Reeling from late payments and defaults by customers it aggressively wooed before the U.S. economy tumbled, American Express is returning to its roots as a charge-card issuer to well-heeled Americans,
and is pulling back from an ill-timed expansion of its credit-card business, Robin Sidel reports.
AmEx has issued credit cards since the late 1990s, but that business was fairly small.
Most of those credit cards were co-branded with outside companies such as Delta Air Lines and Costco from whom customers could earn reward points when they use their cards. Many of AmEx's current woes
began with a gradual shift in strategy begun around 2003, when it sought to transform the exclusive brand into a product that could be used more broadly.
From 2003 to 2005, AmEx developed
a new generation of credit cards for younger consumers whom it described as "pre-affluent," including a line aimed at single urban professionals called the "IN" card. Other credit cards were targeted
at newlyweds (the "Nest") and engaged couples (the "Knot").
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