Bank of America to issue American Express
By Ben Woolsey | Published: January 12, 2006
Not to be outdone by a previous move made by Citibank, Bank of America has officially announced that it will begin issuing credit cards on the American Express Open Network. The decision to offer American Express-branded credit cards is expected to help the bank's efforts to attract new customers according to a press release from the nation's largest credit card issuer.
Visa and MasterCard bank membership requirements previously prohibited member banking organizations from issuing competitor-branded cards (i.e. American Express or Discover Card). This membership bylaw was rescinded as a result of an anti-trust lawsuit brought by American Express in 2004.
The first major credit card issuer to take advantage of the 2005 Justice Department ruling that allowed banks to issue American Express Cards was MBNA, which was itself acquired by Bank of America in a $35 billion deal that was officially approved on Jan. 1, 2006.
While the American Express brand is popular across many population segments, Bank of America sees the product as having most appeal to its private banking and premier bank customers. These are decidedly upscale customer segments that are accustomed to the perks and prestige that is associated with the American Express brand and Bank of America is seeking to cement their loyalty with an ancillary product set.
Regardless of Bank of America's initial product targeting, the American Express products should find broad appeal once they become featured online through CreditCards.com.
- TransUnion to pay $60 million to consumers flagged as criminals – A jury sided with a consumer who claimed TransUnion violated federal law over OFAC alerts ...
- House passes CHOICE Act that would gut consumer protections – The House of Representatives passed a GOP-backed deregulation bill that would undo Dodd-Frank consumer protections, but it faces uncertain future in the Senate ...
- Store cards urged to reconsider 'deferred interest' credit card offers – The Consumer Financial Protection Bureau sent a letter to retail card companies urging them to reform their 0-percent "deferred interest" promotions to make them simpler, less risky for consumers ...