At American Express (AXP) customers are not called customers. They are called “members.” Warren Buffett has probably been a member since 1955. George Soros may go all the way back to 1950.
Amex prides itself on its members. It runs ads about the famous ones and talks about all the things that they can do with their cards.
Being a member, however, is not what it used to be. The company is buying out some card holders for $300. That does not seem like much for the members, some of whom has been loyal customers for years.
According to the AP, “We sent the offer out to a select number of card members,” said Molly Faust, a company spokeswoman. “We are looking at different ways that we can manage credit risk based on the costumers overall credit profile.”
Between the lines, that means that customers who are not likely to pay their balances are being dumped. That means more people in the economy without access to credit, which means less consumer spending.
No one expects Amex to put patriotism above profit, but as banks and credit card companies cut loose a large portion of their customer bases, the time it will take for the economy to recover will be stretched further into the future.
Douglas A. McIntyre