American Express (AXP) has pitched itself as the credit card for the snooty, but now plans to become just another commercial bank grubbing for deposits.

The reason: The company needs a long injection of cold cash as profits continue to fall.

Converting American Express and American Express Travel Related Services to bank holding companies will allow the credit card issuer to attract deposits and to tap financing from the Federal Reserve in the future.

In this respect, American Express follows Goldman Sachs (GS) and Morgan Stanley (MS) , which also recently became bank holding companies.

American Express filed its application with the Fed on November 5th, becoming the first credit card company to make the conversion. The action represents the continued reshaping of the financial-services industry, which has been slammed by the worst credit crunch in decades.

American Express says more of its customers are having trouble paying their bills on time, if at all. Profit declined 24% in the third quarter - the fourth quarter in a row of lower earnings. That's reduced the value of the company and made it harder to borrow money to cover daily operations.

In October, American Express laid off about 7,000 workers, or about 10% of its work force worldwide, and said it wouldn't meet analysts' earning estimates until the economy rebounded.

Write-offs in its credit card business are likely to increase in the fourth quarter and into next year.

In exchange for oversight by the Federal Reserve, American Express wants increased access to government-sponsored financial-assistance programs. That's a polite way of saying bailout, if the economy becomes moribund.

This raises a basic question: Why is American Express to big to fail?

There's no doubt that operating as a bank holding company will give American Express fresh cash and added flexibility.

But one wag asks, will its new deposit slips come in platinum, gold and black?

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