There has all the time been something elitist about pulling out an American Express card. For one thing, they often include an annual fee that may seem too high for a lot of Americans – and for one more, they’ve long been related to travel advantages that only make sense for the rich. And due to transaction fees, Amex was not all the time accepted in every single place. This consumer profile was especially popular with baby boomers and older generations.
But now Generation Z is clamoring for the shiny gold plastic. In fact, this generation, together with Millennials, will account for 75% of latest consumer platinum and gold accounts in 2023, says Howard Grosfield, president of U.S. consumer services at American Express Assets.
“Amex is becoming the card for a whole new generation,” says Grosfield. “Our premium products and membership model resonate with young customers with high credit scores and high spenders. That means we’re building a long-term relationship with them and growing with them into their highest-spending years.”
It could seem surprising that younger generations, faced with high inflation, student loans and high housing costs, would select a card that they should pay for. (A platinum Amex card has a Annual fee of 695 USD). But Millennials and Generation Z are literally willing to shell out for a card that gives “lifestyle” perks beyond travel points. The platinum card includes entertainment credits for subscriptions to platforms like Hulu and The New York Timesin addition to Uber money, airport lounge access, and even credits for shopping at Saks. According to Amex, a platinum card offers $1,500 in value per yr relative to its annual fee.
“Until about 10 to 15 years ago, we thought that no-fee cards were the entry point to attract younger customers to the franchise,” says Grosfield. “We learned that’s not the right strategy for millennials and Gen Z. They like brand affiliation. They like to travel and eat out, and they like the special access and experiences that our premium cards bring.”
It also helps that more merchants accept Amex than before, which helps the cardboard lose its occasional status as being picky or elitist. While Amex has long offered more generous perks than other cards, the downside implies that its relatively high price for merchants means it shouldn’t be accepted in every single place. Rival Visa has had great success trolling Amex with its 20-year-old “It’s Everywhere You Want to Be” promoting campaign.
However, that has now modified, because the variety of locations worldwide that accept American Express cards has greater than tripled since 2017, in keeping with an organization spokesperson. Assets“Nearly 18 million stores and merchants accept Amex here in the U.S. because we maintain 99 percent parity with other credit card networks,” says Amex Assets.
The fee dispute shouldn’t be over yet, nonetheless, as one major e-commerce company will stop accepting Amex cards this summer: eBay. The e-commerce platform will stop accepting Amex payments in August, citing “unacceptably high fees.” (An Amex spokesperson says they’re “disappointed” by the choice, which “will limit customers’ payment options.” He adds: “Our research has shown that the price of accepting American Express within the US is comparable to what eBay pays for similar cards on other networks.)
Not everyone has an Amex
While American Express has undoubtedly seen a wave of latest, young customers, that does not imply they’re shying away from their high-income or high-quality clientele. Amex customers still have “super-top-notch FICOs and credit quality that exceeds their industry peers,” Grosfield says. Plus, the typical income of U.S. Millennial and Gen Z customers is about 70% higher than the typical income of such customers across the industry, an American Express spokesperson says Assets.
Their average customer ages 18 to 24 has a credit rating of 679, while the typical credit rating for those ages 25 to 40 is 686. American Express. Looking at your entire bank card industry, Generation Z has a mean credit rating of 665, in keeping with VantageScore CreditGauge.
It’s also necessary to acknowledge that the cardboard’s annual fee is not reasonably priced for everybody, and that fees on competing cards may fluctuate as these travel and lifestyle cards develop into much more popular. Still, Generation Z is interested in an opulent lifestyle – even when they cannot afford it.
Amex “traditionally symbolized stability and was intended for the older, wealthy group,” says
Gloria Garcia Cisneros, a Gen Z wealth manager at LourdMurray. Gen Z’s interest in the cardboard “is more due to AmEx’s changing value proposition. They’re presenting themselves in a new light and Gen Z doesn’t want to miss out on the latest and hottest trends.”
Generation Z also loves a “good life hack”
While Amex has long been popular with the affluent, who collect travel points like no other, Generation Z enjoys the cardboard’s advantages beyond flight and hotel points. With a more diverse range of advantages, Generation Z sees the cardboard as a option to get probably the most for his or her money.
Generation Z “loves a good life hack,” says Gabriela Serpa Royo, senior culture analyst at consumer insights agency Canvas8 AssetsFor them, “the perks of a credit card are even better than a loan because the brain counts them as free money.”
In fact, Gen Z is more occupied with Amex’s advantages — including travel, dining and special events — than older generations, Grosfield says. Amex users even have access to online training on budgeting, saving, retirement planning, home ownership and constructing good credit. All of those aspects give hope for “a long period of growth for millennial and Gen Z customers,” Grosfield says.
The bottom line, though, is that Gen Z is all the time searching for a bargain. In fact, the “growing preference for credit card perks is not unlike the explosion we’ve seen recently, nor is it separate from the rise of ‘buy now, pay later’ products,” Royo says.
“People look for bargains because they feel like they need more, want more – and also want to appear to have more – even though they have less or feel like they have less,” says Royo.
