American Express 2009 Annual Report Download - page 11

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09
2009, billed business was down 16 percent year-
over-year. e decline eased to 11 percent in the
third quarter. By the fourth quarter, we saw a
return to growth, as billed business rose 8 percent.
Granted, comparisons became easier because
the fourth quarter of 2008 was especially weak,
but returning to growth was an important
accomplishment. Few other major card issuers
were able to grow spending during the quarter, and
our gap versus our competitors widened.
ere’s a long way yet to go before cardmember
spending returns to pre-recession levels, and persistent
unemployment poses significant risks, but we
believe we have the products and value propositions
that will enable us to compete successfully.
Credit Performance
Along with cardmember spending, credit
performance improved as the year progressed. We
beneted from the early actions we took to manage
at-risk accounts, improve decision-making, and
help cardmembers who were going through
temporary nancial hardship.
The write-off rate in our managed worldwide
lending portfolio was 7.3 percent for the fourth
quarter, up from 6.5 percent a year earlier, but
much improved from the 9.7 percent level that we
reached in the second quarter. Accounts 30-days
past due improved to 3.6 percent from 4.6 percent
a year ago. Past-due rates are a leading indicator of
future write-os, so these trends are encouraging.*
For example, during the year we:
• Promoted the American Express Charge Card as a
product that’s right for the times because its pay-
in-full nature encourages responsible spending.
• Launched new tools and resources to help
cardmembers manage their money.
• Re-focused our lending portfolio, emphasizing
premium co-brand cards that have superior
economics and credit performance.
• Enhanced our customer rewards programs,
with new features such as everyday redemption
options in Membership Rewards.
• Won a record number of global commercial card
accounts by providing more solutions to help
companies track and control their spending.
• Shook up the prepaid card industry by
eliminating all aer-purchase fees, an industry
rst that delivers more value to our customers.
• Expanded our network of merchants who
accept American Express cards and partners
who issue them.
• Launched new advertising in the U.S. and
selected international markets.
ese moves all helped set the stage for the rebound
in cardmember spending we experienced late in
the year, as the economy began to show some early
signs of improvement. For therst six months of
DON’T TAKE CHANCES,
TAKE CHARGE
ad campaign shows the
benets of using the
American Express
Charge Card 0FEES AFTER PURCHASE
with American Express Gift
Cards, an industry rst
providing more value
0
* Managed basis assumes our cardmember loans have not been securitized. On a GAAP basis, the net write-o rates in our worldwide
lending portfolio for the fourth quarters of 2009 and 2008 were 7.4 percent and 6.5 percent, respectively. On a GAAP basis, the 30-day
past-due rates at December 31, 2009 and 2008 were 3.6 percent and 4.4 percent, respectively.
AMERICAN EXPRESS COMPANY