Why Amex Doesn’t Like Me

Recently I got a letter concerning my American Express card. “Great things are happening with your Sheraton Starpoints Credit Card that can make it more valuable to you than ever,” is how it began. Immediately, I knew this would be bad news.

The one chapter in The Cluetrain Manifesto that I really enjoyed was called “Markets Are Conversations,” written by Doc Searls and David Weinberger. One of its messages was that companies ought to stop insulting their customers with obvious double-talk. “Speak real words,” they advised. (Their argument was, or is, that the World Wide Web makes it so easy for consumers to get real information from each other, or even from honest employees of less-than-forthright corporations, that disingenuous marketing and customer relations won’t cut it any more: “The new Web conversations are remarkably sensitive to the empty pomposity that has served marketing so well. Until now.” I have a feeling that the Web’s effect will be a little more complicated than that, but then again I’m writing this online.)

I guess American Express hasn’t boarded the Cluetrain quite yet. The letter went on to say that my card has “been upgraded and is now the Starwood Preferred Guest Credit Card from American Express. The new name reflects the fact that your new Card earns you Starpoints and free stay not only at the Sheraton, but also at Westin Hotels and Resorts, Four Points by Sheraton, St. Regis, the Luxury Collection, and W Hotels.” (Starpoints are basically like frequent-flier miles for Starwood-owned hotels, and I earn such points with most purchases made with this card.) Exciting news, I guess, but my “old” card did that, too. So, all that’s changing is the name?

Of course not. Near the end of the two-page letter, this sentence was quietly mumbled: “Upon your anniversary date after June 2002 … a $30 annual fee will apply.”

Aha! I currently don’t pay a fee. So, the main effect of being upgraded is that I’ll now have to pay $30 a year, whereas before I paid nothing. I called to see if I could opt out of the exciting upgrade and leave all as it is. Nope. This is an “across the board change,” the customer service rep replied. I then double-checked the date by which I’d have to cancel the card to avoid the fee, and he confirmed it without further comment.

There are two points to be made about this. One is that, for better or worse, corporate obfuscation isn’t going anywhere any time soon, and this letter is a good example of why. I happen to think Amex and its hotel partner would have been better off simply announcing that they were introducing a fee, then demonstrating how the card, through the Starpoints program, might pay for itself. Instead it spews out an array of potential benefits and leaves it to me to do the math. The hope, really, is that I won’t do the math, won’t even finish the letter, and will simply follow the path of least resistance and accept the new fee. In lieu of proof, the letter offers the contention that, “with all the exclusive benefits your new Card offers, it can, without question, provide greater value today than ever before.”

Well, sure, I guess it can. The main carrot being dangled is more Starpoints; I can get 1,000 “bonus” points the first time I use my card to stay at a Starwood property between now and the end of next June. And what would those be worth? The letter offers no examples. But here’s one: It takes 10,000 points to get a free, one-night stay at the W Hotel on Lexington Avenue in Manhattan (a “Category 4” hotel in Starwood’s system). Normally this would cost about $250. So in that instance my 1,000 bonus points would be worth $25—less than the fee I’m paying. Of course, I can continue to rack up bonus points, at 500 a shot, for my next 10 Starwood stays during that period. But obviously each hotel stay is costing me money, so this only makes sense if I was planning to stay in Starwood hotels anyway. If I am, great, the new program might be good news for me. If I’m not, there’s a good chance I’ll end up a net loser as a “preferred” guest. Under the old setup, I didn’t have to worry about it—the card didn’t cost me anything, and from time to time I’d build up enough points to get a free room. That’s why I was pleased with it.

But this brings me to Point 2: I suspect Amex doesn’t really care if I bail on them, because for the years that I’ve used this card, I’ve been a total leech. I’ve never paid a fee, and I’ve never carried a balance, so Amex doesn’t rake in any interest charges from me. This, of course, makes me a very bad customer in the credit card world, and I assume it’s why my mention of leaving the fold was met not with a counteroffer or a pitch for some other Amex product but with stony silence. A theme of Robert D. Manning’s exhaustive recent book Credit Card Nation is that it’s consumers who endlessly revolve debt and rack up huge charges who are the great targets of credit card issuers, and the source of most of their profits; it’s a business that depends on desperation, lack of financial savvy, or both. (“Those who need credit the most,” Manning adds, “ultimately subsidize the low-cost credit of those who need it least.” And so it is that a “convenience user” like me, he asserts, is the “deadbeat” in the eyes of card issuers.)

So, American Express can shrug off my complaint that I found this letter’s lack of candor insulting. Chances are, if you’re paying enough attention to be insulted, they don’t want you as a customer anyway. I wish I could say that this is a doomed strategy and American consumers these days are far too clever to be fooled. But if that were true, the credit card business would not be nearly so profitable as it is.