NEW YORK—The rush to add cardholders during the pandemic, including dangling rewards to sweeten the offers, has created some challenges for issuers and cardholders alike, according to a new report.
Nasdaq noted that during the pandemic, the number of proprietary AmEx cards grew from 54.7 million at the onset of the pandemic to more than 79.3 million in Q2 2023.
“Many of these new cardholders were enticed by attractive sign-up bonuses. At one point, the AmEx Platinum boasted a 150,000 Membership Reward Point offer (worth at least $1,500),” Nasdaq said.
Nasdaq pointed out that AmEx wasn’t alone in its ambitions to acquire new customers.
‘More Congestion’
“All of these new cardholders meant more congestion at airport lounges when travel inevitably resumed,” Nasdaq stated. “And as the economy recovered and interest rates began to rise, the outsized acquisition spend at creditors began to taper, and too much of a good thing became a real problem.”
Throughout 2022 and 2023, card issuers have made a concerted effort to rein in some of the most valuable benefits of their premium cards, Nasdaq said.
Some of the biggest of such “problems” are being felt by American Express on its Delta Airlines-affiliated cards, which has led the airline to announce a number of changes and restricted benefits to its program, and then to reverse course or alter those plans following strong pushback from cardholders.
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