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M$2 Answers
A few years ago, they shifted from dealing only with relatively wealthy clients who could pay their bill in full every month to also issuing credit cards to retail consumers who were not wealthy and needed to pay monthly.
They did this during the time financial services were booming and they needed to grow to keep their shareholders happy. Since these cards carried relatively high interest rates, it provided another source of income - Interest.
The original AMEX card accounts were paid off monthly and did not produce any interest income.
Now they are looking at their hole card and what they see is that they have many thousands of customers who have already been laid off or are facing foreclosure, and are not making their monthly payments.
Customers who are in really bad trouble will undoubtedly just be terminated.
AMEX will have thousands of customers who are at relatively high risk of being laid off but who are not yet in trouble. They are trying to get these accounts paid off before they default - but without angering the cardholders.
To accomplish this, they are offering these carefully selected card holders a $300 prepaid AMEX card. It will still be an AMEX card and their friends and business associates will not suspect a thing. As they spend it down, they will be able to "refill" it. They will continue to have most of the advantages of a credit card. When the economy revives, I expect they will go back to these customers and offer them real credit cards but with much stricter credit controls.
You can leave an optional "tip" with Mahalo's virtual currency, Mahalo Dollars. If you are asking a difficult question that might require some research, or if you'd like a wide variety of feedback, a higher tip often leads to more answers to your question.
M$
You can leave an optional "tip" with Mahalo's virtual currency, Mahalo Dollars. If you are asking a difficult question that might require some research, or if you'd like a wide variety of feedback, a higher tip often leads to more answers to your question.
M$
