AMEX today reduced my Blue Card, Credit Line by $ 10,000 leaving available credit of $ 1,500.00 and a just two weeks ago cancelled my Gold Card in error. Is this a result of my asking to have the Gold Card annual fee reduced for the upcoming year? Is American Express getting tough even with their good customers?
The member since date means very little in determining if one is a good customer, FWIW.
I don't know what other details your credit report would reveal or what actually triggered the reduction in the credit available, but it definitely had nothing to do with you having been a cardholder for 20 years.
AMEX today reduced my Blue Card, Credit Line by $ 10,000 leaving available credit of $ 1,500.00 and a just two weeks ago cancelled my Gold Card in error. Is this a result of my asking to have the Gold Card annual fee reduced for the upcoming year? Is American Express getting tough even with their good customers?
There are other area's of customers profile that trump tenure when banks and credit card companies look at there customers. I often hear this tenure comment way too much from customers [i.e. "I have been with your company since 1975"] in my own industry, and though I value their loyalty sometimes that's not enough when they cost me more than they spend/provide or when they become a risky customer by paying late, or being belligerent, or continually asking for additional items for free or wanting more discount, and a host of other reasons when they spend $1 and ask for $5 worth of value but use the tenure comment when we push back. Over time that model leads to business ruin.
Not that this is your situation!
I myself have been with AMEX since '94 and check everyday expecting my CL to be reduced based on everyone else's comments here but it hasn't happened yet on either of my 40k HH or 44k SPG. MY Plat hasn't been given a hard CL either yet. When/If it does happen I'll probably feel the same way as you initially but I'll get over it because it's a sign of the times and I have had a very good relationship with Amex up until that point [if it ever happens].
I disagree on tenure. In particular Am ex touts member since date. If someone has a credit card open the company is making money plain and simple. If the customer was not paying the credit card company would close the accounts not reduce the credit line. What is disturbing is the United States Government has given these companies extremely cheap money to lend. Amex got permission to be a bank in the blink of eye and rules were waived. If the OP said he was not making his paments on time etc I could understand. Unfortnately this is what really is going on: The credit card markets are looking at any area of the country like Phoenix Arizona and peg it as decline in value home market and will look for any reason to lower credit lines. My credit line on one card is higher than yours combined and I also expect amex to chop it any day even though I pay in full every month and never ever late and have no home mortage on my primary residence just because I live in Arizona
Amex is in big trouble. They have no deposit base and their access to securitization of their credit card receivables has disappeared. They are in a vicious cycle of cutting customer credit lines, which reduces transaction volume from merchants, reducing their profits and capacity to absorb losses, which leads to further cuts in consumer credit limits, etc. Their travel business has got to be hurting also.
I disagree on tenure. In particular Am ex touts member since date.
That is a marketing thing. I do not believe it has anything to do with how credit is allocated; certainly no more than it does with every other credit provider, none of which focus on that as a marketing tool.
My experience has been that the only bank which gives heavy weight to longevity of their customer relationship has been Citi. They have not cut any lines for us, my wife has been a customer for like 25 years. Amex is almost on par with HSBC, in the lowest tier, "subprime issuer".
Amex cut the limits on my cards last week. Based on what I've heard, I'm not taking it personally. I've also been with them for a long time and always paid on time.
Is there any rhyme or reason that anyone knows of for the cuts?
Like, anything specific to avoid doing aside from the obvious being late or going over?
We have 10k on an Optima card that is a sort of an emergency fund that may need to get used in the next year - and it'd be a real pisser to lose it, especially if we need to use it.
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Our corporate card was recently cut from 90k to about 50k and we have never been late. An ounce of prevention I guess, although our corp is doing well.
We have 10k on an Optima card that is a sort of an emergency fund that may need to get used in the next year - and it'd be a real pisser to lose it, especially if we need to use it.
Credit cards are not the same thing as emergency funds. At least they shouldn't be.
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Quote:
Originally Posted by KNRG
We have 10k on an Optima card that is a sort of an emergency fund that may need to get used in the next year - and it'd be a real pisser to lose it, especially if we need to use it.
That's one thing that I think has changed as a result of the credit crisis, at least for me. I used to consider having an available credit line as my "emergency fund" that people often recommend that you have, to cover living expenses for 3-6 months should something happen at work, for example. But these days, one can't really rely on a credit line being available going forward, even if your personal credit situation is okay. The bank could be in trouble instead of you. Also, in the event of a major national issue, such as the current credit crisis, you may end up needed the money yourself for the same root cause that the banks are unwilling to lend it in large amounts. Going forward, I think it's going to be "cash is king" as far as emergency money goes.
Going forward, I think it's going to be "cash is king" as far as emergency money goes.
It always was. Folks who using credit for such situations are often ones who default, as by the time you get to needing the emergency money you're likely to be in a position where paying it back - with the overwhelming interest - is less likely to happen. That is a bad way to operate (either personally or from the CC providers' perspective) over a long term and when derivatives and other fun things start happening you find yourself in a situation where some folks made a lot of money and the rest of us are hosed.
I could be wrong and may be proven wrong in this thread, but are most of the credit lines being cut related to the PLUM card ? Would make sense to me if so, because of the Plum feature to carry a balance an extra month with no interest (in a time where AMEX can ill-afford to carry a substantial balance for an extra month), versus (say) SPG or HHONORS AMEX which are true credit cards...and will accrue interest for AMEX if one carries a balance.
Without doubt, the PLUM card is not suited to this economic environment.
I have four or more AMEX products - CENT, spg (one my name, on my spouse's), HHONORS, and so far none have been cut that I am aware.
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