Amex pilots charge card for twenty-somethings
American Express is testing a low-fee charge card with targeted benefits for customers in their 20s.
The Zync charge card is targeting a youthful market sector which Amex says is worth US$625bn a year. The card, which has to be paid in full each month, will be officially launched in the first half of next year.
The card has an annual fee of US$25, compared to the US$95 fee on Amex’s standard ‘Green’ charge card. An Amex Platinum card has a US$450 annual fee.
The card company is hoping to change the demographic in a market currently dominated by the affluent over-30s.
Amex is offering several different benefit packages with the Zync card, targeting environmentally-aware customers and those who prefer rewards or discounts on airfares, mobile phones, and restaurants and concerts.
The Social pack offers double points on restaurant and event purchases. The Connect pack gets double points on mobile and cable purchases, and the Eco pack earns double points at merchants rated by Greenopia, an online directory of eco-friendly retailers.
The ‘green’ package has no annual fee, while the others have annual fees of US$20. Customers can choose more than one benefit package.
Past attempts by Amex to capture a youthful demographic have failed, and it remains to be seen whether credit card loving young people will be willing to engage with the more careful spending habits of a charge cardholder. A survey by analyst Sallie Mae this year, found that 84% of US college students have credit cards, an increase of around 11% since 2004. The average balance students carry grew to US$3,173 in 2009.
The company is hoping that its targeted rewards packages will appeal to the intended market, and it has also set up an online community called “Zync Tank to get feedback from the 20-something demographic.
In November American Express announced the acquisition of the low-cost, Internet-based payment platform Revolution Money as a means of offering cheaper options to its clients.