American Express (NYSE:AXP) (Amex) has announced an increase in annual fees on a selection of its credit cards, effective from Wednesday, October 11, 2023. The affected cards include the Platinum Card, Nectar, Marriott Bonvoy, Preferred Reward Gold, Harrods Charge, and Preferred Rewards Gold Business. Fee increases range from £5 to £75. Customers billed between October 11, 2023 and February 28, 2024 will pay the old fee once more before transitioning to the new fee structure. Those billed on or after March 1, 2024 will pay the increased fee.
In particular, the Platinum Card now carries a £650 annual fee for new applicants. To counterbalance these fee hikes, Amex is offering a record 100,000 reward points to new Platinum members who meet a £10,000 spending threshold within the first six months. Current customers will experience these changes from February 29, 2024. Customers who are dissatisfied with these changes can cancel their card for a pro-rata refund.
The company is also enhancing reward points for new sign-ups to the Preferred Rewards Gold Credit Card and Marriott Bonvoy American Express Card. The latter card offers a free night's stay for reaching certain point thresholds. Referral rewards are also available for existing cardholders.
InvestingPro data shows that American Express has a market cap of 110.5B USD and a P/E ratio of 15.24. The company's revenue for the last twelve months (LTM2023.Q2) was 53.01B USD, with a growth rate of 10.52 %. This indicates a strong financial performance, and in line with the InvestingPro Tip Amex has high earnings quality, with free cash flow exceeding net income, and yields a high return on invested capital.
The data also shows that the company has a dividend yield of 1.59 %, which has grown by 15.38 % in the last twelve months. This aligns with the InvestingPro Tip that strong earnings should allow management to continue dividend payments, a streak that the company has maintained for 53 consecutive years.
Several other cards such as the Platinum Cashback Credit Card, British Airways Premium Plus Credit Card, Platinum Cashback Everyday Credit Card, British Airways Credit Card, Basic Credit Card, Business Basic Credit Card, and Rewards Credit Card remain unaffected by these changes.
Competing financial institutions like Chase Bank are offering alternatives such as cards with a 1% cashback in the first year and various cashback apps and deals of the week.
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