American Express Co. has launched its first new charge card since 1984, when the upscale Platinum card debuted.
The new product, called Rewards Plus Gold Card, initially will be offered to existing American Express cardholders. It is designed to attract frequent business travelers.
"It is a niche product," said Kenneth I. Chenault, president of American Express Travel Related Services at a press conference on Monday. "We don't anticipate that this will bring in large numbers of external customers."
Mr. Chenault expects about 250,000 customers to sign up.
The name of the new product belies the fact that it offers the same benefits as the regular gold card along with some new features.
Rewards Plus arrives on the heels of another new American Express product, the True Grace credit card, which is being widely marketed and advertised to the general public.
The two products, the first in a series of new offerings, are designed to attract entirely different consumers. The True Grace card, with its extended grace period is appealing to a much larger consumer base than the exclusive Rewards Plus Gold Card, which carries a hefty $125 annual fee.
The affiuent consumer is very much alive, Mr. Chenault insisted, citing the success of the Platinum card, which carries a $300 annual fee and is enjoying its second banner year in terms of new customers and spending.
Frank Skillern, president of the U.S. consumer card group, added that Rewards Plus is also designed to stem gold card attrition from customers who question whether gold card benefits are worth the $75 annual fee.
"Our research shows that many card members see the Rewards Plus Gold Card filling part of the gap between the regular American Express gold card and the Platinum card," said Mr. Chenault.
The unique feature of Rewards Plus is a new service that tracks customers' points from multiple frequent-traveler programs, including programs outside of the American Express family of products.
The service called, Mileage-Manager, provides cardholders with a monthly consolidated statement that reports on the customer's cumulative earnings to date.
American Express claims to be the first company to offer such a service, for which only Reo wards Plus customers qualify.
Other benefits of the product, include free enrollment in Membership Miles, a program that is available to all American Express customers for $25; $250,000 in travel accident insurance, which is $150,000 more than the coverage provided on its regular gold card; free additional cards; and double program miles throughout the first year with Membership Miles airline and hotel partners.
The last may prove to be particularly attractive to consumers who are facing higher point and spending thresholds on other frequent-flier programs.
Six airlines and their affiliates and five major hotel chains participate in Membership Miles.
Credit card consultant K. Shelly Porges, of Porges/Hudson Marketing Inc., San Francisco, pointed out how Mileage-Manager provides a way for American Express to leverage its highly touted yearend statements that detail customer spending.
Over the next 12 to 24 months, American Express will continue to launch new charge and credit cards, and the Rewards Plus Gold Card provides a glimpse of the other charge cards on the drawing board.
The American Express customer base will likely be the target of any new charge card offerings, because charge card profits are "driven by the fee and spending," said Mr. Skillern.
Traditionally, American Express earns about two-thirds of its income from the merchant discount rate it charges and one-third from consumer fees, said Ms. Porges.
However, with the company's new push into the world of credit cards, that ratio will change.