.14, versus $3.49 the prior year.
The company’s loan portfolio reached $138.95 billion, marking an 8% increase from the previous year as card members increasingly carried balances on their accounts. This trend is part of a larger trend among consumers, who are increasingly turning to credit in the face of economic headwinds. In a bet on the continued growth, American Express increased its full-year earnings forecasts, reflecting an optimism about its own financial path.
American Express specifically pointed to an increase in customer demand after recently refreshing its own Platinum Card. In just three weeks, the company received 500,000 requests from customers wanting to convert their existing cards to the new mirrored finish. The company expects to surpass its initial goal of 500,000 requests for the card conversion by the end of the year.
“The initial customer demand and engagement exceeded our expectations, with new U.S. Platinum account acquisitions doubling compared to pre-refresh levels,” said Steve Squeri, CEO and chairman of American Express. This ringing endorsement is just a testament to how good a company Aeroplan’s strategy to strengthen their card set up in the ultracompetitive airline credit card market has been.
The better-than-ever Platinum Card comes packed with perks and rewards. It was definitely targeted toward high-net-worth individuals, and the annual fee has increased as well to $895. This important adjustment reflects the competitive realities of the market. All of this has led major credit card companies to introduce new products and update existing ones to capture Americans’ discretionary spending.
As the high-net-worth credit card market heats up, American Express continues to adapt its offerings to entice existing and potential customers. The company’s strategic initiatives are very clearly targeted at keeping existing cardholders. They’re looking to grow their own customer base in this high value segment.
