American Express’ new strategy of buying portfolios of existing VISA and MasterCard accounts from a bank, and then converting those cards with American Express cards maybe flawed according to the February issue of CardTrak, released yesterday. VISA says it conducted a poll early this month that shows just 27% of Bank of Hawaii VISA cardholders are likely to keep and use their new American Express cards when they come in the mail. In late December, Bank of Hawaii agreed to sell its $226 million VISA card portfolio to American Express. VISA says the general reaction to the American Express-Bank of Hawaii deal among Hawaiians is negative, the most intensely negative group toward it are Bank of Hawaii credit cardholders themselves. VISA found that 69% of Bank of Hawaii cardholders think Bank of Hawaii is making a mistake by turning over their credit card accounts to AmEx. Even if AmEx can persuade all of Bank of Hawaii’s credit cardholders to accept and use an AmEx card, there is still a question as to whether or not the acquisition can be profitable. It is widely believed that American Express paid a very high premium to acquire the VISA card portfolio. The average amount paid by bank credit card issuers to acquire a credit card account last year was around $170. Considering the inflated premium that AmEx may have paid, the cost per credit card account for the Bank of Hawaii may be as high as $300 per account. Last July, American Express purchased a co-branded MasterCard portfolio from New Jersey-based Valley National Bank and began the conversion to AmEx cards this month. The Bank of Hawaii conversion is expected to begin this summer according to CardTrak ([www.cardtrak.com]).