American Express CEO Steve Squeri told CNBC’s Jim Cramer on Tuesday how the company attracted more millennial and Generation Z customers, saying the cohort made up 60% of new card acquisitions during the last quarter.
Squeri said that in realizing the importance of having younger clientele, American Express strived to offer cards with a high value proposition for the group. Younger cardholders create a greater “lifetime value” than older ones, as they will continue to use their American Express cards as they age, he said.
“We used to go after them with a no-fee card, but a no-fee card didn’t have a lot of benefits — that’s why you pay no fee for it,” Squeri said of millennials and Gen Zers. “When you look at a platinum cardholder who’s spending, you know, $695 and maybe getting $1,400 in value, it’s a no-brainer for them.”
The younger customer base is also growing because more merchants accept American Express cards than in previous years, Squeri told Cramer. He also said that cardholders under 35 did 70% more transactions at restaurants than other cohorts.
“When you think about someone who’s acquired the card in the last six or seven years, Amex is accepted everywhere,” he said. “And so they’re using the card now for everyday purchases.”