writetorich

Ok, So I have a AMEX BLUE with a 3.99 Life of Balance transfer balance.

It had NO transaction fee.

I owe about $20,000.

Minimum payment has been 2% of outstanding balance.

or about $400 a month.

Of course I have never used the card for a purchase.

I get this month's statement a few days ago.

On the envelope it says that "important information about your account is enclosed".

I read it.

There are some changes to Purchase protection which I did not pay careful attention to. After all I make no purchases on this particular Amex product. However me now thinks it will be all Amex cards.


Of more intrest to me is a potential change in minimum payment due.
the minimum payment on the PREEXSISING 20Kpossibly in doubling to 4%.
The ambiguity is disconserting. My language is same as in the Fat Wallet Link
http://www.fatwallet.com/forums/mess...ife+of+balance

Can I "opt Out" or decline the new terms , by cuting the card in half and send a letter certified mail that I wish to pay off the balance in accordance with the original terms?

I dug out the original card member agreement.

Page 3, middle collum entitled "Changing this agreement/ assigning this agreement", seems to give AX the Unilaterial right to change terms on preexsisting balances even without a default. The only restriction is "subject to appliciable State law".

sbm12

They didn't change the rate, just the minimum payment, right? I'm not sure that you have much of a leg to stand on in terms of keeping whatever you want, but I'm sure that AX would be happy for you to pay it off and walk away. They aren't making all that much on the 3.99% "loan" that they gave you. It doesn't seem that there is any reason you can't just pay it all off now or next month still at the 3.99% rate, as long as you make all the minimum payments in the mean time.

writetorich

well had I continued to use the card after the balance transfer and had a high intrest portion , would I have recieved this??

Of course this is a material change BTW.

I actually paid off a MBNA Merrill Lynch 1.9% and Citi 0% EARLY to take advantage of this Life of balance offer.

I'm not expecting to keep the account open AND deline the new terms.

The issue is what does the board think that would happen if I send such a letter?

writetorich

Agreed.
Absolutely.
But I did not go to them and ask for these terms.

They came to me and offered it to me.

They were hoping that:

1-I used the card in addition to do the balane transfer AND/OR

2-Paid late , triggering a "default" intrest rate. AND/OR

3-Bounced a check trggering a "default" rate. AND/OR

4-Exceeded my credit line. AND/OR

5-Paid another Creditor late.

Well I did not off the above five.

I would expect this from Citi, Chase or B of A, but not Amex.
It reeks of predatary lending.

mia

Yes. See, for example,...

http://flyertalk.com/forum/showthread.php?t=738801

I imagine this applies to all USA issued personal American Express credit cards.

aviators99

I think the thread title is misleading, since they are still charging you 3.99% interest.

corrad

wasn't the 4% minimum passed by the congress last year? Of course it didn't help that the credit card companies lobbied heavily for it.

Ex Amex Card

It's the lenders who offered the deals who caused the lending crisis, not the borrowers. writetorich made a good move by taking advantage of the generous offer. ^

CrazyOne

I've been hearing about changes in minimum payment calculations for the last year or so, got another notice from Chase recently too, but I haven't seen any actual changes in payments for some low rate life of balance amounts that I have. We'll see if any significant changes ever happen. I can deal if they do, but so far I've seen no indication this will apply to me.

edcli

I really don't see the big deal going from 2% to 4% min payments.
I think its for the bertter of society if min. payments go up.

This Mortal Coil

The borrowers are just as much to blame for not understanding what they are getting into. There is no such things as a free lunch with especially where credit is concerned.

writetorich

Except, I rarely carry any balance except for these promo offers.

writetorich

"EXSISTING 3.99%Life of Balance transfer. "Lifetime"just got a whole lot shorter! "

My thread title never implied nor explicitedly stated that the 3.99 was changing.

My thread title referred only to the length of of the "lifetime" of the length that there would a balance.

biggestbopper

The increase was done by the Fed which was worried that banks it regulates might not be able to collect on credit card debit due to the minimum payments being too low. The credit card companies strongly opposed the change as it would impact their interest income.

There is tons of info on this on the 'Net. Take a look, for example, at: http://www.bankrate.com/brm/news/debt/20050503a1.asp

In other words, Amex changed the minimum payment 'casue it had to.

motytrah

The change was pushed for by consumer groups, who are primary concerned with people who get stuck in revolving credit doors and end up paying 300-400% on their debts. From what I've read the whole push to 2% pays started when B paper credit card companies figured out they could make a lot more money long term by lowering minimums. So this is more or less a return to what cards were in the 80's and 90's.

Some people of means may get caught in the cross fire. You should be able to tell Amex you don't accept the terms change. They would then convert you from a revolving account to an installment account. Although in that case I don't know if that would help. You might end up with an even bigger monthly payment.