Word: cards
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Dates: during 1990-1999
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...longer. While poor profits have chased AT&T and others from their plastic perches, American Express is soaring. Shoppers today are gladly flashing Amex cards for everything from gasoline to groceries to trips to China. The card was so hot in 1997 that American Express reversed a decade-long slide in its share of the U.S. card market. With a slew of new consumer cards to go with its traditional strength in corporate plastic, American Express raised its share of the $469 billion general purpose card volume in the first half of 1997 from 18.3% to 18.9%--as Visa...
...everyone has been wowed by the company's turnaround. Carl Pascarella, CEO of Visa U.S.A., scoffs at American Express as little more than a small-fry compared with his company. That's because Visa puts its brand on nearly 600 million cards that are accepted by more than 14 million merchants around the world, vs. 42.3 million cards and more than 5 million merchants for American Express. "They haven't changed much," Pascarella says of his rival. "Over the past eight or nine years, consumers have been pulling out their Visa card significantly more often than their American Express card...
...part Amex vows that the wars have just begun. "We are by no means uncorking the champagne bottle," says Chenault, 46, Golub's heir apparent and the architect of the company's comeback in cards. "But we are very much in the game, which is a very different situation from three or four years ago." Chenault still winces at the memory of a focus group back then, when the holder of a rival card that earned free airline miles declared, "I want to go with you guys, but you guys are so stupid that you're not offering this product...
Many are offshoots of Optima, the company's first credit card. (The venerable green and gold cards are not credit cards that can carry over a balance but charge cards that require payment-in-full each month.) Want to earn discounts on golf lessons or a new set of clubs, for example? The American Express Golf Card, an Optima card issued with Callaway Golf, was designed for that. Or how about dollars off hotel rooms or a chance to rack up frequent-flyer miles? Among other programs, American Express offers Hilton Optima and Delta AirLines Skymiles cards...
Golub's most ambitious plan so far remains only a gleam in his eye. He wants to transform the credit-card business by plugging U.S. banks into the American Express network and thereby enabling the lenders to issue Amex credit cards. That's the last thing Visa and MasterCard want to see happen, and they've stymied Golub with bylaws that prevent their U.S. bank partners from offering other cards. Golub may get some help from the Justice Department, which is reportedly investigating the competitive behavior of the two big credit-card associations...