Comment by davidu | Hacker News Reader

Comment by davidu | Hacker News Reader

This article focuses on the emotional attachment to a card, but that's not the driver. It just comes out that way. I spend a lot of time on FlyerTalk where the decline of Amex has been discussed over and over. There were mistakes made on the revenue side, and on the rewards side. Three events basically tilted the entire balance away from Amex:

1. Failed negotiation with CostCo and losing the CostCo credit business.

2. The United and Continental merger that signed the death of the United / Amex relationship as all of that credit business moved to Chase and United was removed as a redemption partner, which was the number one membership rewards partner by a long-shot.

3. The loss of JetBlue as a partner that demotivated Amex in the affluent NYC credit theatre.

There were many other mistakes made, but those three had a compounding effect on Amex's negotiating leverage to earn transactions, carry cards, and to offer valuable rewards that drive member sentiment.

That's it. Three moves, each on their own survivable, but in concert essentially destroyed a well-balanced equation.

The question is, how will they catapult out of this?

> The question is, how will they catapult out of this?

They could sign a deal with Amazon to provide a Prime card that gives the cardholder $0 Amazon Prime when they use the card.

EDIT: I'm not suggesting that this is the ONLY benefit, just something comparable to the previous Costco arrangement they had.

$80 / year is a terrible credit card reward compared to almost all other credit cards. It would have to be free Amazon Prime + 5% back on all Amazon purchases + $500 sign up bonus.

True, but I was searching for something comparable to the Costco deal they used to have. That perk was also pretty cheap (Isn't Costco membership in the same ballpark?)

But yeah, throw some extra points/cash back in there as well. I'd go for that in a heartbeat, and so would a lot of the demographic they're currently losing.

If I'm not mistaken, the Costco deal was a free membership and it was the only CC Costco would accept - any other payment had to be via debit card. That bit of arm-twisting was valuable.

Yeah. No way in hell Amazon would agree to a similar setup. I didn’t think about that aspect of it.

Free Costco membership was not one of the perks (and isn't with the Citi Costco card either).

The Chase Amazon card already gives you 5% back at Amazon Prime members with no annual fee. A card offering that plus Prime would almost certainly have an annual fee and the $500 bonus would simply be setting the card issuer up for massive turnover.

That's terrible. I get 2% cash back from Citibank. Easily put that at $1200 per year value to me.

I'm not saying that's the only perk. The parent comment was describing all the relationships Amex lost that combined to hurt their membership base. The Costco one could be replaced with a similar setup through Amazon.

Costco was a walled garden. Amex only. I don't see Amazon.com able to survive a switch like that...

It would have to provide a lot more than that. I get several hundred dollars per year of value from the sign up bonus + recurring rewards on my Chase card, enough that I'm willing to eat the $450/year fee. I essentially fly for free all year because of the points. $99/year in benefits isn't enough to get me to switch.

You fly for $450 a year, to be clear.

Fair enough. Still a good deal for multiple trips with two people.

It's really only $150 a year, because they automatically rebate $300 in travel expenses.

I'd be interested in seeing your math.

They probably can't, it's likely Chase has an exclusivity arrangement on dealings with Amazon alongside issuing the co-branded credit card.

Amex had that with Costco, until they didn't. I don't know when the Chase agreement expires, but when it does, Amex could learn from their previous losses and aggressively steal that business away from Chase.

Amazon already has non Chase cards available: https://www.amazon.com/iss/credit/storecardmember

The Synchrony Bank store card is hands-down the shittiest card product I've ever used from any bank. I signed up for it and they screwed up my ACH multiple times, then closed my account, because they were running auto-debit ACH from a different address than command-debit ACH, and had no one who would explain this. (They bought something formerly used by Walmart, so when I saw a large Walmart debit I blocked it, as I never use my checking account there...)

In Q4 2016 (I think) DiscoverIT was 5% on Amazon purchases, which is equally good, but then the Chase Prime Visa also became 5%, so there's no advantage to the Synchrony card whatsoever.

I'm not suggesting any particular card, just noting that Chase must not have an exclusivity clause.

They already did that for the Everyday Preferred.

If I remember correctly, they did that a few years ago. And I've had Prime ever since, which makes me a schmuck, I guess.

They should be pushing their Blue Cash Preferred Card. For $75 a year, you get 6% cash back on groceries and 3% back on gas. You also get 1% on everything else. Right now it is just my husband and I and we easily get more than $75 in rewards. I can only imagine if you add kids to the mix. 6% is a huge amount of money when talking about groceries. We also use the AmEx to purchase anything that is worth having a warranty for because the AmEx extends the manufacturer's warranty.

The Blue Cash Preferred is at a $95 annual fee right now.

I have the original Blue Cash, that I've refused to trade in because the new versions are no where close. The rules are a little wonky... 1% cash back on groceries, gas, and drug stores until you spend $6500, then 5% back after that. Other purchases are .5% / 1%. All with no annual fee.

The 6% cash back from grocery stores is nice. You can buy Amazon (and many other) gift cards at my grocery store and they all result in 6% back as well.

One thing that bothers me is AMEX says you don't get the cash back if you use a digital wallet. So, does that mean Apple Pay? Why would they add that restriction?

Plus Amex isn't accepted as widely as Visa/MC.

Millennials tend to not want to carry a gaggle of cards.

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