Eric in IL

Singing the American Express Blues

AMEX was be seriously wounded. If Bernanke had not created specific liquidity for them in March, they would have gone the way of Lehman. I do think the brand is very impaired and this crisis shows that they have no real edge on MC or V. The AMEX name allowed them to charge high fees for a long time, but more and more vendors do not even accept AMEX anymore. Their Foreign Exchange fees are higher than all other major companies and they constantly nickel and dime customers. MC and V have caught them and have no credit exposure with respect to service, card benefits, acceptance, business use, etc. At a P/E of 13, AXP is expensive right now, and 17x forward... no way they grow 17% anytime soon.
That said, you really cannot be delinquent right now; but in the past companies were pretty good about forgiveness. AMEX could become like Sprint, where customers have such a sour taste from past experience that there is almost no way to incent customers to be loyal. Sprint may finally be turning the corner.. 10 Years later.
Look at the 10-Year chart for S, that could be what AMEX looks like.

Visa: Not Everywhere I Want to Be

One more thing... the comparison to MSFT is not really relevant. MSFT is running out of steam, they are still living off of prior gains, and have yet to prove that they can truly innovate. I have no idea how MSFT grows from here, esp in a more tech savvy world. People will have a credit/debit card from every company... but they will most likely have only one OS on their PC or mobile. I just don't see anyone threatening Visa's business model. And MSFT has a lot of trouble mobilizing to address threats.

Visa: Not Everywhere I Want to Be

Well, within a credit crunch, Visa has no unsecured credit card debt to worry about. The only one I prefer is MA. Discover still carries consumer balances; that is a huge risk if we do dip again. No matter what scenario takes place, other than every person on Earth paying their credit card balances, Visa/MasterCard are better positioned than Discover. The Visa Brand has tremendous value, way more than Discover. They also are better positioned with Debit... if people stick to a budget, spend on Debit as opposed to Credit, then Visa wins. Discover has virtually no Debit business.
That said, I am OK with DFS, but I really dislike AXP. I think V/MA have a more stable model.