American Express Co is raising interest rates for over 1 million cardholders for the first time in more than five years, Bloomberg reported.

American Express told customers this month that their annual rates will rise an average of 2.5 percentage points to at least 12.99 per cent following a review last year, Bloomberg reported, citing people briefed on the move.

The company sent letters to its cardholders saying it is making adjustments after finding its rates were below those of rival cards held by borrowers "with similar credit profiles," Bloomberg reported, citing a copy of the letter.

The planned increases will affect a variety of variable-rate products, including some of its proprietary and co-brand credit cards, Bloomberg quoted an American Express spokeswoman as saying.

American Express could not be reached for a comment outside regular business hours.

Earlier this month, American Express said its earnings would suffer for two years after failing to renew deal with Costco Wholesale Corp. – Reuters