American Express profits fall on credit crunch

American Express forum. Talk about AmEx credit cards like Blue, Gold, Platinum, Centurion, and more.
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Mogul of Pineapples
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American Express profits fall on credit crunch

Postby Mogul of Pineapples » Mon Jul 21, 2008 10:09 pm

Amex just released their profits today for the last quarter and they are down over 38%. Their business was doing good (up to 90 mil cards from 80 a year ago) but because of the increase in delinquencies their profits fell. They had to set aside almost 2 billion to cover losses this quarter.

I was surprised to see this because most Amex cardholders have more money than the people that usually have cards from other issuers.
Disclosure: I am a moderator/paid staff of this site, which does have advertising relationships with some credit cards that are discussed and linked to. Regardless, anything I say is my honest opinion.

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magyar1045
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Postby magyar1045 » Tue Jul 22, 2008 9:01 am

Sign of the times. Look at Citi, B of A, and others. IndyMac Bank was shut down. More banks will follow

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fffresh
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Postby fffresh » Tue Jul 22, 2008 10:52 am

America has been living on a binge of paying for the good life with housing. Now we are mortgaged up to our eyeballs because speculators thought it would be a good idea to try driving up the price of housing double digit amounts every year.

Now we're paying the price for it all...

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Mogul of Pineapples
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Postby Mogul of Pineapples » Thu Jul 24, 2008 11:46 pm

People have gone debt crazy but I'm sure Amex will recover fine. They're a sound company that has been around since before the great depression so I don't think something like this will keep them down.
Disclosure: I am a moderator/paid staff of this site, which does have advertising relationships with some credit cards that are discussed and linked to. Regardless, anything I say is my honest opinion.

Current Cards:
American Express: Blue Cash, Simply Cash Bank of America: WorldPoints Platinum Plus Chase: Amazon, British Airways, Cash Plus Rewards, Freedom, Ink Cash Citi: Thank You Premier, Dividend Platinum Select Discover: More
Primary Everyday Card: American Express Blue Cash
Primary Travel Card: Chase Sapphire Preferred

Floppster
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Postby Floppster » Wed Oct 01, 2008 8:10 pm

The reason why Amex currently has these is issues is probably because they invested so much into credit instead of charge cards. Young people all of the sudden where able to get an Amex even when they had bad credit. Certainly when Amex started issuing CC's instead of charge cards in 1989 they did try to give them to the top of the food chain. Wealthy people which just didn't want to pay the annual fee. Anyhow at the end American Express as the largest Travel Agency in the world is doing really good :D
Intellectuals solve problems. Geniuses prevent them.
- Albert Einstein 1879-1955

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Mogul of Pineapples
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Postby Mogul of Pineapples » Wed Oct 01, 2008 9:35 pm

American Express Bank and Ameriprise were spun off.... so much for making money in those divisions.

Amex recently announced they're going back to their bread and butter and aiming for more creditworthy customers. It will take time to see if that happens or not though.

It's a catch 22 because they can issue cards to everyone which will might make more money, but it will cheapen their image. Then they can be exclusive and issue fewer cards which may give them more reliable customers, but less of them.

The only way they will get charge cards to be popular again is smart marketing like they did with the Centurion cards. Not even the Amex Platinum is prestigious enough to be worth the $450 annual fee for most people.
Disclosure: I am a moderator/paid staff of this site, which does have advertising relationships with some credit cards that are discussed and linked to. Regardless, anything I say is my honest opinion.

Current Cards:
American Express: Blue Cash, Simply Cash Bank of America: WorldPoints Platinum Plus Chase: Amazon, British Airways, Cash Plus Rewards, Freedom, Ink Cash Citi: Thank You Premier, Dividend Platinum Select Discover: More
Primary Everyday Card: American Express Blue Cash
Primary Travel Card: Chase Sapphire Preferred

jak
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Postby jak » Sun Oct 12, 2008 8:23 pm

Who's profits aren't falling on the credit crunch right now is the question... they all are!

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Postby fffresh » Sat Oct 18, 2008 2:09 am

From what I recall American Express releases quarterly earnings this monday so we will see some hard numbers then.

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fffresh
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Postby fffresh » Tue Oct 21, 2008 5:48 pm

American Express announced earnings yesterday. Their 3rd quarter earnings fell to $861 mil from $1.1 bil during the same quarter last year. This represents a decline of more than 20%. Despite the drop these numbers were better than analysts had been expecting.

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Mogul of Pineapples
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Postby Mogul of Pineapples » Thu Oct 23, 2008 5:10 pm

Those latest earnings are nothing to sneeze at. I checked it out and the gives them a current p/e of only 8.5. I wish I had some spare money right now because I would love to buy into a quality company like American Express at that cheap of a price.
Disclosure: I am a moderator/paid staff of this site, which does have advertising relationships with some credit cards that are discussed and linked to. Regardless, anything I say is my honest opinion.

Current Cards:
American Express: Blue Cash, Simply Cash Bank of America: WorldPoints Platinum Plus Chase: Amazon, British Airways, Cash Plus Rewards, Freedom, Ink Cash Citi: Thank You Premier, Dividend Platinum Select Discover: More
Primary Everyday Card: American Express Blue Cash
Primary Travel Card: Chase Sapphire Preferred



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