Why Gen Z is Obsessed With Amex? (My Reaction)

Hey, Credit Warriors, welcome to the show. So a video came up on my feed today called Why Gen Z is obsessed with Amex. It's from a relatively small channel called Morning Brew Daily, about 80,000 subscribers. But this video has over 140,000 views. So a very successful video from any channel. And today I'm going to react to this video and see if what they are saying is true. I mean, it's over 100,000 views. So it's obviously resonating with a lot of people. And this video is brought to you by Silo. They're doing the best sign up bonus I've ever heard of. But more on that later. Gen Z is obsessed with credit cards. Yeah, I wonder why that is. Maybe because there's so many YouTube channels and blogs talking about credit cards. 84% of 22 to 24 year olds have a credit card. But when current millennials were the same age, that figure was just 61%. Right. So that is actually a 30% increase if you take. Yeah, it's about a 30% increase from millennials when they were the same age as Gen Z to Gen Z now. So I wonder what the reason is. Let's keep watching. They are jumping straight to premium offerings. You know, those cards that make that clang when you drop them at a dinner with friends. Yeah, that totally has something to do with YouTube. I mean, actually, to be honest, though, the current Amex Platinum, it doesn't really make that much of a clang. Look, I mean, just yeah. Compare it to the the custom lion credit card that I have. That that really was a clang. But, you know, they kind of changed when they brought in the old the the tap to pay. They actually had to reduce the amount of metal in the card. At least that's my understanding of it. So they don't clang quite as much as they used to. If you got the old platinum with actually platinum written on the card, that's the one that clangs a little bit more when you drop it down on the table. Anyway, let's keep watching. There's one premium credit card brand that has grabbed Gen Z's attention, and that's American Express. All right. So, yeah, I think that's true. American Express, it's kind of like the Apple or the Tesla of credit cards. You know, there are just certain companies that they can't put a foot wrong no matter what they do. They just people just love them. All right. I mean, Apple, it's expensive. They have some weird design features like like this mouse, for instance. The charging port is here, right? So when you're charging it, if the battery completely runs out when you're charging it, you can't use it. You have to buy an additional spare wired mouse to use when you're charging your regular mouse is ridiculous. Why didn't they just put it here? OK, Apple, Tesla, like all these companies have like a cult following. And I think Amex is the credit card equivalent of those. OK, people are just you have this phrase Amex fanboys, right? People are just crazy about it. Anyway, let's keep going. Once upon a time, American Express was looked at as one of the most exclusive credit cards only marketed to older people in higher tax brackets. Business owners, jet setters, your neighbor who's in the waste management biz. Your neighbor who's in the waste management business. Actually, it's funny. It's not very glamorous, but there is a lot of money in industries like that. Boring industries, waste management, laundromats, like car washes, like things that are just sort of like they kind of go under the radar. But you can generate a lot of money doing that, OK? You're not a crypto bro or whatever, but, you know, no one really cares about it. But actually, you can become a millionaire. Last year, Gen Z millennials accounted for over 75 percent of new American Express accounts. Yeah, this is true because I listened to the earnings call of Amex, right? Because I'm reporting on this whole industry. And yeah, they do keep saying that their, you know, Gen Z or millennials proportion of applications is getting bigger. It is growing. And also that their coupon book style, you know, strategy where they hike the annual fee, but then give you a lot of credits to make up for it is working. They keep saying in these earnings calls that it is working. I wonder if that is the strategy that these guys are going to point out as to why Gen Z is obsessed with Amex. Let's take a look. But first, guys, I know that you're watching this because you are into making a good return on your money. But how can we do that when the Fed keeps lowering interest rates? Those of you with money in savings accounts are going to feel the pressure. I keep getting emails from my supposedly high yield personal savings account, which used to be 4.3 percent, saying that the rate is going down. First, it was 4 percent. Then it's 3.9. The most recent email says it's going down to 3.8 percent. 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Well, for my viewers, Silo is offering new users a very special deal. If you deposit right now using my link below, they will boost your deposit by 3 percent up to a 3,000 dollar bonus. Combine this with 4.26 percent U.S. Treasuries and you can lock in over 7 percent for the entire first year. This is a limited time launch offer, and it's only available for the first 10 million in deposits and a big chunk of that is already filled. So if you want to get a 3,000 dollar bonus and lock in 7 percent before the Fed cuts again, the link is below. All right, let's keep watching. Young people were raised on subscriptions. The average American spends 219 dollars a month on subscription services. Netflix, Spotify, the gym. What's one more to toss into the fray? Yeah, I don't think I spend that much, but I see what they're kind of arguing. They're kind of arguing that the annual fees on, you know, Amex cards, the ones that have high annual fees like Amex Gold, Amex Platinum. It's kind of equivalent to a subscription. These young people are paying all these subscriptions already anyway. So just tossing another one in there. It kind of reminds me of that that World Economic Forum thing. Like in the future, you'll earn your own nothing, but you'll be happy. Right. Because everything is subscribed to. Right. You subscribe to your car. You rent your clothes. You subscribe to your girlfriend. No, I'm just kidding. All right. But anyway, it's that kind of idea, right? Like basically subscribing to things, paying monthly for stuff. And Gen Z seems to not mind it. Let's keep going. Gold cards come with a 250 dollar annual fee. The Platinum card will run you six hundred and ninety five dollars a year. But those numbers don't feel as scary if you were raised in a subscription economy. Plus, the sheer amount of education around credit cards makes it easy to know if you are getting your money's worth. Look at Mark Reese there. He's got such a lovely smile. Yeah, basically. OK, so they're saying that it doesn't feel scary because young people are already used to subscribing to things. But I think they're probably going to talk about all the credits as well, because the credits that come on these cards, they certainly offset the annual fee. OK, because there's a load of credits for subscriptions and some of those subscriptions, young people, Generation Zers are probably paying for anyway. OK, like things like Walmart Plus or things like Paramount Plus, which comes with Walmart Plus. And there's a digital entertainment credit on the Amex Platinum that gives you like the New York Times or I think I use it for the Wall Street Journal. I'm pretty sure. Anyway, let's keep going. According to the Points Guy, the Amex Platinum card has an annual value of sixteen hundred dollars. So the math is mathing. The math is mathing. They didn't really need to go and ask the Points Guy for that. Like they could have just gone on the site and literally there's a thing on the Amex site that tells you it's, you know, how much it is. But anyway, OK, we're getting into some perks now. The real draw for owning an Amex, it's the sick perks. Airport lounge access, entertainment credits, Uber credits, travel credits, airport lounge access, membership to Clear Plus, airport lounge access. Did we mention the airport lounge access? It's the sick perks, man. Yeah, I see that the Amex clientele has really changed, right? I don't think your neighbor in the waste management business would be using the word. That's sick, man. That was sick. I mean, the perks are great. Like on the Amex Platinum, I really do like the perks. Airport lounge access. He mentioned it three times or was it four times? But what I like, a perk I really like on the the Amex Platinum is the fine hotels and resorts collection. And there's a two hundred dollar credit for that per year. So you can get two hundred dollars off a luxury hotel. But the really cool thing is you get like early check in, late check out. You get free breakfast every night, you know, and often a credit for room service of one hundred dollars during you can save so much money. I've I've checked out of hotels with like hardly anything left on the bill at the end, and I've saved literally like five hundred dollars by using the Amex fine hotels and resorts collection. We used it at the Fairmont Orchid in Hawaii for a wedding. And on the last morning, the bride's like, hey, guys, you've got to check out at noon, right? Like and I'm like, yeah, yeah, sure. And we're just sort of lounging around by the pool. We didn't tell her that our checkout was 4 p.m. because we booked through fine hotels and resorts because we have the Amex platinum. But anyway, so my favorite perk actually probably is the fine hotels and resorts collection. Great for Vegas. But the airport lounge access thing is cool. It's just that this past year I haven't really traveled that much. My my most recent vacation was to Hawaii in fall twenty twenty three and actually in twenty twenty four. I haven't been anywhere. I'm going to. Well, when you're watching this, I'm probably in the UK having Christmas. So I just got in there with a vacation right at the end of twenty twenty four. Anyway, let's keep going. 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. I mean, travel. And you can see why 75% of new card signups came from millennials and Gen Z. Yeah, so actually that the the title was Gen Z, but they seem to be talking about both millennials and Gen Z. If you don't know Gen Z, well, let's start with millennials. Millennials are like 1980 to 1994 birthdates, right? Gen Z is ninety five to twenty twelve. So I'm a millennial. I was born in eighty five. My wife is a millennial. She's ninety one. She's just in there. And then, yeah, ninety to ninety five to twenty twelve is Gen Z. Those guys are like in their 20s right now. So, yeah, I mean, we are we are obsessed with it. I guess we are a generation, us and the and the Gen Z is we are a generation when credit cards have become a lot more popular. And I think it is because of the travel rewards. I think like what that guy in the shorts is saying, it is true. The guy on the left, it really is because of travel. And I think a lot of the social media like Instagram and things like he mentioned Instagram, making your friends jealous, that really helps. That definitely helps. In a way, it's sort of free advertising because people post photos like in airport lounges and stuff on Instagram and their friends are like, well, how did you get in there? And then they're like, well, you know, I got in there because I have the Amex Platinum. And then the friends like, oh, I want that. I'm going to sign up for that. Oh, six ninety five a year. Don't worry. I'm used to subscriptions. And it's sort of like viral advertising like that. Gen Z is accruing debt at a faster and higher rate than millennials ever did. The fourth quarter of twenty twenty three marked an all time high for credit card delinquencies since at least twenty twelve. As post pandemic savings ran out, credit card debt started piling up. Wow. That is kind of dangerous, actually. Perhaps Gen Z. They are you know, they're really into these credit cards, but they have the least life experience, obviously, of all of these, you know, of millennials Gen Z and the ones above millennials. You know, Gen Z obviously has the least life experience. So perhaps they are the least good at dealing with debt. And maybe there's a reason that people in their early 20s typically haven't been really applying for as many credit cards because they're not as used to managing money. So I can definitely see a real problem with Amex's strategy. People, you know, getting into debt and stuff. If you get into debt on a credit card and remember these cards, these Amex cards, they used to be charge cards, but they're not anymore. OK, they are not. You can carry a balance on them. They don't have preset spending limits like a credit card would, but you can actually have a balance on the card. And there's a pay over time limit as well. It's kind of like it's a charge hard, but it has a credit limit within it. Right. That's normally lower than the overall charge limit. So Amex, they've been very smart about this because they figured out that they can make some money through interest payments. Used to be no one was paying interest on these cards. It's just through annual fees, swipe fees, et cetera. Late fees, maybe. But now they actually make money on interest payments, too, because some people are carrying balances on the Amex charge cards. And of course, Amex does a load of other credit cards, too. Amex wooed the youths. Or did the youths save Amex? Hard to tell. All I know is that I'm heading to the airport lounge. What a cheesy outro. OK, did Amex woo the youths or did the youths save Amex? I think it's a bit of both. It is sort of a very nice convergence of factors, right? Social media, obsession with travel, the kind of free advertising you get from social media to make something cool. They've probably studied Apple and Tesla and, you know, figured out how to create a sort of cult following. And people still remember that their cards are targeted. Well, they were targeted towards the high end of the market. So, you know, it still feels prestigious to have an Amex. Like I remember when I was younger and I saw someone on a plane paying with this card, right? A silver card, a little centurion on there. I was like, oh, wow, respect. You know, I guess she was paying because she has the airline credit for that airline, right? So she was, you know, getting reimbursed from Amex. But you whip that card out, the platinum. I mean, I know the centurion is the highest level, but the platinum still carries some some weight, some gravitas. Not as much as it used to, but it's still it's definitely still a status symbol. And I guess that's probably why a lot of Gen Zers are interested in it. But anyway, guys, leave your comments below. What do you think about all of this? I'd really like to hear what you think. Thank you so much for watching. And also, don't forget to lock in your three thousand dollar bonus only with Silo while it still lasts at silomarkets.com slash Ben. That will be the top link in the description box below. Please subscribe to the channel if you're new. We'll see you in the next video.