American Express stops “rate tart” offers
American Express (Amex) is no longer offering balance transfers to its new customers as it stops targeting the so called “rate tarts” who switch their balance to find the cheapest rate card.
Amex said it had made a strategic decision to stop offering balance transfers to new personal card customers, and that balance transfers would now only be offered to a ‘select’ profile of current customers.
Robert Kenley, head of credit cards at moneysupermarket.com said: “This is a significant move by Amex. Amex RED and Amex Nectar offered a rate of 5.9% on balance transfers until the balance is repaid in full. This life-of-balance transfer strategy appears to have failed, mainly because Amex has been unable to compete with the bigger players in the market such as MBNA and Capital One who are more willing and able to offer 0% balance transfer rates for long introductory periods.
“As a result, Amex has chosen to revert to its traditional, more successful strategy of focusing on ‘spenders’ rather than ‘borrowers’ and generating revenue from merchant fees.”
“Although this is not the end of balance transfers per se for Amex, it does prove that for some providers recruiting customers by way of an attractive balance transfer rate is not always a viable business proposition.
“For consumers looking to transfer a balance there are still plenty of competitive cards, currently there are fifty 0% balance transfer cards available but the chance of getting this type of deal with Amex is now significantly reduced.”