Sustainability of the EveryDay

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Vattené
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Sustainability of the EveryDay

Postby Vattené » Tue Oct 13, 2015 10:26 am

I can't help but wonder what the chances are of the EveryDay sticking around long-term.

It's the only MR-earning card with no AF. The charge cards and EDP have good reasons for an AF, but I could also easily see Amex wanting there to be some sort of "cost" in participating in the Membership Rewards program. They want MR to be seen as valuable, and having to pay to play makes it seem valuable. If you have to pay something just to participate, you're more likely to be loyal and try harder to get value out of them...sort of like how warehouse clubs have annual membership fees. You can get a lot of net savings out of them, but having to pay something upfront every year gives you a hard incentive to keep coming back and spending money THERE.

The biggest reason for my speculation is the existence of the Green card, a staple of the Amex lineup that got a lot less appealing with the roll out of the ED. I doubt the Green and ED will stick around without changes to one or both. Of course cards' benefits in general are more or less always in flux, so who knows what each will look like even a few years down the road. Currently, the ED seems to me to be a far better value for the customer and far less profitable to Amex. The Green may have more "fringe benefits," but the ED earns more MR and has a bonus category. Not saying they're going to cancel it anytime soon, just that this seems out of balance to me and I'd expect Amex to make changes to the cards over time to correct that.

Optimistically, Amex added a product that made them more competitive. Pessimistically, they're not going to stand for a card having no AF and being more valuable than the Green for too long.

I'm going to enjoy earning MR at no AF while I can, but - like any card - I won't expect I'll be using it (at least in its current form) forever.

Thoughts?
-Vattené
FICO-8:
EX - 809 (11/16) | TU - 803 (11/16)
Primary Cards:
American Express EveryDay - $20,000 (10/14)
Discover it - $23,000 (2/14)
AU on Barclay Sallie Mae - $10,000 (8/15)
plus several store accounts of varying usefulness now


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CarefulBuilder14
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Re: Sustainability of the EveryDay

Postby CarefulBuilder14 » Tue Oct 13, 2015 11:06 am

I think Amex's higher merchant fees leave plenty of room for profitability on the ED.

Paying out 2.4 MRs on groceries and 1.2 MRs on everything else really isn't that expensive for Amex when they have a low-risk pool of customers.

I don't think MRs are going to get much better. Keep in mind they just nerfed the MR-to-Avios conversion rate, which makes short domestic American Airlines flights more expensive. Not offering credits on Small Business Saturday makes light-spend accounts less of a rewards drain.

ED is an MR-earning card without an AF, but it's also a cheap-looking card without the distinctive appearance of charge cards. It's the charge cards where they promote the image of luxury. ED is also not the first MR-earning card with no AF. There was Blue, and Blue cards are now being converted to the better ED.

From a value perspective, PRG and Platinum, and arguably Zync and Centurion, are generally the better deals among charge cards.

I don't know what will happen to Green and Gold. CSP just blows them out of the water value-wise. Plus, people who need to feel special with a card with the Amex Centurion on it are going to be vulnerable to CSP's metallic seduction. :ppp
Wallet: Prestige CSP SchwabPlat Freedom It Hyatt SallieMae AAPlat
SD: Arrival BrooksBros BCE ED IHG
Letting new accounts cool off since May
Really not sure what I'll add next or when

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Vattené
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Re: Sustainability of the EveryDay

Postby Vattené » Wed Oct 14, 2015 3:48 pm

Oh I definitely think the ED is profitable, I just speculate it's less profitable than the Green card. I'm sure they're even making money off of me, someone that never pays interest and (at least currently) doesn't pay annual fees. Hell, as far as I know there are enough revolvers with an ED regularly paying interest that "paying out" 1.2 MRs is nothing. Their customers may be lower risk in general, but it wouldn't take many.

The ED just seems to be too good of a deal to last for too long. Kind of like how the Cash+ was a great deal when introduced but has since been nerfed considerably. I should just be less cynical.

The Green might be a cash cow for Amex, though. I'm sure there are people that can use its benefits, but overall I would think most wouldn't get much value from it. Of course they can put enough spending on it to get a net gain from the card, but I just mean the marginal value over ED as an alternative.
-Vattené
FICO-8:
EX - 809 (11/16) | TU - 803 (11/16)
Primary Cards:
American Express EveryDay - $20,000 (10/14)
Discover it - $23,000 (2/14)
AU on Barclay Sallie Mae - $10,000 (8/15)
plus several store accounts of varying usefulness now

Nixon
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Re: Sustainability of the EveryDay

Postby Nixon » Wed Oct 14, 2015 9:18 pm

1.2 MR/$1 ain't crap honestly with all the devaluations. The card isn't worth much without a partner charge card with travel benefits (for those who travel often)
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CarefulBuilder14
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Re: Sustainability of the EveryDay

Postby CarefulBuilder14 » Thu Oct 15, 2015 12:32 am

If 2% cash cards are sustainable, I don't see why ED can't be.

I don't see it as "too good of a deal", considering that (I believe) a lot of people like to transfer directly to Delta for simplicity (or bag/status perks). Delta miles usually aren't that valuable. Avios are.

Green is just a remarkably bad (prime) card, and not a good comparison candidate to determine what is a great one.
Wallet: Prestige CSP SchwabPlat Freedom It Hyatt SallieMae AAPlat
SD: Arrival BrooksBros BCE ED IHG
Letting new accounts cool off since May
Really not sure what I'll add next or when

takeshi
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Re: Sustainability of the EveryDay

Postby takeshi » Thu Oct 15, 2015 9:06 am

Vattené wrote:They want MR to be seen as valuable, and having to pay to play makes it seem valuable.

If that was a concern for them then why would they have created the ED as a no AF MR card in the first place? Some may question AmEx's recent history but they certainly considered this before releasing the product.
Vattené wrote:I'm going to enjoy earning MR at no AF while I can, but - like any card - I won't expect I'll be using it (at least in its current form) forever.

Thoughts?

That's pretty much my though with any card. Rewards are just gravy and rewards cards are subject to nerfing, being discontinued, etc. There's no good way to really assess the sustainability of any program without the specific details that just aren't disclosed. It's not just a matter of a specific feature such as the AF but the overall numbers.

Vattené wrote:Oh I definitely think the ED is profitable, I just speculate it's less profitable than the Green card.

Less profitable and unsustainable aren't necessarily the same thing. I really have no idea how to meaningfully assess either for either card without the details.

Given how many consumers seem to focus on AF as a decision point to open and close without much other thought put into the process, I wouldn't be surprised if AmEx is hoping to rely on volume of cardholders for the ED. The swipe incentive promotes volume of transactions as well.
Last edited by takeshi on Thu Oct 15, 2015 9:15 am, edited 1 time in total.

Vermonster
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Re: Sustainability of the EveryDay

Postby Vermonster » Thu Oct 15, 2015 9:15 am

CarefulBuilder14 wrote:If 2% cash cards are sustainable, I don't see why ED can't be.


/thread

DC, QS, Venture, Freedom, It, Fidelity, ect. All very good cards for the consumer, and apparently the banks.
Chase Freedom $9k~~Chase Sapphire Preferred $6.5k~~Amex Blue Cash Preferred $12.4k~~Citi Double Cash $4.7k

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Vattené
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Re: Sustainability of the EveryDay

Postby Vattené » Thu Oct 15, 2015 9:30 am

CarefulBuilder14 wrote:If 2% cash cards are sustainable, I don't see why ED can't be.

I don't see it as "too good of a deal", considering that (I believe) a lot of people like to transfer directly to Delta for simplicity (or bag/status perks). Delta miles usually aren't that valuable. Avios are.

Green is just a remarkably bad (prime) card, and not a good comparison candidate to determine what is a great one.


That's actually a much better way to frame this. It's NOT that ED sticks out as a good value, but Green sticks out as a bad one. Perhaps a better title would be "Uselessness of the Green."

ED/EDP are workhorse rewards earners, higher tier charge cards have perks, and Green gets the worst of both worlds.
-Vattené
FICO-8:
EX - 809 (11/16) | TU - 803 (11/16)
Primary Cards:
American Express EveryDay - $20,000 (10/14)
Discover it - $23,000 (2/14)
AU on Barclay Sallie Mae - $10,000 (8/15)
plus several store accounts of varying usefulness now

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Vattené
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Re: Sustainability of the EveryDay

Postby Vattené » Thu Oct 15, 2015 9:40 am

Vermonster wrote:
CarefulBuilder14 wrote:If 2% cash cards are sustainable, I don't see why ED can't be.


/thread

DC, QS, Venture, Freedom, It, Fidelity, ect. All very good cards for the consumer, and apparently the banks.


Also I know I can't really get my head around just how much interest people are willing to pay banks. Banks are making good money off these types of cards, and it ain't from the difference between discount rates and rewards paid out to cardholders.
-Vattené
FICO-8:
EX - 809 (11/16) | TU - 803 (11/16)
Primary Cards:
American Express EveryDay - $20,000 (10/14)
Discover it - $23,000 (2/14)
AU on Barclay Sallie Mae - $10,000 (8/15)
plus several store accounts of varying usefulness now

kdm31091
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Re: Sustainability of the EveryDay

Postby kdm31091 » Thu Oct 15, 2015 11:02 am

The Green is merely an oudated product that for some reason they still offer. Not sure why anybody would want it really, unless they can't get approved for a revolver.

Consider also the Amex Blue -- not the Blue Cash or Blue Sky, just "Blue from American Express". Earns 1 MR per dollar. No sign up bonus. No category bonuses. It is a revolver, but what is the point of getting it over the Everyday that at least has POTENTIAL to earn more than 1 MR per dollar?

They need to axe the Green and the Blue IMO if they are keeping the Everyday.



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