Credit-Card Rewards War Crimps Bank Profits as Eyes Turn to AmEx
- Big U.S. lenders saw quarterly card income fall as costs rose
- AmEx may report 23% slump in profit on Wednesday, analysts say
The Chase Sapphire Credit Card Craze
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A rewards war that’s helped U.S. credit-card customers amass points for perks or cash proved costly in the latest quarter for some of the nation’s biggest banks. That may signal fresh pain at American Express Co.
Issuers have sweetened rewards, cut fees and sought to improve services to lure customers, making it tougher to grow profits. In the past week, three of the biggest lenders -- Citigroup Inc., JPMorgan Chase & Co. and Bank of America Corp. -- said combined income from card operations dropped 15 percent to $3.1 billion in the third quarter from a year earlier. At the same time, expenses in their consumer-bank units rose 1 percent to $15.3 billion.