American Express wants you to leave home with out them, seriously- they’ll even give you $300

Well, that applies to some of you. Before jumping in, let me just say that I did not plan to post another entry on the dismal economy. I thought that maybe fashion week would be a more fun topic. But alas, one of my doom-and-gloom friends, who is also obsessed with the status halo that accompanies the Amex card, forwarded me a link to a very interesting move on the part of this once venerable company.

First, American Express conjured up a risk-assessment methodology that took into account where one shopped.That is, if you shopped at the same stores as other cardholders who had defaulted on their accounts at an inordinate rate, Amex might have snatched your card away. The press got hold of this, and the company backed-off. But that little centurion on the front of your Gold Card is a clever fellow. In an effort to clean its customer rolls of credit-unworthy customers, Amex is offering $300 for some of its members to pay off their balances and cancel their accounts within a specified time frame.

Somewhere in here is lesson about line extensions and brand dilution. Some time in the last decade or so, American Express seems to have shed some of its exclusiveness, extending itself to partnerships like Delta, and launching credit products that could be paid over time, unlike the traditional charge card, which must be paid in full each month. In the era of quickly rising home values, and seemingly limitless credit (i.e. like 2 years ago), the lure of all those potential customers must have seemed unbearable to those poor marketers at American Express. I supposed with the collapsed economy, folks aren’t so sure about mom and dad footing the bill for little Johnny’s “credit-building” experiment involving a flat screen television and gravity bong for his freshman year dorm room.

The funny thing about the $300 offer is that more like than not, the customers who are eligible for the offer probably are in no position to pay off their balances in just a few months. And those who are, probably don’t want to give up their cards.

Check out more on the Credit Matters blog.