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The history of American Express

How AmEx rose to prominence as a credit card issuer

By Ben Woolsey

More than a century and a half after its founding, American Express has become a global financial services powerhouse and one of this nation's most recognizable brands around the world.

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American Express started out in 1850 as a freight and valuables delivery service for the rapidly expanding nation. The fledgling U.S. Postal Service was unreliable at the time and only allowed shipment of letter-sized envelopes. This provided a business opening for the company to ship larger parcels and valuable items such as jewelry, cash, stock certificates and other merchandise.

The company took a turn when it began to realize more profit from a sector of its customer base that included banks and other financial institutions. Banks placed a high value on American Express' secure and reliable delivery service for interbank transfers and drafts made between eastern cities and the growing western territories. American Express then began focusing its efforts on this sector and used its connections to eventually enter the financial services arena.

In the late 1890s, American Express decided to compete with the banks they serviced, by issuing money orders. This line of business took off rapidly and allowed the company to expand into Europe, where the American Express brand name became associated with security, capital and dependability. Soon thereafter, the company had major offices in London, Paris, Antwerp, Zurich and Berlin.

The beginning of World War I forced American Express into the travel services businesses. More than 150,000 Americans were stranded in Europe in 1914 at the outbreak of the Great War. These citizens flocked to the offices of American Express seeking funds after other European banks refused to honor their American letters of credit. American Express honored these letters of credit in full, which allowed American citizens to fund their passages back home.

In 1922, American Express jumped into the travel services business by providing luxury steamship travel around the world, along with most other related services for passengers. Its traveler's check business meshed well with this well-heeled crowd of luxury globe-hoppers. The traveler's check business fueled the growth of the company over the next several decades, based on the upfront fees and in how firm invested the float income.

In the 1950s, American Express issued its first credit card, which caught on quickly in the booming postwar economy. In 1966, the company issued its first gold card, in an effort to cater to the upper echelon of business travel. Its platinum card debuted in the 1990s

American Express continues to be a powerful global brand through the present day with an array of consumer products ranging from the Blue Card to the ultra exclusive Black Card, which isn't publicly advertised, but issued by invitation only to the wealthy and famous). 

Published: November 15, 2005

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