More headwinds on the horizon at American Express
After the news of the break with Costco, one could have thought that the bad news was all out. Now something is going on at Amex that could be worse.
As a cardholder, I received my new chip enabled card last week after a delay, as my supposed original mailing did not arrive. As I waited for my card to arrive Amex disabled my existing card, so I did not have an Amex card for a week, bad news for me and vendors who had direct debit through that card. One could certainly question that move by Amex, as it interrupted business continuity. It gets worse. Amex changed the account number on my new chip enabled card. It is no longer the number that merchants have on record.
This means that rejections could be taking place now as I scramble to go on accounts that have websites and change the account number, not always a completely intuitive process. Then there are vendors like our usual car service, restaurants, and who knows what others that have the "former" account number on file and need to be reminded to change it. This is a uniquely clever way for American Express to lose business.
It should be noted that a United Mileage Plus Awards program almost simultaneously sent me a new chip enabled Visa card to replace my existing one, but only when I called in to activate the new card. Additionally, there was no change in the account number. One could wonder what Amex was thinking when they put this program in place.
As a shareholder here and in several managed accounts, even with this knowledge the dilemma is what to do. There are significant taxable gains in the long held Amex positions. Amex will remain a powerful company and has an adequate but not rich dividend and a strong balance sheet for a financial company. It seems that staying put is the correct move, but for new buyers the right approach might be to wait until the impact of current actions are fully realized.
As a cardholder, I received my new chip enabled card last week after a delay, as my supposed original mailing did not arrive. As I waited for my card to arrive Amex disabled my existing card, so I did not have an Amex card for a week, bad news for me and vendors who had direct debit through that card. One could certainly question that move by Amex, as it interrupted business continuity. It gets worse. Amex changed the account number on my new chip enabled card. It is no longer the number that merchants have on record.
This means that rejections could be taking place now as I scramble to go on accounts that have websites and change the account number, not always a completely intuitive process. Then there are vendors like our usual car service, restaurants, and who knows what others that have the "former" account number on file and need to be reminded to change it. This is a uniquely clever way for American Express to lose business.
It should be noted that a United Mileage Plus Awards program almost simultaneously sent me a new chip enabled Visa card to replace my existing one, but only when I called in to activate the new card. Additionally, there was no change in the account number. One could wonder what Amex was thinking when they put this program in place.
As a shareholder here and in several managed accounts, even with this knowledge the dilemma is what to do. There are significant taxable gains in the long held Amex positions. Amex will remain a powerful company and has an adequate but not rich dividend and a strong balance sheet for a financial company. It seems that staying put is the correct move, but for new buyers the right approach might be to wait until the impact of current actions are fully realized.
posted by John Borden at 10:32 AM
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