American Express Hikes Rates for 1 Million Credit Cardholders

Alexandra Leslie • June 26, 2015

American Express is raising annual rates for more than 1 million credit cardholders, according to a report from Bloomberg Business’s Elizabeth Dexheimer.

These impacted clients received letters from the company explaining that they are currently being charged less than members with similar credit reports at competing companies.

Existing customers will see their annual rates rise about 2.5 percent on average. Likewise, new American Express members will now pay at least 12.99 percent annually.

Elizabeth Crosta, a company spokeswoman for American Express, said rate increases would vary depending on members’ current APR, adding that some had rates as low as 3.25 percent — well below the industry average last week of 15.76 percent, according to Bankrate.

Tough times for American Express

Costco and JetBlue both announced recently they would be ending their exclusive partnerships with American Express.

Earlier this month, the company also announced the upcoming termination of some of its largest retail partners: Costco and JetBlue. The company has already lost partnering with Costco in Canada, and this co-branding partnership agreement is set to expire in March of 2016. These recent developments have already resulted in AmEx stock plunging nearly 13 percent to date.

American Express also recently announced its plan for a restructuring process. The reorganization will cut more than 4,000 employees as the company seeks to cut expenses. American Express will further explain its strategy moving forward at an upcoming investors event, said Chief Executive Officer Kenneth Chenault.

Thinking about ditching your AmEx for a new card? Check out our favorites here.

Source: Bloomberg Business

Photo Sources: www.bloomberg.com

Editorial Note: Opinions expressed here are the author's alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities.

About the Author

Alexandra Leslie

Since receiving Bachelor's degrees in Political Science and Psychology, Alexandra enjoys studying socioeconomic factors in business, behavior and politics. When she isn't gathering intel on the latest trends and experts in business and finance, you can find her at the gym, searching for gluten-free goodies on Pinterest or enjoying a night out with friends.