(Bloomberg) -- American Express Co. will begin offering checking accounts to consumers with its credit cards as the company seeks to broaden its appeal to younger generations.
The checking account will come with an annual percentage yield of 0.5% and a debit card that offers rewards tied to spending, AmEx said Tuesday in a statement. The country's largest banks typically offer interest rates of 0.01%.
“Our members want more banking products and services from us,” said Eva Reda, general manager of AmEx's consumer banking products. “And they want more from their checking account.”
AmEx has been focused on adding more millennial and Generation Z customers, and about 60% of new accounts it added last year came from those age cohorts. Younger customers like to use their debit cards for certain spending such as ride share services or cups of coffee and use the products as a substitute for cash, AmEx found in recent research.
Other banks have previously used AmEx's network for debit cards of their own, but AmEx unveiled its first-ever proprietary debit card just last year as part of a new digital checking account for small businesses. Since then, it's teased that consumer debit cards could one day come.
“Traditionally, people associated our products on the consumer side with travel,” Chief Financial Officer Jeff Campbell said in November. “We think we have brand permission to offer a broader set of lifestyle services.”
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