American Express (NYSE:AXP), a prominent player in the Consumer Finance industry, has announced a series of changes to its Business Gold Card, including a rise in the annual fee and the addition of new benefits. The company, which has a market cap of $106.88 billion and a P/E ratio of 14.66, announced the changes on October 3, 2023, and they will take effect from February 1, 2024.
The annual fee for the card will increase to $375 from the current $295. In return for this higher fee, cardholders will receive a monthly Walmart+ credit of $12.95 and a $20 flexible business credit for eligible purchases at vendors such as FedEx (NYSE:FDX), Grubhub, and Office Supply Stores. This is in line with American Express's high earnings quality, with free cash flow exceeding net income, as noted by InvestingPro Tips.
In addition to these changes, the card will now offer 4x points on transit purchases and wireless telephone service charges up to a spending limit of $150,000. This marks a shift in the rewards program, as these rewards were previously offered for airfare and shipping purchases. This aligns with the company's practice of yielding a high return on invested capital, another point highlighted by InvestingPro Tips.
On October 4, it was further confirmed that the Business Gold Card will continue to award 3x points on AmexTravel.com. The card, which is available in a rose gold design, offers 4X Membership Rewards points on business spends.
Additional features of the updated card include a Pay Over Time option and Business Blueprint integration for financial overview. There is also flexibility in the redemption of Membership Rewards points. These features are backed by the company's ability to maintain dividend payments for 53 consecutive years, as mentioned by InvestingPro Tips.
The revamp of the Business Gold Card by American Express underlines the company's efforts to provide more value to its customers through enhanced rewards and benefits. The changes are expected to appeal to businesses that have significant expenditures on transit, wireless telephone services, and at participating vendors.
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