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AmEx pays $300 dollars for the account

15 May 2009

Largest American bank cards-emitter American Express (AmEx) is ready to pay $300 to each client, in case of debt liquidation of debt account. Analysts believe that such step will help company to reduce growth of nonpayment under credits.
In terms of financial boom the card companies actively increased the client base by means of special offers - from charge of bonuses to indemnification of part of the expenses made by card. However, situation has cardinally changed during the crisis. In order to pay to get rid of the clients, menacing to bring the problems to company in the future, AmEx is ready to take radical measures now. AmEx has offered its clients «to simplify the finance», having closed credit accounts. In case of the response to this special offer clients will receive the prepaid bank cards for about $300. AmEx has not informed exact number of clients to which this offer has been directed, no less than criteria on which borrowers were selected. AmEx analysts prove that they consider various variants of management of credit risks, being based on the general credit profile of their clients.
Analysts notice, that, offering money to clients, the company tries to solve at once two problems. First of all, AmEx guarantees primary money repays against the clients, using credit cards at once of several companies-emitters, and secondly, the company relieves itself of a part of the risks connected with nonpayments under credits. It is better to make it now while clients still have any money. It is worth of mentioning that nonpayments under the credits, which have been given by AmEx, have grown for about 7 %. According to Goldman Sachs analysts, defaults under credits by the end of this year can reach 11 % that will lead to decrease AmExs profit by 40 %.
American Express suffers from caused by crisis of growth of nonpayments and decrease in number of card operations more than its competitors -Visa and MasterCard - as they do not give credits and offer only serve transactions of banks. The company has already received $3,4 billion from the US Ministry of Finance.


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