Amex slips slightly in September
After consistently staying on top and being the star performed of the credit card industry during the credit crisis, American Express has slipped slightly during the month of September. In its filing to the regulator, AXP or American Express Co. has confirmed that the number of delinquencies of 30 days or more which are past the due date has increased to 2.5% in the month of September compared to 2.4 in the previous month.
The third quarter results though were slightly better with 2.5% delinquencies compared to 2.7 in the previous quarter. This comes in contrast to the reports in the past few months, where American Express has registered the lowest number of delinquencies and defaults amongst credit card issuers. The peak rate still remains at 5.3 percent, which was hit in the month of February 2009. The rate of defaults remains an important statistical data given that it indicates future defaults.
The credit card defaults in the country fell to 5.2 percent during the third quarter which is a whole 1% drop from the 6.2% figure during the second quarter. American Express during the month of September has written off 4.7% of its US credit card debt, which is also down from 5.5% in the month of August. This has left the company with a total outstanding amount of 49.2 billion dollars in credit card balances. The company has continued to perform well, although some poor marketing decisions have dearly cost the company with defaults peaking to touch double figures at 10.1 percent in April of this year.
American Express, similar to its competitor, Discover acts as both an issuer of credit cards as well as a network for payment processing thus eliminating the need of a middle man. This company usually caters to the credit card customers with great expenses. It also offers some very attractive reward programs considered to be amongst the best in the industry.
American Express has also been in the news recently for refusing to join the deliberations between the Justice Department and the credit card industry. This was at the same time when Visa and MasterCard on one side had agreed to allow merchants to offer discounts and incentives to customers to use a cheaper method of payment. On the other hand, American Express stands to lose from this because their cards cost the most for merchants to process. The Justice Department has sued the company after its refusal to join the settlement.
