American Express the most prestigious of all the credit cards Visa Mastercard, everybody has those but only a select few have American Express here. I'll prove it in 2019. There were over 3.3 billion Visa cards out there over two billion Master cards and only 114 million American Express cards, that is a big difference. There are 29 Visa cards and 17. Master cards for every one American Express and that's because they're not as concerned with volume. They do a lot of things differently. For example, a Visa and MasterCard are issued by Banks. Whereas American Express handles most of what they sell you can now get one from Bank of America and some other places but 70 million of those cards were issued by them. Possibly. The biggest difference is that they're not simply offering a charge card. They're offering something more so maybe it's not even fair to compare their number of cards as a premium brand. They're not as concerned with how many cards are issued but rather how much money they make from each card. I think that might be the more telling number because it is significantly higher for American Express. That's because despite having fewer cards American Express has higher Revenue than Visa or Mastercard. It's higher than both of them combined so though, they're not as widely used. They Have their system in place that's working differently. They call it to spend Centric and I want to talk about it. But I also want to talk about the evolution of this company because they didn't start by providing credit cards a go back over a hundred years before credit cards even really existed. The name is American Express see in the 1840s Express Services were thought to be a promising new industry and just so we're on the same page here and express service is when you pay someone to transport. The thing for you due to the pricing and the logistics that you would typically use it for smaller, more valuable things. Well, the first one in the US was founded in 1839, and by the 1840s, there were a bunch of them and notably located in higher population areas like New York City in 1853 of these bigger ones in New York decided competing with each other was becoming harmful and they would all do so much better if they simply join forces. There are some big names here. That's when Henry Wells Will Liam Fargo and John Butterfield combine their separate Express companies into one larger one called American Express up until this point all of the most populous cities in the country were in the East the most in the Northeast and logically it those were the areas they serve but they formed American Express during the California Gold Rush for the first time people were making their way out west and big numbers and San Francisco would soon become the first big city out there. Henry Wells and William Fargo who were the first president and vice president of American Express saw some opportunity there. This was their chance to offer their services in San Francisco before anyone else and if the city kept growing like it did they would likely grow with it now the rest of the company wasn't crazy about the idea. They thought it was too risky and American Express would be better off focusing on the Eastern cities. The board of directors said that you two can go and do whatever. Do you want but we're going to stay right here and that's what happened when the two of them went out to San Francisco to start a separate company. And I think we all know how that eventually turned out. I think I should make this clear. They stayed with American Express as well as simultaneously running both companies. Through the rest of the eighteen hundreds, American Express continues to grow either merging with competitors or making deals with them as far as what territories that they would serve at making deals with the railroads and other transportation services. The Civil War was good for business because of men everything had to be shipped everywhere. The point is the cities were getting bigger. The population was growing and American Express was able to set up a system that allowed them to take advantage of this rapidly growing demand Henry Wells remained president until he retired. In 1868. That's when William Fargo took over until he I'd in 1881. He was then replaced by his younger brother James Barr go who is the person thought to have gotten the company first involved in financial services the year after he took over American Express introduced their money order. It was intended to be a cheaper, safer , more accessible version of what the US Post Office introduced almost 20 years earlier. They sold quite a bit of them partly because there was a high immigrant population and that was buying money orders, too. Send money back to their families since it turned out to be so successful that they followed up on it nine years later when they introduced their famous traveler's checks. I think the success of those played a part in them getting involved in the travel business a few years later. We can see here how they started by delivering stuff but then slowly progressed into other somewhat related businesses. It was a good thing that they did too because during World War One in 1918 the government took over everyone's Express. Jeans and American Express. It was reduced to only Banking and travel so had they not made those moves. I'm pretty sure that that would have been the end of them. That's how they existed. In the next few decades, a relatively smaller company is mostly known for their money orders and traveler's checks. But then in the 1950s, everything changed now, this was a time when credit cards were thought to be a promising new industry up until this point. There were no large scale of widely accepted cars. Cards 1950 the Diners Club Card practically changed the game and were accepted by multiple entertainment providers and showed the potential for a product like this. It wasn't long before various Banks across the country started introducing their own Regional cards 1958 is when American Express first entered the market with this purple travel and entertainment card this thing got popular so quick a 500,000 people possessed it within its first three months and I think we can say that This was the main reason that over the span of the 1960s their income grew ten times larger, and then the introduction of their famous green card and corporate cards helped propel them to that next level American Express transformed into one of the most respected valuable brands on the planets had a great slogan to what you've probably heard. It. Don't leave home without it. It's nice and simple and it practically became one of the most popular sayings of all time on an Express card. Don't leave home without it. I mean This credit card business helps them so much over the next few decades. They were able to acquire all these other Financial businesses. They've since sold them but at one point they bought an insurance company and a brokerage firm today of my perception is that they're mostly focused on their gold and platinum cards. I want to take a look at their platinum card because I think it's very representative of how they run their business first off. It's called the Platinum Card Platinum is a metal. That's Valuable and flashy much like American Express would like to be perceived. But beyond the name this car costs five hundred and fifty dollars per year just to have most cards that don't cost anything or if there is a cost. It's typically not this much I say this is reflective of their business because they generate four billion dollars a year from these card fees. It's a big part of their model. Another thing about the platinum card is there is no interest rate because the full balance has to be paid at The end of each month the idea is unlike the other providers American Express wants you to pay your bill on time for many of their cards like the Platinum one. It's a requirement to look more into this card as you can earn 60,000 membership reward points after you use your new card to make $5,000 in purchases in your first three months. This is the core of their business. See any seller who accepts a credit card has to pay for that ability to do it. When compared to Visa or Mastercard American Express generally charges them much higher rates. If you want to buy something from Walmart using your Visa card, that's typically cheaper for Walmart than if you were to use your American Express since Walmart has to pay them a comparatively high percentage of the transaction every time you use it. They want you to use it the more you use your card the more money. Thanks. So offering me $5,000 in 3 months is reflective of their overall plan. This is where they make most of their money by the way, and that's why it's called spend Centric the obvious question here would be why would these sellers even accept American Express then most people don't have them anyway, so why bother if it's going to cost more well that is happening. Sometimes historically people have had difficulty finding places that will accept it. So today It's better than it used to be. They say that in the US they believe that it's accepted. Just about as many Merchants as visas and the reason that they're willing to accept it. It's sort of because of that Prestige sees the people with American Express cards tend to be comparatively wealthier. They have higher credit scores. I mean, why would you pay the five hundred and fifty dollars a year to have it? If you don't plan on using it, wealthier people tend to spend more money, so the advantage for Walmart or wherever the merchant is is that it'll attract bigger Spenders to their business. He'll be giving American Express a higher percentage of a larger bill so it should work out for everybody and then finally the benefits that are the big reason that people would want to get this Platinum Card you already saw the rewards points at there's a ton of travel benefits things involving Uber and Delta. It'll give you access to that airport lounge and then the Platinum Card concierge. I'm not trying to sell this card. So I'm not going to go through everything but for many people, those benefits outweigh that caused are you starting to see the I have to mention this to their highest. The most prestigious card is the Centurion card also known as the American Express black card. Just look at that thing. If you have one of these you must have a lot of money because they are not easy to get. I think this takes things a little bit far even for American Express. First off they have to offer it to you. You can't just openly apply for it like almost every other credit card in the world. Nobody knows the exact criteria to get that invite but I doubt you'll get it unless you're spending hundreds of thousands of dollars on one of your other American Express cards, then once you get invited, you have to pay a five thousand dollar Initiation fee to get it and then a $2,500 fee every year to keep it. You have to be very wealthy to get this card and I just look at this as an extreme example of how American Express conducts their business. Let me know in the comments. Do you have one of those black cards? All right, you don't have to tell me that instead. I'll ask you, do you have any American Express cards? And if you do what has been your experience many of them cost more money and I suspect are still a little less widely accepted but do the benefits make it worth it. Maybe it's just that Prestige of pulling out the American Express card that makes it all worth it. And then on the other end for those of you who stick with the more basic Visa or Mastercard, what do you think of American Express? Is there anything I said in this video? Video to make you want to make that transition or are you perfectly fine with what you have and any other thoughts about American Express and their 170 plus year history leave them in the comments. I'd like to hear what you have to say.

Q: What is the main problem in this case? discuss it in detail.