Mogul of Pineapples
- Centurion Member
- Posts: 1271
- Joined: Sun Jun 01, 2008 11:32 pm
- Location: Smogland
That still seems like quite a bit to pay. If my numbers are right, Amex's revenue is around 30 billion a year. Figure 10% of that (from the Delta Airlines credit cards) is 3 billion a year. This agreement appears to be costing Amex roughly $2 billion a year. That means they are paying $2 billion for $3 billion in revenue. Then you consider that's only revenue and not earnings, I still don't understand how this deal is a real winner for Amex.
About the Costco agreement, do you know how much that is costing Amex by any chance? I wonder if any of these agreements are "free" as in they just do a profit split on revenue from the cards instead of charging American Express a chunk upfront. That seems like the logical, most fair way they should be done.
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:
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MorePrimary Everyday Card: American Express Blue CashPrimary Travel Card: Chase Sapphire Preferred