American Express profit slumps 58 percent as defaults rise

American Express Co., the biggest U.S. credit-card company by purchases, said first-quarter profit dropped 58 percent as consumers cut back on spending and defaulted on more loans.

[david]

This company will be a problem in the future. They made a major strategic error, in combatting this crisis.(It is not what you say, it is how you say it).

The 18% drop in volume will only get larger. AMEX decided to pull back on credit by using the following strategy. Instead of blaming the economy for the need to make changes to their clients accounts they decided to use the philosophy, of blaming the consumers. Most people received reductions in credit lines or closed accounts with a statement that this decision was based upon information from "your" credit report. In most cases, people credit scores have not been affected, and they basically blanketed everyone.

They have caused tons of bad will, which will cause an exodus similar to that of Sprint PCS. Most people have an option, especially the ones with good credit.(you know the old adage, do a good job and people will tell 2 people. Do a bad job, and they will tell 50).

This 18% drop will increase and all the good card members will leave, and they will be left with the bad debtors. I for myself moved my primary monthly expenses to a discover card that was thrilled for the business and treated me like a desired customer.

I spent 140,000 for the past 4 years with AMEX, and I am glad to speak with my wallet..

As far as investment goes, be very careful investing in this company..

If they treat their best customers like this, they are going to be in a lot of trouble. I have 4 family members who also used this as a primary card, and I have influenced them to make the change..

I believe this will happen across the board.. Kenneth Chenault, should be replaced. He has made the huge mistake of over reacting, and he will be the down fall of this once great company.

The 50% drop in profits for this quarter is just the beginning. If the government did not change the bookeeping rules for mark to market accounting, it would have been much uglier. Don't be fooled by the rhetoric..

[jimmy48]

david wrote:

This company will be a problem in the future. They made a major strategic error, in combatting this crisis.(It is not what you say, it is how you say it).
The 18% drop in volume will only get larger. AMEX decided to pull back on credit by using the following strategy. Instead of blaming the economy for the need to make changes to their clients accounts they decided to use the philosophy, of blaming the consumers. Most people received reductions in credit lines or closed accounts with a statement that this decision was based upon information from "your" credit report. In most cases, people credit scores have not been affected, and they basically blanketed everyone.
They have caused tons of bad will, which will cause an exodus similar to that of Sprint PCS. Most people have an option, especially the ones with good credit.(you know the old adage, do a good job and people will tell 2 people. Do a bad job, and they will tell 50).
This 18% drop will increase and all the good card members will leave, and they will be left with the bad debtors. I for myself moved my primary monthly expenses to a discover card that was thrilled for the business and treated me like a desired customer.
I spent 140,000 for the past 4 years with AMEX, and I am glad to speak with my wallet..
As far as investment goes, be very careful investing in this company..
If they treat their best customers like this, they are going to be in a lot of trouble. I have 4 family members who also used this as a primary card, and I have influenced them to make the change..
I believe this will happen across the board.. Kenneth Chenault, should be replaced. He has made the huge mistake of over reacting, and he will be the down fall of this once great company.
The 50% drop in profits for this quarter is just the beginning. If the government did not change the bookeeping rules for mark to market accounting, it would have been much uglier. Don't be fooled by the rhetoric..

When I opened my Am Ex account back in Nov. they were all over me with happiness and welcome letters. I have a very high and excellant credit score. Never been late or defaulted on any loans. I used the card twice and made the payments on time. In Feb. I received a letter stating my account was being canceled. They made up some lame excuse about me having too many open accounts. Why didn't they see that when I opened the account? It was there for them to see and they approved the account. They had the nerve to then tell me that maybe sometime in the future I could reapply to reopen my account. NO WAY IN HELL!