AmEx Debuts No-Fee Credit Card with Premium-Style Rewards

American Express Co. Debuts No-Fee Card With Premium-Style Rewards
Scott Eells/Bloomberg via Getty Images
By Elizabeth Dexheimer

American Express (AXP) is seeking to broaden its customer base by offering its first no-fee credit product that grants holders access to all of the lender's rewards programs.

The "EveryDay" card is AmEx's biggest debut in terms of the amount of money spent on development and marketing since AmEx launched its "Blue" brand in 2000, according to Ed Gilligan, president of AmEx. The card issuer, already the biggest by purchases, is seeking new kinds of customers including U.S. mothers by offering incentives such as extra points for shopping at supermarkets, Gilligan said.

"This segment didn't think AmEx had a product that fit their needs," Gilligan said in an interview at the firm's New York headquarters.

AmEx, whose business was built on charge cards that didn't allow consumers to carry a balance, is seeking ways to increase loans and net interest income, which Gilligan has said comprise a smaller part of revenue than for competitors. Loans are increasing at AmEx slightly faster than the rest of the industry and they're regarded as an important source of future revenue growth, he told analysts last month.

Unlike with AmEx's charge cards, EveryDay customers will have a spending limit and won't be required to pay their balance in full each month, according to AmEx.
They also won't get extra perks such as earning triple rewards for travel and dining or access to entertainment events that are available to some customers who pay an annual fee on other types of cards.

Terms call for the new card to carry a zero-percent interest rate for the first 15 months and 12.99 percent to 21.99 percent afterward, according to the company. Customers will have access to the full rewards program, which includes perks like transferring travel points that aren't available on other AmEx products that don't have an annual fee such as Blue, the firm said.

The new card comes with EMV anti-fraud technology -- named for founders EuroPay International, MasterCard (MA) and Visa (V) -- that's designed to provide better security than cards with magnetic strips.

To promote the card, which will be available by April 2, AmEx planned television advertisements featuring Tina Fey to run during the Academy Awards and photographs by Annie Leibovitz that will appear in print publications.

To contact the reporter on this story: Elizabeth Dexheimer in New York at edexheimer@bloomberg.net
To contact the editor responsible for this story: Peter Eichenbaum at peichenbaum@bloomberg.net



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betty_brock

I've had a no fee card from American Express for 15 years.

March 03 2014 at 4:33 PM Report abuse +1 rate up rate down Reply
1 reply to betty_brock's comment
betty_brock

From Dillards.

March 03 2014 at 5:35 PM Report abuse rate up rate down Reply
tpgowen

I am paying $100.00 year for my Am Ex card. I have never been late, do carry a balance, unfortunately. Even though I pay significant amount more than my minimum payment, they won't cut you a break for anything. I have requested to have my interest rate lowered because I feel with my history they could be willing to do a little something, but they will not do it. In order to get my companion miles, I have to call and request it and I am not even sure they still provide that. They no longer double miles for gas, groceries or home stores and soon will no longer flyer miles for Delta travel. Desperately attempting to get this card paid off ASAP, use my flyer miles and drop them like a hot potato.

March 03 2014 at 3:26 PM Report abuse rate up rate down Reply
1 reply to tpgowen's comment
Tom Wilson

If you want to carry a balance, go to the bank and get a loan, at considerably less SIMPLE interest. Either you learn to manage credit or it will manage you !

March 03 2014 at 10:40 PM Report abuse rate up rate down Reply
classof68gto

Back in the 90's I had an American Express card and I paid a fee. I only had it for one year. It was amazing how much junk mail I got from them in that year. Several pieces a week. I thought to myself they could lower the fees with just cutting down on the junk mail. Not only that many establishments do not accept American Express because of how much it costs the business to accept it. Free or not I would never have an American Express card again.

March 03 2014 at 11:49 AM Report abuse +1 rate up rate down Reply
irnmk50

Better than the AAA/AmEx debit card. I get the AAA card only.

March 03 2014 at 8:46 AM Report abuse rate up rate down Reply