Chase Credit Cards Poised To Make A Move
The credit card market for wealthier clients and small businesses has long been dominated by American Express, but J.P. Morgan Chase is now positioning itself to compete with AMEX in these lucrative areas of the credit market.
American Express managed the credit crisis very well indeed compared to their contemporaries. They wisely avoided subprime borrowers, for the most part, while other credit card issuers flocked to them like bugs to a light. The result, well we now know that the record number of defaults is from subprime card holders so we could say that the credit card companies got zapped.
The strategy to go after people with shaky credit records backfired in a big way, especially for Bank of America. Do you recall that they were actually giving credit cards to illegal aliens? Brilliant huh?
J.P. Morgan Chase however, took a more conservative approach and because of that are now poised to emerge as one of the few winners when unemployment finally begins to decline and the economy once again starts to grow.
Chase is the third-largest credit card issuer in the United States and is now said to be targeting more affluent consumers along with small business owners and corporations.
This new strategy by Chase directly competes with American Express. Other credit card companies are expected to struggle well beyond the early stages of the economic recovery. Discover is seen as too small to be a serious rival while Citigroup and Bank of America still must repay the huge bailouts that they received from the government.
The reason Chase is aggressively pursuing a more wealthy clientele is because they are seen as less of a credit risk.
American Express for their part are still the king of the hill in this credit card niche and are basically saying to Chase, “bring it on”.
This has been an Amex’s primary market for 50 years now and they have a pretty good idea of what they’re doing so this competition should definitely be interesting to watch.
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