Consumer Payment Card News

NEW AMERICAN EXPRESS CANADIAN CARDS

SUMMARY:
American Express is adding more competitive fire to the already aggressive Canadian market by introducing three new credit card products. The American Express Credit Card with Cash Back offers up to a 1% cash rebate based on purchases. The American Express Gold Credit Card with Cash Back offering up to a 2% cash rebate based on purchases. And the American Express Gold Credit Card offering a 6.9% intro rate and 12.95% long-term purchase rate. AmEx said it will unleash its largest-ever direct mail campaign in Canada to promote the new products.

FULL STORY:

Amex Bank of Canada is aggressively staking out a significantly larger piece of the $60 billion plus credit card market with the introduction of three new credit cards featuring an array of value-based options such as low rates and cash rebates.

The new cards will be introduced to Canadian consumers through the largest-ever direct mail campaign by American Express in Canada, and supported by the “Right for the Times’ television advertising.

American Express introduced its first-ever, stand-alone credit card in Canada in April 1996 to phenomenal consumer response. Newly issued credit cards are 75 per cent above target, driven by high recognition of the brand, and consumer desire for financial flexibility including an interest rate structure that rewards responsible credit management.

“The success of our entry into the credit card arena proves that the opportunity is there for us to win in this market,” explains Alan Stark, President and General Manager of American Express. “People have showed they will move to the American Express brand when they are made a compelling offer.” He added, “We are launching more new products this year than we have in the past decade – and there will be more to come. We’re ready to compete head-on, and aim to double the number of American Express cards in circulation by the year 2000.”

AMERICAN EXPRESS PORTFOLIO

Joining the growing American Express(R) portfolio are: American Express Credit Card with Cash Back; American Express Gold Credit Card with Cash Back; and American Express Gold Credit Card.

The new cards are designed for responsible credit customers to choose the fee, payment terms and benefits that best suit their needs.

“Our studies clearly reflect that one card can not service all consumers,” says Greg Harris, Director of Consumer Product Development. “We know customers want more choice and more value, and that’s what we’re committed to giving them.”

Each card offers a low six-month introductory rate on purchases; the opportunity to transfer the balance from existing cards; free supplementary cards; worldwide ABM cash access; 24-hour customer service; and Front of The Line(R) preferential access to prominent, national theatre productions, concerts, events, and exhibitions.

American Express Credit Card with Cash Back

This credit card is designed for those who want to extend payments over time using a Card that has no annual fee, and delivers an annual rebate of up to 1 per cent on virtually all spending.

Every January, eligible customers will receive a rebate credited to their credit card statement. Rebates are calculated as 0.25 per cent for the first $1,500; 0.50 per cent for the next $1,500 and 1.00 per cent for amounts over $3,000.

Gold Credit Card with Cash Back

This card offers the highest cash rebate in the marketplace with up to 2 per cent annually on virtually all purchases. The rebate calculation is 0.50 per cent for the first $2,500; 1.00 per cent for the next $2,500; and 2.00 per cent for amounts over $5,000. This card also offers enhanced benefits including Buyer’s Assurance(R) and Purchase Protection(R).

For example, an eligible Cardmember with annual spending of $7,500 will be credited with a rebate of $87.50; on annual spending of $10,000, a rebate of $137.50.

Gold Credit Card

This card provides consumers with the opportunity for greater financial flexibility with a low annual fee of $50.00, a tiered interest rate structure (the introductory interest rate is the lowest in the marketplace at 6.9 per cent on purchases), and added benefits such as Buyer’s Assurance and Purchase Protection.

With this card, customers who make their minimum monthly payments on time, will receive the Preferred Customer Interest Rate of 12.95 per cent on all purchases. The standard interest rate of 17.95 per cent applies to cash advances.

DEVELOPING INNOVATIVE PRODUCTS

“We’ve conducted extensive research with consumers through every stage of developing these products,” says Harris. “We’re now introducing new products that will attract, and meet the needs of a broader segment of consumers.”

Canadians are clearly signalling their approval and interest in more credit card options. The Canadian Bankers Association reported record credit card sales of $61.3 billion for the 1995 fiscal year. And, American Express Canada forecasts its own double digit growth in the number of cards and billings in 1996.

Over 37.8 million American Express Cards are held worldwide, issued in 34 currencies, and accepted at 3.9 million Service Establishments in over 160 countries.

AMERICAN EXPRESS FAMILY OF CREDIT CARDS ADDITIONAL PRODUCT BENEFITS
PURCHASE PROTECTION(R)

Most purchases are insured automatically against accidental physical damage and most theft, up to $1,000 per occurrence (not per purchased item) for 90 days from date of purchase using a Gold Credit Card. Cardmembers are reimbursed for insured occurrences not covered by any other insurance.

BUYER’S ASSURANCE PROTECTION PLAN(R)

This plan doubles the free repair period offered under the manufacturer’s original warranty, for up to one additional year, on any Gold Credit Card purchase within Canada and the U.S.

BALANCE TRANSFER

Cardmembers can transfer $500 minimum balances owing on other financial institution/retail credit or charge cards to their NEW Card. Balances from existing American Express Cards can be transferred to any of the new products on request. This feature is offered at point of acquisition only, and within the first 60 days of Cardmembership.

FRONT OF THE LINE(R)

Front Of The Line provides Cardmembers with preferential access to some of Canada’s most highly sought-after live theatre productions, concerts, sporting events and art exhibitions.

For many events, Front Of The Line provides exclusive access to tickets before they go on sale to the general public. For other Front Of The Line events, great seats are reserved for selected performances exclusively for Cardmembers’ ongoing access.

AUTOMATIC $100,000 TRAVEL ACCIDENT INSURANCE

Cardmembers are automatically covered for up to $100,000 of accidental death and dismemberment insurance at no extra charge if travelling by plane, train, ship or bus, and charging the tickets to an American Express Credit Card.

INTERAC CASH ACCESS

Cardmembers receive a Personal Identification Number (PIN) allowing them to use their Credit Card at any 17,000 plus automated banking machines in the Interac network across Canada.

Cardmembers can also access American Express Travellers Cheques and cash from a network of American Express automated dispensers and participating financial institutions around the world.

The American Express family of Credit Cards allows consumers to choose from a variety of competitively superior products – each of which combines value-based product features, personally relevant service and recognition, designed for day-to-day needs.

 NEW!
    Product Features           American Express       American Express
                                  Credit Card            Credit Card
                                                       With Cash Back
    ---------------------------------------------------------------------
    Annual Fee                     No Fee                 No Fee
    ---------------------------------------------------------------------
    Credit Limit             Personalized Credit    Personalized Credit
                                  Limit from            Limit from
                              $1,000 to $10,000      $1,000 to $10,000
    ---------------------------------------------------------------------
    Six-Month Introductory
    Interest Rate on Purchases            9.9%                    9.9%
    ---------------------------------------------------------------------
    Preferred Customer
    Interest Rate on Purchases          13.95%                    N/A
    ---------------------------------------------------------------------
    Competitive Interest Rate             N/A                   17.95%
    ---------------------------------------------------------------------
    Standard Interest Rate              17.95%                  19.95%
    ---------------------------------------------------------------------
    Annual Rebate                         N/A                 Up to 1%
    ---------------------------------------------------------------------
    Interac Cash Access                    x                        x
    ---------------------------------------------------------------------
    Free Supplementary Cards               x                        x
    ---------------------------------------------------------------------
    Front Of The Line                      x                        x
    ---------------------------------------------------------------------
    $100,000 Travel
    Accident Insurance                     x                        x
    ---------------------------------------------------------------------
    Purchase Protection
    ---------------------------------------------------------------------
    Buyers Assurance
    ---------------------------------------------------------------------
    Balance Transfer                       x                        x
    ---------------------------------------------------------------------

    ---------------------------------------------------------------------
                                     NEW!                   NEW!
    Product Features           American Express       American Express
                               Gold Credit Card       Gold Credit Card
                                                       With Cash Back
    ---------------------------------------------------------------------
    Annual Fee                     $50                     $75
    ---------------------------------------------------------------------
    Credit Limit             Personalized Credit    Personalized Credit
                                  Limit from            Limit from
                              $5,000 to $10,000      $5,000 to $10,000
    ---------------------------------------------------------------------
    Six-Month Introductory
    Interest Rate on Purchases            6.9%                    9.9%
    ---------------------------------------------------------------------
    Preferred Customer
    Interest Rate on Purchases          12.95%                    N/A
    ---------------------------------------------------------------------
    Competitive Interest Rate             N/A                   17.95%
    ---------------------------------------------------------------------
    Standard Interest Rate              17.95%                  19.95%
    ---------------------------------------------------------------------
    Annual Rebate                         N/A                 Up to 2%
    ---------------------------------------------------------------------
    Interac Cash Access                    x                        x
    ---------------------------------------------------------------------
    Free Supplementary Cards               x                        x
    ---------------------------------------------------------------------
    Front Of The Line                      x                        x
    ---------------------------------------------------------------------
    $100,000 Travel
    Accident Insurance                     x                        x
    ---------------------------------------------------------------------
    Purchase Protection                    x                        x
    ---------------------------------------------------------------------
    Buyers Assurance                       x                        x
    ---------------------------------------------------------------------
    Balance Transfer                       x                        x
    ---------------------------------------------------------------------

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