An office colleague told me that she received a letter from American Express offering her cash to close her account. I told her it must be a scam, but she was insistent. So this morning she shows me the letter.
In summary, it says if she logs onto the AMEX website and enters this code for her account, then the account is closed and they will mail her a $300 prepaid AMEX card.
I'm sort of stunned, but I think it represents a new low for a TARP-funded company.
Very odd. If she uses the account then Amex will be making a turn on merchant fees even if she pays no interest. If she doesn't use the account then Amex could cut her credit limit and thus limit the regulatory capital she causes them to hold.
That's awesome! Is it an account she was using or a dormant one? We have so many Amexes we got for signup bonuses and don't use it would be great to get paid to close them.
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My son R-O-C-K-S at The Office Bar in San Diego 11/30/2011!
AMEX wrote a letter to me about a month ago. The ATM limit which we had agreed on ($2,000) was reduced to $200. No problems with the account, which is paid on time every month. Just a way to raise cash by limiting cash advances. Of course, that makes the AMEX card pretty useless as a travel business card. Stay classy, AMEX!
I closed my AMEX account about 2 weeks ago because I didn't want to pay the annual fee after getting the 50K sign up bonus. Wish they would have given me $300.
well, the next obvious question is how large a balance?
Not sure and its probably rude to ask. Last time I saw the card, it looked like the "Blue Card". Maybe its specific to that program? It will be interesting to see how many other people post something similar.
I have an SPG Amex and a Plat Amex - neither one has offered me $$$. I value them still, though. But my frusterations as a customer and stockholder are escalating quickly!
Programs: Marriott rewards platinum, american express platinum, Hertz Gold 5*
Posts: 3,370
We called last fall to close our Plat account due to some service issue-hoping for a retention bonus. They offered no retention bonus, but $200 if we did close our account due to poor service.
Programs: UA 1K (EX-CON), SPG Gold, AA Lifetime Platinum, HHonors Diamond
Posts: 4,807
Quote:
Originally Posted by triehle
AMEX wrote a letter to me about a month ago. The ATM limit which we had agreed on ($2,000) was reduced to $200. No problems with the account, which is paid on time every month. Just a way to raise cash by limiting cash advances. Of course, that makes the AMEX card pretty useless as a travel business card. Stay classy, AMEX!
Programs: UA 1K (EX-CON), SPG Gold, AA Lifetime Platinum, HHonors Diamond
Posts: 4,807
Quote:
Originally Posted by Nicksta
An office colleague told me that she received a letter from American Express offering her cash to close her account. I told her it must be a scam, but she was insistent. So this morning she shows me the letter.
In summary, it says if she logs onto the AMEX website and enters this code for her account, then the account is closed and they will mail her a $300 prepaid AMEX card.
I'm sort of stunned, but I think it represents a new low for a TARP-funded company.
If everything is as you say it is, it's indeed an interesting situation. One possibility that it brings up is Amex has certain accounts that are either unprofitable on the face of them, or perhaps marginally so once bad debt risk is factored in. I've wondered about this myself from time to time.
Generally speaking, it's not at all unreasonable for some consumer-oriented programs to be unprofitable to the vendor for a certain subset of customers. As long as that population is small, and it's not prone to abuse, it can be perfectly fine as long as the overall program is profitable.
Here's an example of what might be a "worst-case" scenario for Amex for a customer that has a perfect payment history and an excellent credit record: a Starwood Amex cardholder that charges a large amount near the beginning of every billing cycle and pays in full on the due date. For that situation, Amex has to float the charges for about 7 weeks without collecting any interest. Also, unlike an MR-earning card, the Starwood card earns SPG points immediately upon the close of the statement. So, unlike MR, an SPG Amex 1) pays cash to an outside vendor immediately upon close of the statement (even before payment is made), 2) there's no breakage, 3) there's no chance that the cardmember will redeem for merchandise that costs less than the settlement costs to SPG, and 4) there's no float.
I could easily see that some SPG Amex accounts are not profitable to Amex, depending on some of the numbers that we don't know. And even if they are all at least marginally profitable, I can see how some with razor-thin margins may not actually be profitable once bad debt risk is taken into account. This being the case, it does not surprise me that Amex might want to bribe certain customers to close their account. I'd like very much a fly on the wall when these issues are discussed and decided upon internally.
Programs: United Gold,Marriott Gold,Hilton Gold,SPG Gold,Priority Club Platinum Ambassador
Posts: 1,786
Quote:
Originally Posted by bakoboy
I closed my AMEX account about 2 weeks ago because I didn't want to pay the annual fee after getting the 50K sign up bonus. Wish they would have given me $300.
Was that worth the Ding to your credit report for a hard pull?
