Business
AmEx Troubles: Some Cardholders Can Leave Home Without It

In this Jan. 20, 2010 file photo, American Express cards are posed for a photograph in Phoenix. Amex’s stock is down 11 percent this year, making it the second-biggest decliner on the Dow Jones industrial average. (AP Photo/Ross D. Franklin, File)
KEN SWEET, AP Business Writer
NEW YORK (AP) — For decades, American Express was the undisputed credit card of choice among corporate road warriors, the wealthy and the well-traveled, who lived by the company’s slogan, “Don’t leave home without it.”
But changing consumer habits, extremely aggressive competition and increased pushback from its merchants are putting heavy pressure on AmEx.
Rivals are trying to steal away business and are succeeding in some cases. Costco, for example, is ending its 15-year relationship with AmEx and defecting to Citigroup and Visa starting next March. And airlines that used to give VIP lounge access to AmEx cardholders have been switching in recent years to other credit card companies.
Compounding its troubles, AmEx recently lost a major government antitrust lawsuit, a verdict that could damage its ability to compete.
“The competitive environment for AmEx is very challenging,” said Jason Arnold, a Wall Street analyst who covers AmEx for RBS Securities. “Major competitors have all directed their efforts to take chunks away from their business. They’ve got serious problems.”
As a result, American Express stock is down 12 percent this year. Analysts, on average, have cut their 2015 profit forecast from $6.2 billion to $5.6 billion. AmEx recently announced 4,000 layoffs, or about 6 percent of its workforce. And CEO Kenneth Chenault will face a skeptical Wall Street audience Wednesday at the company’s annual investor day.
One of the biggest threats to AmEx is the slew of competing cards aimed at the well-to-do, sometimes with lower annual fees. Card issuers have energetically courted merchants who used to accept only American Express. Merchants who once coveted AmEx’s high-net-worth cardholders are discovering they can find the same customers elsewhere.
Citigroup, in particular, has been going after AmEx’s core customer. Citigroup has hired executives away from AmEx over the past few years to help it overhaul its credit cards and revamp its loyalty program, known as ThankYou. Citi Cards CEO Jud Linville, for example, worked at AmEx for nearly 20 years.
The capture of Costco by Citigroup and Visa was the biggest blow to AmEx. The warehouse-club chain accounted for $80 billion of spending on AmEx’s network last year and 10 percent of AmEx’s cards.
“Costco was a real punch in the gut,” said David Robertson, publisher of the Nilson Report, a major trade journal for the credit card industry.
Citi also recently created a card called Citi Prestige, a high-annual-fee card aimed at AmEx Platinum Card holders.
“Citi’s ThankYou program, a year and a half ago, was pretty much worthless,” said Brian Kelly, editor in chief of thepointsguy.com, a travel and credit card rewards tracking website. “But over the past year Citi has really started to get into the game. They are not at a Chase or AmEx level yet, but based on where they have gone in a short amount of time, they’re becoming quite formidable.”
JPMorgan Chase introduced its own reward cards in 2009 with a program similar to AmEx’s. It is called Chase Ultimate Rewards.
Airport lounge access was once a perk basically guaranteed by AmEx. But American Airlines switched allegiance last year, turning over exclusive access to lounges to Citi cardholders. AmEx cardholders lost access to United Continental’s lounges in 2011 and lost the ability to transfer their points to United in 2012.
Even Discover Financial has gotten into the game. Last month, it introduced a credit card focused on building up miles that can be redeemed for travel.
AmEx hasn’t sat idle. To generate revenue, it has raised annual fees and interest rates on some products. It has also added perks for its customers, such as waiving foreign transaction fees and giving a $100 credit for incidental airline expenses for Gold Card members.
And when AmEx parted ways with United Continental, it went ahead and opened its own airport lounges. It has 13 worldwide so far, with plans to open more this year.
“American Express is still the gold standard when it comes to their rewards program, but lately it seems like all they’re doing is playing catch-up,” Kelly said.
While competitors have been moving upmarket, AmEx in response has been moving in the opposite direction. It now has two pre-paid debit cards, one of them with Wal-Mart. Pre-paid debit cards are typically aimed at low-income consumers who may not have checking accounts. The company also launched a no-annual-fee credit card last year aimed at “everyday” purchases — not the travel-heavy, corporate-expense-account business AmEx is known for.
AmEx isn’t going to let Citi walk away with its Costco card customers without a fight, either. It plans to spend aggressively to try to keep some of them because roughly 70 percent of spending on those cards was done outside the stores, according to AmEx.
“I don’t think there’s anything structurally wrong at AmEx,” said Sanjay Sakhrani, an analyst at Keefe, Bruyette & Woods. “They’re going to get in front of the revenue they are going to lose next year when the Costco relationship ends.”
Along with increased competition, AmEx is facing heavier regulatory pressure. Last month, the Justice Department won an antitrust lawsuit against American Express over its practice of making merchants sign agreements not to express a preference for one card over another.
If AmEx loses on appeal, merchants will be free to express their preferences, and that could force the company to lower the percent it charges them to process cards. That would be a drastic hit to AmEx’s bottom line, and company executives have acknowledged as much.
During the trial last summer, AmEx’s Chenault said the company would be “fighting for our survival” if it lost the case.
Copyright 2015 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
Activism
OPINION: Your Voice and Vote Impact the Quality of Your Health Care
One of the most dangerous developments we’re seeing now? Deep federal cuts are being proposed to Medicaid, the life-saving health insurance program that covers nearly 80 million lower-income individuals nationwide. That is approximately 15 million Californians and about 1 million of the state’s nearly 3 million Black Californians who are at risk of losing their healthcare.

By Rhonda M. Smith, Special to California Black Media Partners
Shortly after last year’s election, I hopped into a Lyft and struck up a conversation with the driver. As we talked, the topic inevitably turned to politics. He confidently told me that he didn’t vote — not because he supported Donald Trump, but because he didn’t like Kamala Harris’ résumé. When I asked what exactly he didn’t like, he couldn’t specifically articulate his dislike or point to anything specific. In his words, he “just didn’t like her résumé.”
That moment really hit hard for me. As a Black woman, I’ve lived through enough election cycles to recognize how often uncertainty, misinformation, or political apathy keep people from voting, especially Black voters whose voices are historically left out of the conversation and whose health, economic security, and opportunities are directly impacted by the individual elected to office, and the legislative branches and political parties that push forth their agenda.
That conversation with the Lyft driver reflects a troubling surge in fear-driven politics across our country. We’ve seen White House executive orders gut federal programs meant to help our most vulnerable populations and policies that systematically exclude or harm Black and underserved communities.
One of the most dangerous developments we’re seeing now? Deep federal cuts are being proposed to Medicaid, the life-saving health insurance program that covers nearly 80 million lower-income individuals nationwide. That is approximately 15 million Californians and about 1 million of the state’s nearly 3 million Black Californians who are at risk of losing their healthcare.
Medicaid, called Medi-Cal in California, doesn’t just cover care. It protects individuals and families from medical debt, keeps rural hospitals open, creates jobs, and helps our communities thrive. Simply put; Medicaid is a lifeline for 1 in 5 Black Americans. For many, it’s the only thing standing between them and a medical emergency they can’t afford, especially with the skyrocketing costs of health care. The proposed cuts mean up to 7.2 million Black Americans could lose their healthcare coverage, making it harder for them to receive timely, life-saving care. Cuts to Medicaid would also result in fewer prenatal visits, delayed cancer screenings, unfilled prescriptions, and closures of community clinics. When healthcare is inaccessible or unaffordable, it doesn’t just harm individuals, it weakens entire communities and widens inequities.
The reality is Black Americans already face disproportionately higher rates of poorer health outcomes. Our life expectancy is nearly five years shorter in comparison to White Americans. Black pregnant people are 3.6 times more likely to die during pregnancy or postpartum than their white counterparts.
These policies don’t happen in a vacuum. They are determined by who holds power and who shows up to vote. Showing up amplifies our voices. Taking action and exercising our right to vote is how we express our power.
I urge you to start today. Call your representatives, on both sides of the aisle, and demand they protect Medicaid (Medi-Cal), the Affordable Care Act (Covered CA), and access to food assistance programs, maternal health resources, mental health services, and protect our basic freedoms and human rights. Stay informed, talk to your neighbors and register to vote.
About the Author
Rhonda M. Smith is the Executive Director of the California Black Health Network, a statewide nonprofit dedicated to advancing health equity for all Black Californians.
Black History
Henry Blair, the Second African American to Obtain a Patent
Being a successful farmer required consistent production. Blair figured out a way to increase his harvest. He did this with two inventions. His first invention was a corn planter. The planter had the same structure as a wheelbarrow, with a box to hold the seed and rakes dragging behind to cover them. This machine allowed farmers to plant their crops more economically.

By Tamara Shiloh
The debate over whether enslaved African Americans could receive U.S. Government-issued patents was still unfolding when the second African American to hold a patent, Henry Blair, received his first patent in 1834.
The first African American to receive a patent was Thomas Jennings in 1821 for his discovery of a process called dry scouring, also known as dry cleaning.
Blair was born in Glen Ross, Maryland, in 1807. He was an African American farmer who received two patents. Each patent was designed to help increase agricultural productivity.
There is very little information about his life prior to the inventions. It is known that he was a farmer who invented machines to help with planting and harvesting crops. There is no written evidence that he was a slave.
However, it is apparent that he was a businessman.
Being a successful farmer required consistent production. Blair figured out a way to increase his harvest. He did this with two inventions. His first invention was a corn planter. The planter had the same structure as a wheelbarrow, with a box to hold the seed and rakes dragging behind to cover them. This machine allowed farmers to plant their crops more economically.
Blair could not write. As a result of his illiteracy, he signed the patent with an “X”. He received his first patent for the corn planter on Oct. 14, 1834.
Two years later, taking advantage of the boost in the cotton industry, he received his second patent. This time for a cotton planter. This machine worked by splitting the ground with two shovel-like blades that were pulled along by a horse. A wheel-driven cylinder behind the blades placed seeds into the freshly plowed ground. Not only was this another economical and efficient machine. It also helped with controlling weeds and put the seeds in the ground quickly Henry Blair received his second patent on Aug. 31, 1836
During this time, the United States government passed a law that allowed patents to be granted to both free and enslaved men. However, in 1857, this law was contested by a slaveowner. He argued that slaveowners had a right to claim credit for a slave’s inventions. His argument was that since an owner’s slaves were his property, anything that a slave owned was the property of the owner also.
In 1858 the law changed, and patents were no longer given to slaves. However, the law changed again in 1871 after the Civil War. The patent law was revised to permit all American men, regardless of race, the right to patent their inventions.
Blair died in 1860.
Bo Tefu
Gov. Newsom Highlights Record-Breaking Tourism Revenue, Warns of Economic Threats from Federal Policies
“California dominates as a premier destination for travelers throughout the nation and around the globe,” said Newsom. “With diverse landscapes, top-rate attractions, and welcoming communities, California welcomes millions of visitors every year. We also recognize that our state’s progress is threatened by the economic impacts of this federal administration, and are committed to working to protect jobs and ensure all Californians benefit from a thriving tourism industry.”

By Bo Tefu, California Black Media
Last week, Gov. Gavin Newsom, along with the nonprofit organization Visit California, announced that tourism spending in California reached a record $157.3 billion in 2024, reinforcing the state’s status as the top travel destination in the United States.
The Governor made the announcement May 5, referencing Visit California’s 2024 Economic Impact Report, which highlights a 3% increase in tourism revenue over the previous year.
According to the report, California’s tourism sector supported 1.2 million jobs, generated $12.6 billion in state and local tax revenues, and created 24,000 new jobs in 2024.
“California dominates as a premier destination for travelers throughout the nation and around the globe,” said Newsom. “With diverse landscapes, top-rate attractions, and welcoming communities, California welcomes millions of visitors every year. We also recognize that our state’s progress is threatened by the economic impacts of this federal administration, and are committed to working to protect jobs and ensure all Californians benefit from a thriving tourism industry.”
Despite the gains in tourism revenue, Visit California’s revised 2025 forecast points to a 1% decline in total visitation and a 9.2% decrease in international travel. The downturn is attributed to federal economic policy and what officials are calling an impending “Trump Slump,” caused by waning global interest in traveling to the United States.
To offset projected losses, the Governor is encouraging Californians to continue traveling within the state and has launched a new campaign aimed at Canadian travelers.
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