American Express Announces Major Changes in Reward Programs

American Express cardholders will find notification of a significant change in the their rewards program in their August bill. According to the Wall Street Journal, American Express will announce later today they are cutting rewards and adding fees for some of their popular rewards programs.

For example, starting October 1, the Reward and Preferred Rewards Green, Gold and Platinum charge cards will no longer offer double reward points for everyday purchases at supermarkets, drug stores and gas stations. Membership Rewards options will no longer be offered to charge-card users; consumers would need to pay a fee to be upgraded to Membership Rewards.

"Generous rewards and rebates have become one of the major marketing tools that credit card issuers employ to expand their business. These rewards have been very attractive to consumers," says Bill Hardekopf, CEO of LowCards.com. "However, we have been saying for months that consumers should take advantage of these generous offers because issuers may be forced to add or increase fees, or possibly reduce the level of the rewards. We now see American Express cutting back on some of these rewards. We think other card issuers will also decrease levels of their reward
programs and possibly increase fees for reward cards."

Cardholders who have a card in the Membership Rewards Options will be switched into the basic Membership Rewards program and should expect an increase in their annual fee. The annual fee may rise from $65 to $95 for a Green card with the Options program.

The changes do not apply to the popular Blue reward card or the Delta Airlines co-branded cards.