AmEx Sees Red as Cardholders Struggle

Credit card company is seeing more cards fall delinquent as economy worsens
By Jim O'Neill,  Newser User
Posted Oct 20, 2008 7:58 AM CDT
An American Express card welcome sign is seen above all others at McGerks Pub & Grill in this Jan. 22, 2007 file photo in Baltimore.   (AP Photo/Chris Gardner, file)
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(Newser) – American Express—expected today to report earnings skidded more than 30% from the third quarter a year ago—isn't quite the industry gem it once was, reports the Wall Street Journal. The company, long a top performer who catered to affluent customers, has seen a surge in delinquencies as the economy has gone from bad to worse. It's a problem not unlike those faced by card issuers JP Morgan and Capital One, but one exacerbated by AmEx's position as a stand-alone card company.

AmEx says its delinquent loans grew to 4.1% from 2.5% a year ago, which, while better than the industry average, is sending a ripple of worry though investors. The company has begun profiling customers and, in many cases, imposing monthly spending limits. It has also cut back on its rewards programs, canceling less-popular perks.