otter wrote:Growing up, my perception was always Carte Blanche> Diners Club>Amex>MC/V at least in terms of prestige. In the late 70's/early 80's, credit cards were pretty much useless (no rewards/First Premier-like APR's)- so charge cards were the real market. As inflation and interest rates dropped, credit cards experienced a huge boom and charge cards became passÃ©. Diners Club chose to continue issuing only charge cards while American Express, after some soul searching, started issuing their first revolver the Optima. Would Amex have suffered the same fate as DC/CB if they had stuck to revolvers only? I don't think so because Amex has always been much more than just cards- at the time traveler's checks were Amex's cash cow.
That's how I remember it.
I also remember when my dad got an Amex Gold. He traveled a lot for the government and liked the perks and the prestige of it. There was a time when people would look at a Gold Amex and think, "Oh, he's doing well."
It wasn't many years after that where it became fairly easy to get an Amex Gold and then shortly thereafter you had Gold MasterCards and Gold Visas. I got a Gold Amex shortly out of college, maybe around 1989 or so, so it wasn't based on "well off".
I eventually got a Platinum Card around 1990 and I thought it was cool for the prestige value. The problem was that most people didn't even know there was a Platinum Card at the time and I got a few, "...an Amex Silver Card... One day you'll be able to get the Gold Card!" (I kid you not).
A few years later I dropped the Platinum and got a Diners Club Card. I liked it for travel related things (airlines, rental cars, hotels, restaurants) and occasional shopping but that was about it. I did like having it for the uniqueness of it being the first charge card. I thought that was cool.
otter wrote:So the problem Diners Club might face now is being seen as your father's (or perhaps your grandfather's) card. No company wants to be "Morrison/Piccadilly Cafeteria"- the company where 90% of your customer base has one foot in the grave. Few brands survive that stigma... Cadillac and Old Spice have managed to survive. Camel Cigarettes managed to become the hip brand among young smokers today after being an "old man's brand" in the 70's and 80's (especially bad when you're a cigarette company and your most loyal customers are dropping like flies). Of course, that transformation was due to Joe Camel, and was probably immoral, unethical, and possibly illegal. So it's possible to make a moribund brand thrive again but it takes great effort. I think BMO Harris might try some unique things to make Diners Club more attractive which is one of the reasons I applied. It's interesting to note that Discover could have probably bought the North America rights to Diners, but chose not to.
I think they've pretty well ruined the brand between partnering with MasterCard, not expanding their own network, and not actively increasing their base. It's been decades in the making. Even back when I had a DC I didn't know anyone else who had one. I actually can't name anyone I've ever known that had a DC. In 25 years I should have see someone else pull out a Diners, even if I didn't know the person (like seeing someone pull it out in front of you as you stand in line to check into a hotel). Nope. I did get a few, "Oh, Diners... I've never seen one of these before.."
They also helped kill / not expand their clientele by having years where no one could apply for one in the USA while the brand and the card sat sort of dormant as they decided what to do with it.
So, while it's a neat brand in a historic sense, it's more of a foot-note in history right now. Getting a Diners Club Card now is like getting a MasterCard with the picture of your favorite athlete on it. "Oh, look, it's a Michael Jordan MasterCard!"
otter wrote:That's an interesting question... I actually knew someone who worked at Amex when they introduced the Optima for the first time. According to him there was an internal argument @ Amex before the introduction about whether they should have the Optima on the Amex network or release the Optima with a Visa logo. The conventional wisdom at the time said the card wouldn't be a travel card, so why issue a card on the Amex network (which was almost all travel/restaurant merchants) when they could make more money issuing it as a Visa? Of course, in retrospect, we can all see that would have been a huge, huge mistake.
I actually thought at the time that they were thinking about allowing banks to issue American Express cards that it sort of sullied their name. I remember thinking when this was being floated about that it sounded like it was going down the path of an American Express Visa. That always seemed dumb to me.
In hindsight, I think they were right to co-brand with banks. The only reason I can think of to pay to have a charge card these days is maybe for travel (like a Platinum to get the perks at the airports and such). Outside of that, just get a no-fee Amex from your bank.
I know that there are buyer-protection deals with Amex and, in all those years I had Amex, it only came up once and it was a lot of paper work and, in the end, not worth it to bother with. In the commercials they'd show you buying something and then make it sound like, "OH, with purchase protection you're covered," someone would snap their fingers and the broken thing would go away and the new thing would magically appear. That's not real life.