American Express just sent me an email announcing that they will discontinue the Target Prepaid Card program effective March 21. Current cardholders have just over two months to spend down the balance before they will cease working.
American Express has another prepaid product, Target REDcard and known as “REDbird” for its similarity to the Bluebird cards offered at Walmart. It was more popular than the Amex for Target product and the loss of credit card loads in October was a big blow to manufactured spending techniques. They never even finished the rollout of Target Prepaid Cards in stores, as I don’t recall they were ever sold in Seattle.
This news indicates that Amex is getting more serious than ever about creating a healthy prepaid card portfolio that eliminates the tricksters like us. Just last week they sent out mass emails to announcing they would suspend the accounts of people using Bluebird cards who had suspicious activity, such as frequent loads and unloads. They’ve done similar things before, but what was surprising was the scope — I haven’t used my Bluebird card in over a year and still got an email. (Frequent Miler has some tips if you were spared the carnage.)
Current cardholders are being told to switch to Serve.
If you are interested in a new Prepaid Account with additional features, we invite you to sign up for one of our American Express Serve® Prepaid Debit Accounts and receive a special offer. If you register here you’ll get a $25 credit when you spend $25 with your new Account
Amex may have launched too many different card products at once to see which ones would stick, while keeping the rules loose to try to build momentum as it was losing business elsewhere. Costco represented 10% of its card portfolio but has switched to Citi and Visa. Marriott is likely to keep Chase after it acquires SPG.
Ironically, this downmarket shift to Walmart and Target (as well as the launch of the fee-free Everyday card) has been happening at the same time that Amex tries to burnish its elitist attitude with Centurion Lounges and other luxury benefits for their Gold and Platinum cardmembers.
By jettisoning so many Bluebird cardmembers and simply terminating the Target Prepaid Card program, it seems that Amex is starting to give up. From both an MS perspective and for the sake of industry competition, I’m really curious to see what happens next.