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In an effort to attract customers, American Express Co. AXP has launched a new credit card named, American Express Cash Magnet Card.
The card’s special features like unlimited 1.5% cash back on small to big purchases, absence of an annual fee, Pay It Plan It payment mode make the card quite attractive to the company’s customers.
Moreover, the card’s Plan It feature system provides customers with flexibility to pay up for purchases by splitting big buys over a span of time with a fixed monthly fee but no interest. The Pay It feature allows card holders to clear smaller purchase amounts as soon as they appear on their bill, lowering their payment burden in the process.
Other benefits on the card include a complimentary ShopRunner membership and Amex Offers rewarding Card Members at places they like to shop, travel and dine.
This effort by American Express reflects its strategy to lure new customers and retain the existing base in the persistently highly competitive credit card industry. We expect this new card to add to the company’s total cards in force, which was 12.8 million in 2017, up 3% year over year.
In the U.S. credit card market, share of American Express trail behind JP Morgan Chase &Co. JPM and Citigroup Inc. C stocks.
In recent years, the company added some striking features to its cards to gain a greater market share in the credit card market after it suffered business decline due to loss of one of its biggest clients, Costco, to its rival player, Visa Inc. V. Hence, the company’s spending on Card Member engagement (the aggregate of rewards, Card Member services plus marketing and promotion expenses) increased year over year in 2017, widely highlighting its recent enhancements to rewards on U.S. Platinum products besides its consistent sturdy growth in its Delta cobrand portfolio and higher levels of engagement across many of its premium services.
In a year’s time, the stock has rallied 20.3%, easily surpassing the industry’s growth of 5.5%.
American Express carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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