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
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.
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Source: Bloomberg Business
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