American Express rings in the new year with rewards offerings

• Amex added new credit card rewards for its consumer and small business cardholders.
• This offers a way for the card issuer to encourage spending and offset pandemic declines. 
• Insider Intelligence publishes hundreds of insights, charts, and forecasts on the Payments & Commerce industry with the Payments & Commerce Briefing. You can learn more about subscribing here.

The credit card issuer added consumer, small business, and travel rewards offerings for its cardholders to incentivize spending into the new year.

Insider Intelligence

• Consumer cardholders: From January 5, 2021 until June 30, 2021, Amex is giving qualified US cardholders up to $180 in statement credit for eligible PayPal purchases. Amex is also offering these customers up to $1,700 in statement credit once they enroll in Amex Offers—the company’s rewards program—which can be used at participating retailers including BestBuy.com, HomeDepot.com, and Instacart.
• Small business cardmembers: As part of its Back-to-Business initiative, eligible Amex cardmembers can receive five times the Membership Rewards points on US purchases made across wireless, shipping, advertising, gas, and office supplies categories. These cardmembers can also receive discounts for select business services now through June 30, 2021 after they enroll in Amex Offers.
• Travel offers: For eligible consumer and small business cardmembers, Amex is offering a complimentary night or property credit at participating hotels and resorts, as well as increased discounts for flight bookings. The card issuer also plans to launch limited-time offers for cardmembers in its Marriott Bonvoy, Delta SkyMiles, and Hilton Honors programs in the coming weeks.

Credit card customers have developed more interest in rewards due to the pandemic—and Amex’s new offerings could help it capitalize on that demand. Prior to the pandemic, lack of awareness regarding credit card rewards was high, with 47{b530a9af8ec2f2e0d4045baab79c5cfb9bfdc23e498df4d376766a0b44d3f146} of US cardholders indicating they didn’t know how many points they had, according to a survey by NextAdvisor. However, many consumers are now taking more interest in rewards, driven in part by the financial strain caused by the crisis: 66{b530a9af8ec2f2e0d4045baab79c5cfb9bfdc23e498df4d376766a0b44d3f146} of US consumers see credit card reward balances as a means to buy the things they need, per a June PayPal study.

Expanding rewards offerings could be a way for Amex to induce card spending, especially since most of its new rewards cater to current spending habits, including online shopping rewards and business service offerings. In terms of Amex’s current travel offerings, CFO Jeff Campbell has said that the firm doesn’t plan to move away from travel anytime soon since current consumer spending habits aren’t likely to be permanent.

Amex’s rewards offerings might help kick-start spending in the new year, enabling it to boost its volume. Like most other card issuers, Amex saw a substantial drop in volume at the onset of the pandemic: Proprietary billed business plunged 35{b530a9af8ec2f2e0d4045baab79c5cfb9bfdc23e498df4d376766a0b44d3f146} year over year (YoY) in Q2 2020. The issuer has since seen some recovery: Its proprietary billed business declined 20{b530a9af8ec2f2e0d4045baab79c5cfb9bfdc23e498df4d376766a0b44d3f146} YoY in Q3.

A major part of that recovery was likely driven by Amex’s tweaked rewards offerings, which included perks for streaming, wireless, and food delivery services. In light of the coronavirus vaccine distribution as well as the second round of stimulus payments currently rolling out, Amex may be aiming to continue incentivizing spending on its cards with its new rewards offerings. In doing so, it could offset pandemic declines and regain some of its lost volume from Q2 and Q3 2020.

Want to read more stories like this one? Here’s how you can gain access:

1. Join other Insider Intelligence clients who receive this Briefing, along with other Payments & Commerce forecasts, briefings, charts, and research reports to their inboxes each day. >> Become a Client
2. Explore related topics more in depth. >> Browse Our Coverage

Current subscribers can access the entire Insider Intelligence content archive here.