Gen Z is obsessed with credit cards. Almost 84% of 22 to 24 year olds have a credit card. But when current millennials were the same age, that figure was just 61% if not low. But it's not just the standard no fee starter cards that the kids are signing up for, they are jumping straight to the premium offerings as those cards does offer a lot of perks and at the same time it shows one hell of a status symbol.
But there's one premium credit card brand that has grabbed Gen Z's attention, and that's none other than American Express.
Here's how Amex managed to win over Gen Z.
It was not that long ago that young people were falling out of love with credit cards as there have been many alternatives like buy now, pay later as well as Free Credit Cards and they were kind of afraid to pile up debt as they seen their parents pile up credit card debt after the financial crisis and just getting airport lounge benefits were not enough for people to make that choice.
American Express got clobbered in the early 2016, its price to earnings ratio fell way under 10x, which is historically very low for a company of its size but now it's a different story.
Shares are up by 25% this year, powered by the very same perks that was supposed to be shunning credit cards.
But how did Amex manage to convince the youth to jump into the world of elite credit cards with hefty annual fees, and all?
Previously American Express was only looking at the top 1 percent people as their customer base but in the latter half they changed their strategy towards targeting the Millenials and GenZ and now they might be one of the most profitable demographics for American Express.
Last year, Gen Z Millennials accounted for over 75% of new American Express accounts. Just think about that, this used to be the card that was used by only the top 1 percent people but now, three out of every four signups came from people who are nowhere near the top 1 percent.
The Perks
According to a lot of platforms the Amex Platinum card has an annual value offering of around 1600 USD and that is not something to look away from.
The real draw for owning an Amex, it's the sick perks which includes Airport lounge access, entertainment credits, Uber credits, travel credits, membership to other different services and many more.
There is no denying the fact that Amex is still the cream of the crop when it comes to credit cards. And toss in a healthy dose of young people's desire to make their Instagram friends jealous with all the perks and you can see why 75% of new card signups came from millennials.
Now I also have to say that I am also keenly looking to get myself a American Express Card and if I get one for myself then rest assured I will showcase all the perks I get.
