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TRS U.S. Consumer and Small Business Services Group
Our U.S. Consumer and Small Business Services Group is responsible for
our proprietary charge card products - the American Express Personal -
Gold - Platinum and Centurion Cards - as well as our revolving credit
cards - Small Business products and services - and Consumer Travel.
U.S. Consumer Card
The U.S. general purpose charge and credit card market
continues to be the largest in the world, and the progress
we have made to grow this business over the past few years
has been terrific. Our goals are simple: to increase the
number of customers who use those products; to increase the
number of cards in force; and to increase customer spending
and lending activities on those products. Our growth in 2000
was due to success in all three of those goals.
Two of the products we launched in the latter part of 1999
made significant contributions to our results in 2000. Blue
from American ExpressSM and the cobranded cards we launched
with Costco delivered above expectations in terms of
spending and credit performance. They have been exceptional
additions to our U.S. portfolio. At year-end 2000, we had
issued more than two million Blue from American Express
Cards and more than one million Costco consumer cards in the
United States alone.
During 2000, we also launched the Hilton HHonors Platinum
Credit Card and renewed our agreement with Delta Air Lines
to extend our cobranded Delta SkyMiles Credit Card from
American Express. We launched the Always Double Miles
promotion, through which Delta SkyMiles cardmembers earned
two SkyMiles for every eligible dollar charged to the card
for purchases made at supermarkets, gas stations,
drugstores, home improvement stores, the U.S. Postal
Service, wireless phone bills and Delta purchases.
Our focus on retail and everyday spend categories continued
to contribute strongly to business growth. Expanded merchant
coverage in these categories has spurred strong cardmember
spending in these industries. In the United States from 1998
through 2000, our charge volume in travel industries grew 14
percent, compared with growth in retail of 48 percent and in
everyday spend categories of 102 percent.
Loyalty programs such as Membership Rewards are
instrumental in increasing cardmember retention and
profitability. In the United States, Membership Rewards
enrollees have 54 percent lower attrition, spend an average
of 40 percent more in the first year of enrollment, have
half the credit loss rates of non-enrollees, and pay their
bills faster. In fact, the average profitability of each
Membership Rewards enrollee is more than five times greater
than that of a non-enrollee.
We also saw progress in the growth of our
revolving credit portfolio. In 1996, we ranked ninth in the
United States in lending receivables, with $12 billion of
receivables. By 2000, our U.S. balances more than doubled,
with a growth rate exceeding that of our competitors. We are
now the sixth largest consumer lender in the United States.
What is most notable about this achievement is that our
growth until now has been achieved organically rather than
through portfolio acquisition, which is how some of the
other top issuers have gained share during this period.
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