American Express will once again add perks to its popular Platinum cards to avoid losing customers as the pandemic continues to curtail spending on the firm’s cards.
The company will offer as much as $180 in credits for purchases made through PayPal with the $550-a-year consumer Platinum card, and up to $1,700 in credits for virtual personal training with luxury-gym chain Equinox, car rentals with Avis Budget Group, purchases on Home Depot’s website and spending with other retailers.
The new perks follow changes made last year to offer credits for spending on streaming and wireless-phone services. Roughly three-quarters of U.S. Platinum customers took advantage of those benefits, which helped drive attrition levels lower last year.
“That worked really well for us — we saw loyalty remained strong, and attrition levels were even lower than they were pre-COVID,” Rachel Stocks, executive vice president of global premium products and benefits, said in an interview. “So we still want to make sure we’re delivering value for them as they’re spending time at home.”
As part of the changes, customers with the firm’s $595-a-year business Platinum card will also now earn five membership rewards points per dollar spent on wireless, shipping, advertising, gas and office supplies.
“The types of spending that we’re offering rewards for, these are the types of spending that businesses utilize every day to operate their business,” said Courtney Kelso, senior vice president and general manager for U.S. commercial card and global commercial services.
For years, consumers flocked to pricey premium cards offered by Amex and rivals including JPMorgan Chase and Citigroup. For Amex, interest in the cards was so high that net card fees remain the fastest-growing part of revenue.
Now, those same banks have to offer new perks and credits to keep consumers happy for fear they’ll abandon the cards or downgrade to no-fee alternatives. Those extra investments have come as the average return on assets for credit card portfolios have been cut by more than half due to rising losses, according to consultancy R.K. Hammer.
Amex on Tuesday promised to announce in coming weeks new perks for customers of some of its biggest co-brand cards, such as those with Delta Air Lines, Marriott International and Hilton Worldwide Holdings.
Amex has been hit hard by the coronavirus pandemic, given its longtime ties to travel cards. Spending on the firm’s cards was down about 20% in the third quarter, though that was an improvement from the 33% drop in the previous three months.
Before the pandemic, spending on travel and entertainment accounted for more than a quarter of the billed business on Amex’s proprietary cards. In the third quarter, that had shrunk to just 10%.
The company on Tuesday debuted a bevy of new travel perks, such as giving Platinum cardholders the ability to save 20% off the ticket price for certain flights or complimentary nights or credits at some hotels.
“We continue to monitor how our customers are thinking about traveling, and we’re just making sure we’re here when they’re ready,” Stocks said.
