American Express Membership Rewards - AMEX does not like me having so many accounts

I have like 6 accounts with them all with various reward programs like DL, SPG, HH. Have a few business accounts as well. Today I checked online and it said all charging abilities were suspended. I called and they wanted said my accounts were under review as they wanted more financial information regarding my ability to pay. I have always paid all my bills on time and never had an issues thus far. It looks like they want information from my tax filings.

I don't have a full-fledged business but since I work full-time and have the opportunity to charge business expenses I decided to open accounts. Recently I read somewhere that household income could include income of others in the same home, so that number tripled. Do you think this idea is illegal? I used this new income on my last application and I'm guessing that must have alerted them.

If they want proof that I have a business I won't be able to provide it so can I just close those accounts? Will they file any report with the agencies?

Unfortunately, i think what you are undergoing is a much feared and now widely infamous " AMEX FR". I hate to tell you but most of the time it ends up with 'ALL' the accounts being cancelled. You could jump through all the hoops they put or simply ask them to cancel all of them yourself. From general advice from here and Fatwallet ( there is a wealth of info on how to deal with this in their in their finance section) just close all the accounts and open then after 3-6 months (esp if your case is not water tight). I myself am afraid with 5 cards of the issues :( ... good luck with the whole FR thing.

I have like 6 accounts with them all with various reward programs like DL, SPG, HH. Have a few business accounts as well. Today I checked online and it said all charging abilities were suspended. I called and they wanted said my accounts were under review as they wanted more financial information regarding my ability to pay. I have always paid all my bills on time and never had an issues thus far. It looks like they want information from my tax filings.

I don't have a full-fledged business but since I work full-time and have the opportunity to charge business expenses I decided to open accounts. Recently I read somewhere that household income could include income of others in the same home, so that number tripled. Do you think this idea is illegal? I used this new income on my last application and I'm guessing that must have alerted them.

If they want proof that I have a business I won't be able to provide it so can I just close those accounts? Will they file any report with the agencies?


Since what year you have become an Amex cardmember?

Since what year you have become an Amex cardmember?

I think i opened my first account in late 2005, didn't use it much and cancelled. I started seriously using it in mid 2006.

I think i opened my first account in late 2005, didn't use it much and cancelled. I started seriously using it in mid 2006.

When you applied initially did you show a much lower income that what you are making right now? Your FR could of got triggered because your spending does not coinside with the income reported on an original application. I think you should be fine as long as you can prove that you are making enough to pay all your debts.

Are they asking for some documentation from you? Can you let us know what exactly? You might be just be able to pass it with a copy of your income tax report.

Do Citi and Chase also have such reviews?

just close all the accounts and open then after 3-6 months (esp if your case is not water tight). I myself am afraid with 5 cards of the issues :( ... good luck with the whole FR thing.

Is it possible to reopen all of them again? Once they flag a person I would think that they would make a note on that person's SSN and maintain it in their records.

I have a total of 7 accounts. At least 3-4 I had for about 10 years. I use most of them though except 2. It would be dramatic if they would freeze my accounts.

Compared to the others does AMEX get easily suspicious when making large purchases?

Do Citi and Chase also have such reviews?

I just got a new Chase card with a high limit even though I have a mortgage and several thousand outstanding on two different cards with them (at very low fixed interest until paid). In addition I have a few other open card accounts with them. I figured I was tapped out, but I went for it to get the $250 bonus for the Freedom Rewards card (see other thread), and it came in the mail yesterday. No sign of such a review. It seems that my good payment record over the years is proof enough of being a good risk. I could really do some damage to them with the amount of credit they've given me (not that I would, which is of course what they're banking on, I just find it a little surprising that I haven't yet reached a hard limit where they say "no more").

I work full-time and have the opportunity to charge business expenses I decided to open accounts. Recently I read somewhere that household income could include income of others in the same home

Using a separate Business account for reimburseable expenses is defensible, but of course if you used an invented business name on the applications it will not instill confidence.

People who live in the same structure are not necessarily part of your "household". If you included income of your spouse, domestic partner or blood relatives you should be fine, but if it includes income earned by "house mates" or similar you should expect to explain why you think they would pay your bills.

See here:

http://flyertalk.com/forum/showthread.php?t=444860
http://flyertalk.com/forum/showthread.php?t=673114
http://flyertalk.com/forum/showthread.php?t=322867

Do a search on "review" in the AmEx forum (where I guess this should really have originated).

Update: Just got a fax from them - looks like they want a 4506T for verification of my tax info. I just sent in 2006 so it won't be updated in IRS systems for some time plus 2005 return show a student's income. What would you do?

cry..

Update: Just got a fax from them - looks like they want a 4506T for verification of my tax info. I just sent in 2006 so it won't be updated in IRS systems for some time plus 2005 return show a student's income. What would you do?

This is a tough one. That is what I thought happened. I had a feeling you had much lower income when you applied for the card initially and now they want to make sure you are able to pay the bills. See if you can ask them to send your paycheck stubs? Maybe it will work. Or wait till May and submit 4506T for 2006 then.

Good Luck. You will need it.

i think i have only 5 days to respond, so i guess i have to close. will lose 1K of credit charges on spg. will they take back any points that have posted to spg/dl?

Compared to the others does AMEX get easily suspicious when making large purchases?

No, I don't think so. I have purchased furniture for me and customers and paid large amounts with the AMEX CC....some needed a call to confirm.

I just got a call from an "account manager" at AMEX asking about my experiences with AMEX. Strange they would even bother when I am under a review and have started to close my accounts.

One of my cards closed the day the review was placed, if I wait a few days can I expect the points to be sent to SPG?

I have been trying to close these accounts and while agents keep saying they will close many og them are still open. annoying the crap out of me.

I had my accounts under review back in 2005. I had DL PLT, SPG, Fidelity Gold, and Business Platinum. Between the 4 cards I generally charge around $100K/year for my business. Never been late, balances were always paid in full.

While under review they allowed me to pick 1 card that I could charge up to $1,000 on (how nice of them) :rolleyes:

They wanted bank statements and tax returns - I got so fed up trying to get them paperwork I told them to cancel all my cards.

The lady I spoke to didn't care and responded, "Consider it done" CLICK

Now Citi gets all my business and I will never consider American Express again.

Your FR could of got triggered because your spending does not coinside with the income reported on an original application. I think you should be fine as long as you can prove that you are making enough to pay all your debts.I wonder if this FR is based soley on the total LOC and spending on credit cards only and they don't consider spending on charge cards. I've had more in balances at one time between both types of cards than I could ever show as income for an entire year - but the balances are always paid in full.

I had my accounts under review back in 2005. I had DL PLT, SPG, Fidelity Gold, and Business Platinum. Between the 4 cards I generally charge around $100K/year for my business. Never been late, balances were always paid in full.

While under review they allowed me to pick 1 card that I could charge up to $1,000 on (how nice of them) :rolleyes:

They wanted bank statements and tax returns - I got so fed up trying to get them paperwork I told them to cancel all my cards.

The lady I spoke to didn't care and responded, "Consider it done" CLICK

Now Citi gets all my business and I will never consider American Express again.

For how long have you been a cardmember before they did FR?

I only have 3 accounts with Amex, but I have 7 credit cards total when you count Amex, Visa and MC. Hopefully this doesn't look bad on my credit report. I have an extremely high score right now (and always maintained it)but have heard that when you apply for a large purchase (i.e. car or mortgage) that it throws up a flag. I hardly ever carry a balance and simply rotate my cards for use depending on what kind of points or miles I want at the time. I try not to open/close too many...though I did close my Platinum Skymiles and changed to a Rewards Plus Gold (more benefits, same fee).

I suppose if you have perfect payment history, carry a low debt ratio and have no more than 10 or so cards, you're fine.....what's everyone's experience using multiple credit cards to reap the rewards?

Very lame. I just got hit with a financial review. 6 figure income and 5 accounts open. Sent them a W-2 and the IRS form 4506T. From what I've gathered it's basically a coin-flip whether they will retain me as an AMEX customer. Is that correct? Should I just cut my losses and cancel? I have no idea what triggered this. Using probably about 5% of total AMEX CL..... they are LAME!

Also, I have about 50,000 MR pts.... I was hoping to wait for a DL bonus offer (usually comes around Xmas) but I assume it would be wise to transfer them now.

Very lame. I just got hit with a financial review. 6 figure income and 5 accounts open. Sent them a W-2 and the IRS form 4506T. From what I've gathered it's basically a coin-flip whether they will retain me as an AMEX customer. Is that correct? Should I just cut my losses and cancel? I have no idea what triggered this. Using probably about 5% of total AMEX CL..... they are LAME!

Also, I have about 50,000 MR pts.... I was hoping to wait for a DL bonus offer (usually comes around Xmas) but I assume it would be wise to transfer them now.

I am trying to figure out myself what triggers their financial review. Can you answer some questions for me?
1. For how long have you been a card member?
2. When you initially got an Amex card was it a charge or a credit card?
3. Was your income significantly different from now?
4. What type of Amex cards you have now?
5. Have you opened any new Amex accounts in a past year?

Thanks

Also, if anybody else who are in a process or have been under Amex FR also answer those questions it might help us to more understand what triggers it.

I'm wondering if these FRs are triggered by "churners." And I'm not using the correct word here. There's actually a term in the industry for people who open up cards, reap all the benefits, and then pay off their accounts in full.

Think about it. If you are charging $100,000 to your American Express card each month, and paying off the balance, you are causing them to actually lose money on the 20 day float given the current prime rate is 8.25%. The merchant fee of 2% doesn't cover their loss. I'm sure it galls them to no end to have you use their services, pay a minimal annual fee (and $395-400 is minimal when we're talking charging over $1m a year), never paying finance charges, and then reaping all the MRs/SkyMiles, etc.

So I'll bet that they use the FR as a way to weed out these people. Some people will be weeded out just by the hassle of having to show W-2s and pay statements and others will be weeded out by the fact that they are truly a credit risk to make x amount of dollars and have an astounding credit limit. Either way, if AMEX scares you away, they win.

You'd think that AMEX would be happy with customers who have reasonable credit limits and pay off their balance every month. In reality they like the folks who pay off 10 or 25% of their balances along with a nice finance charge. And an annual fee.

I am trying to figure out myself what triggers their financial review. Can you answer some questions for me?
1. For how long have you been a card member?
2. When you initially got an Amex card was it a charge or a credit card?
3. Was your income significantly different from now?
4. What type of Amex cards you have now?
5. Have you opened any new Amex accounts in a past year?

Thanks

Also, if anybody else who are in a process or have been under Amex FR also answer those questions it might help us to more understand what triggers it.

1. Since '04
2. Plat Charge Card
3. Different - significantly more
4. Plat, DL Plat, Spg, and 2 Business accts
5. Yes - I think this may be the reason. As was stated in the post after yours I am not exactly a churner (someone who opens an account, reaps opening bonus, closes, waits 3 months, reopens, reaps opening bonus, etc.) but I do maximize my bonuses and points and always pay my accounts off in full.

I think if they review my account they will notice I have never paid a finance charge ever. I am sure AMEX will be inclined to close my accounts just off this, even if I pass the FR - which I definitely should with my income (not bragging but my debt to income is low).

"Think about it. If you are charging $100,000 to your American Express card each month, and paying off the balance, you are causing them to actually lose money on the 20 day float given the current prime rate is 8.25%. The merchant fee of 2% doesn't cover their loss."


Your math is at fault here. If I charge $100k a month with a 2% merchant fee they gross $2000. If I pay on time and run a 50 day float(assume I charge it all early in cycle and then bill closes and i have 20 days to pay) their cost for that money is about $100,000 times 5% (bank cost of funds rate) times 50 days out of a 365 day year, or $685. Net to AMEX is $2000-$685= $1315. I don't think they are suffering from people who pay their cards on time.

"Think about it. If you are charging $100,000 to your American Express card each month, and paying off the balance, you are causing them to actually lose money on the 20 day float given the current prime rate is 8.25%. The merchant fee of 2% doesn't cover their loss."


Your math is at fault here. If I charge $100k a month with a 2% merchant fee they gross $2000. If I pay on time and run a 50 day float(assume I charge it all early in cycle and then bill closes and i have 20 days to pay) their cost for that money is about $100,000 times 5% (bank cost of funds rate) times 50 days out of a 365 day year, or $685. Net to AMEX is $2000-$685= $1315. I don't think they are suffering from people who pay their cards on time.

That is why they have charge cards :) and revolving credit cards were just introduced about 15 years ago.

1. Since '04
2. Plat Charge Card
3. Different - significantly more
4. Plat, DL Plat, Spg, and 2 Business accts
5. Yes - I think this may be the reason. As was stated in the post after yours I am not exactly a churner (someone who opens an account, reaps opening bonus, closes, waits 3 months, reopens, reaps opening bonus, etc.) but I do maximize my bonuses and points and always pay my accounts off in full.

I think if they review my account they will notice I have never paid a finance charge ever. I am sure AMEX will be inclined to close my accounts just off this, even if I pass the FR - which I definitely should with my income (not bragging but my debt to income is low).

Thanks for your answers and GL with FR. Keep us posted.

I wish some more people would answer my questions. That way we might be able to make some conclusions.

Your math is at fault here. If I charge $100k a month with a 2% merchant fee they gross $2000. If I pay on time and run a 50 day float(assume I charge it all early in cycle and then bill closes and i have 20 days to pay) their cost for that money is about $100,000 times 5% (bank cost of funds rate) times 50 days out of a 365 day year, or $685. Net to AMEX is $2000-$685= $1315. I don't think they are suffering from people who pay their cards on time.
Nor do I.
In fact, if AmEx wanted fewer pay-in-full customers, they could get rid of their charge card products.

I'm wondering if these FRs are triggered by "churners." And I'm not using the correct word here. There's actually a term in the industry for people who open up cards, reap all the benefits, and then pay off their accounts in full.

Think about it. If you are charging $100,000 to your American Express card each month, and paying off the balance, you are causing them to actually lose money on the 20 day float given the current prime rate is 8.25%. The merchant fee of 2% doesn't cover their loss. I'm sure it galls them to no end to have you use their services, pay a minimal annual fee (and $395-400 is minimal when we're talking charging over $1m a year), never paying finance charges, and then reaping all the MRs/SkyMiles, etc.

So I'll bet that they use the FR as a way to weed out these people. Some people will be weeded out just by the hassle of having to show W-2s and pay statements and others will be weeded out by the fact that they are truly a credit risk to make x amount of dollars and have an astounding credit limit. Either way, if AMEX scares you away, they win.

You'd think that AMEX would be happy with customers who have reasonable credit limits and pay off their balance every month. In reality they like the folks who pay off 10 or 25% of their balances along with a nice finance charge. And an annual fee.

There are a couple misconceptions there...

First, I doubt Amex has short-term debt at 8%+ financing its credit card operations. I would imagine that over the 50+ years they've been in the credit card game, they have built up sizeable cash reserves which fund their expected drawdowns.

Secondly, even taking your hypo at 8.25%, that is annualized...whereas the 2% transaction fee (it's actually more like 2.3-2.6% most times) that Amex collects off each transaction is calculated monthly,. So, if you spend $100k per month, and utilize the full float period possible, Amex is essentially advancing you $100k for 50 days. That $100k figure will never get any bigger, because you have to pay the bill before your next statement drops, so you give them $100k and charge another $100k...it doesn't increase the amount of cash they are floating you.

So, in return for a $100k no interest float, they collect 2% of $100k on a monthly basis, which annualized would obviously be $24,000.00 at a minimum just in transaction fees. Plus, all of the charge cards have an annual fee. Even taking your 8.25% rate, Amex would still make roughly $18,000.00 minumum off someone who spends $100k/mo, after deducting their cost of capital, and that's not including the annual fee.

Trust me, Amex isn't going to let you cost them money on an ongoing basis. They've been in business for 150yrs for a reason...

My business accepts amex and I know for a fact that we pay a bit more than %2 (including monthly fixed fees). The interesting part is that it's not a set % either. Some amex rewards cards hit us at a higher rate.

Plus, all of the charge cards have an annual fee. Even taking your 8.25% rate, Amex would still make roughly $18,000.00 minumum off someone who spends $100k/mo, after deducting their cost of capital, and that's not including the annual fee.

Ah, but the customer pocketed at least 1,000,000 SkyMiles/MRs/etc, (and more if they were able to take advantage of double/triple rewards) in the process. AMEX doesn't get these for free. Honestly, I have no idea what AMEX pays for, say, SkyMiles, but it would be interesting to throw that number into your analysis.

Trust me, Amex isn't going to let you cost them money on an ongoing basis. They've been in business for 150yrs for a reason...

And that is why I suspect they may be doing FRs on customers with good credit ratings who pay their accounts off every month. I could be wrong.

Wow. This would kill me. I habitually throw $50k to $100K per month on my SPG and Gold Rewards cards. Pay it all off monthly as well. If they were to FR me and cancel me as a customer it would have a devastating effect on my business.

...doubt Amex has short-term debt at 8%+ financing its credit card operations. I would imagine that over the 50+ years they've been in the credit card game,

1. American Express is a publicly traded company, it is easy to estimate their cost of funds by looking at the interest rates on their bonds. For example I see an American Express unit recently issued notes in Australia at 6.75%

http://www.reuters.com/article/idUSSYD17654320070403

2. Even if American Express did not use borrowed money their cost of funds would not be zero, it would be equal to the opportunity cost of investing the funds elsewhere. (On the other hand American Express is also in the Traveler Cheque business, which means they hold substantial amounts of cash deposits on which they do not pay interest.)

3. These calculations assume that American Express pays the merchant on the transaction date and holds the balance until the cardholder pays, but in practice American Express is able to delay the remittance to the merchant which reduces their holding period.

And that is why I suspect they may be doing FRs on customers with good credit ratings who pay their accounts off every month. I could be wrong.

I completely disagree. AmEx has a large charge card business in which you are required to pay off your account every month.

However, the customer who pays their account off every month and charges high amounts may end up with a very high annual charge volume that AmEx may consider to be risky given the cardholder's annual income.

I completely disagree. AmEx has a large charge card business in which you are required to pay off your account every month.

It seems to be only people who hold multiple AMEX cards who are getting targeted for the FRs. I'm just trying to come up with some theories as to why. It could be based solely on their credit risk, but we don't know for sure. And, of course, AMEX won't divulge their criteria which is why we're speculating.

Very lame. I just got hit with a financial review. 6 figure income and 5 accounts open. Sent them a W-2 and the IRS form 4506T. From what I've gathered it's basically a coin-flip whether they will retain me as an AMEX customer. Is that correct? Should I just cut my losses and cancel? I have no idea what triggered this. Using probably about 5% of total AMEX CL..... they are LAME!

Also, I have about 50,000 MR pts.... I was hoping to wait for a DL bonus offer (usually comes around Xmas) but I assume it would be wise to transfer them now.

I would suggest closing shop, as from what I have heard once you give them the desired info, they will not inform you before they decide to close all your accounts. So to be on the safe side and avoid negative entries on your credit report like "A/c closed by lender" end it of now just like I did.

Yeh, I suppose that is the safest option. Is it likely they will cancel my accounts based on my income though? I dont carry a lot of debt, 6-figure income but I do have 5 accounts open - which seems to be the reason why they hit me w/ a FR.... it's just a hassle to eliminate 5 accounts that I have linked to various bill-pays.

Yeh, I suppose that is the safest option. Is it likely they will cancel my accounts based on my income though? I dont carry a lot of debt, 6-figure income but I do have 5 accounts open - which seems to be the reason why they hit me w/ a FR.... it's just a hassle to eliminate 5 accounts that I have linked to various bill-pays.

Yup, I think its worth it. I also have a low debt to income ratio and small credit lines in all my cards. When I talked to the agent her worry was that I might go on a spending binge and "disappear". I have been reading many threads on fatwallet and in many cases they asked only docs like bank statements, pay stubs etc. Whenever they asked for the 4506T accounts got closed as I think this source of evidence is highly credible and used for people they have high suspicions about. So might as well let them continue with their suspicions and avoid the risk of "a/c closed by lender"

I am not saying out of spite as I didn't use my cards much but as I am going to buy a house soon I absolutely don't want any negative info on my report. At least if they promised to offer a chance to close it ourselves or have them close it after submitting the requested docs, I might have relented.

Yeh, I suppose that is the safest option. Is it likely they will cancel my accounts based on my income though? I dont carry a lot of debt, 6-figure income but I do have 5 accounts open - which seems to be the reason why they hit me w/ a FR.... it's just a hassle to eliminate 5 accounts that I have linked to various bill-pays.

Also transfer your MR points ASAP.

I'd recommend following the advice you've seen here. It took me a while to learn, but closing out worked best for me.

Thanks for the advice everyone. That's what I'll do, cancel all of my accounts.

Thanks for the advice everyone. That's what I'll do, cancel all of my accounts.

If you need to open up another non-AMEX account, I'd do it before you cancel all your AMEX accounts. Your credit score might take a dip because your debt to credit percentage will increase. You want to keep that at 30% or less.

I'd consider canceling all of them except the one I've had the longest and/or the one that has the rewards you like best.

If you need to open up another non-AMEX account, I'd do it before you cancel all your AMEX accounts. Your credit score might take a dip because your debt to credit percentage will increase. You want to keep that at 30% or less.

I'd consider canceling all of them except the one I've had the longest and/or the one that has the rewards you like best.

Thanks this is what I did. I left my Platinum charge and DL Platinum open and closed everything else. No idea if this made a difference but got a confused call from the agent handling my FR wondering why I did this at 6:30PM. I explained, he understood, stated that my IRS transcripts just came in, and was going to review. Called back 15 minutes later and said everything looks good, you may resume using your cards. Oh well! Better safe than sorry I guess.

Thanks this is what I did. I left my Platinum charge and DL Platinum open and closed everything else. No idea if this made a difference but got a confused call from the agent handling my FR wondering why I did this at 6:30PM. I explained, he understood, stated that my IRS transcripts just came in, and was going to review. Called back 15 minutes later and said everything looks good, you may resume using your cards. Oh well! Better safe than sorry I guess.

I am very happy for you. As I have read on fatwallet not to many people pass it.

For how long have you been a cardmember before they did FR?

Been a member since 2001, and got FR in 2005.

I don't think AX's cost of funds to float people who pay in full each month is at 8.25% either. Methinks it's muuuuch lower.

Thanks this is what I did. I left my Platinum charge and DL Platinum open and closed everything else. No idea if this made a difference but got a confused call from the agent handling my FR wondering why I did this at 6:30PM. I explained, he understood, stated that my IRS transcripts just came in, and was going to review. Called back 15 minutes later and said everything looks good, you may resume using your cards. Oh well! Better safe than sorry I guess.

So now you can sign up again for the cards you closed! Who knows, maybe you'll even get an additional sign-up bonus or two. :p

on fatwallet not to many people pass it.

I think this tells us more about the demographics of Fatwallet (and Flyertalk) than it does about an American Express Financial Review. Until a few years ago credit card applications routinely requested bank, income, employment, home ownership, account references and other details. Most of this has been eliminated with the introduction of FICO scores and automated systems.

I do not understand why people panic when a lender asks to verify fundamental information about their ability to pay.

Yeah, on FW I regularly hear stories of "income jacking".

I think this tells us more about the demographics of Fatwallet (and Flyertalk) than it does about an American Express Financial Review. Until a few years ago credit card applications routinely requested bank, income, employment, home ownership, account references and other details. Most of this has been eliminated with the introduction of FICO scores and automated systems.

I do not understand why people panic when a lender asks to verify fundamental information about their ability to pay.

Mia,

I would agree with your assumption on a demografics of Fatwallet and Flyertalk.

Not to change this subject, but my Gold Rewards Plus account is shown canceled since yesterday with a $0.00 balance due even though I have about $10000 on it as of few days ago. All other 5 accounts do show up as active. Called twice to CS and was assured that my account is opened and in a good standing as of now. I was able to charge a small purchase on it today also, even though online still shows canceled.

This is weird!!

Hello,

I've been a member with American Express since 1987 and I would tend to agree with Mia. If you are going to panic over having an FR from any creditor, regardless of whether we're talking about charge cards, credit cards or what have you, you ought to have the proof to back up the income you put down on your application form.

Eric

Hello,

I've been a member with American Express since 1987 and I would tend to agree with Mia. If you are going to panic over having an FR from any creditor, regardless of whether we're talking about charge cards, credit cards or what have you, you ought to have the proof to back up the income you put down on your application form.

Eric

I must have misunderstood because I thought folks were complaining that AMEX was giving FRs to people who hadn't lied about their income at all, but had opened up multiple cards. In other words, say my income is $100k and I am forthright about it on each application. That is sufficient income to open up an individual AMEX account with, say, a $25k credit limit.

However, since the customer had opened up multiple accounts using that same $100k salary, AMEX felt that their exposure was becoming too high. Because collectively their risk was now $100k+ ($25k credit limit x 4-6 cards).

What troubles me is not the fact that AMEX is doing FRs on folks, but that AMEX is reportedly suspending their accounts without notice and then forcing them or pestering them so that they voluntarily close some or all of their accounts. Closing 4 accounts with a credit limit of $15-25k could really hurt your debt to credit ratio and lower your FICO score. And that could be a big deal if you're looking to buy a house, etc.

...$100k salary, AMEX felt that their exposure was becoming too high. Because collectively their risk was now $100k+ ($25k credit limit x 4-6 cards).

In my experience the first credit card would have a $25,000 limit, but successive ones would be lower and the cardholder can reallocate as desired. Still, the aggregate limit does creep up. Into this mix put a charge card or two with unspecified limits, plus parallel activity that Amex may see on credit bureau reports from other issuers.

I must have misunderstood because I thought folks were complaining that AMEX was giving FRs to people who hadn't lied about their income at all, but had opened up multiple cards. In other words, say my income is $100k and I am forthright about it on each application. That is sufficient income to open up an individual AMEX account with, say, a $25k credit limit.

However, since the customer had opened up multiple accounts using that same $100k salary, AMEX felt that their exposure was becoming too high. Because collectively their risk was now $100k+ ($25k credit limit x 4-6 cards).

What troubles me is not the fact that AMEX is doing FRs on folks, but that AMEX is reportedly suspending their accounts without notice and then forcing them or pestering them so that they voluntarily close some or all of their accounts. Closing 4 accounts with a credit limit of $15-25k could really hurt your debt to credit ratio and lower your FICO score. And that could be a big deal if you're looking to buy a house, etc.

Yes, this is the point. As I stated earlier I have 6 figure income, never lied on credit app - my income actually went up from what I originally applied with. I believe I was targeted because of 5 open accounts. Reduced myself to 2 voluntarily during FR and survived unscathed...

In my experience the first credit card would have a $25,000 limit, but successive ones would be lower and the cardholder can reallocate as desired. Still, the aggregate limit does creep up. Into this mix put a charge card or two with unspecified limits, plus parallel activity that Amex may see on credit bureau reports from other issuers.


Most of the time if it is the automated system it really does not care. I had 3-4 chase applications in a short span and they gave me the same credit line on all of them (i think it was true of amex also esp if they are different affinities), Untill one of the applications went to a credit analyst (another card of the same affinity) and then they asked me to re-allocate. i donot think the number of cards is also an issue ... i have had 4-5 cards with them for a while and on lowly graduate student income (only income that i reported not HHI). I think the issue is of spending, disproportionately to your income ( and w/ or w/o raking up debt).

And more than demographics it is the AOR (some BT thing) that they do is the difference between FT / FW

No problems to date with my AMEX accounts, but it might be because I keep the limits low on cards that I use only in limited circumstances (like the HHonors AMEX I use only at Hilton properties) or the ones I hold in reserve (or got just to get a sign-up bonus).

I've noticed that the card issuers, AMEX included, seem to like to start you off with $15K to $25K or higher limits, so I routinely call them and ask them to *lower* the limits on the new card. I've gotten some new CSRs that get confused and flustered by such a request (one even said she had never had such a request before and had to call her supervisor to find out what to do, and would I hold), but most understand and will comply.

There has only been one time that I called in to AMEX to raise my credit limit, and that was on my "usual" card when I realized my charging pattern had grown to the point that it was sometimes going over 30% of the limit on that card, and that was just a request to nudge it up a bit (about $5K) to keep me at <30%. Request was granted with no hassle.

Anyway, the point I wanted to make was that if you keep the limits low, the total number of cards you have doesn't seem to create as much of a concern with credit providers, at least in my experience.

http://creditboards.com/forums/index.php?showforum=2

go over to the creditboard to find out more than you can stand about AMEX and the F/R. Search under 'AMEX' and you'll get a bunch of threads on this.

Just as flyertalk is -the- source for travel info, creditboards has everything there is to know about credit. AMEX has been mucho discussed and cussed over there.

Not a lot of rational logic on the F/R, seems AMEX is mainly interested in pissing off clients by requiring IRS info(note that AMEX wants your permission to retrieve it from the IRS, -not- have -you- send the forms to them).

Not a lot of rational logic on the F/R, seems AMEX is mainly interested in pissing off clients by requiring IRS info(note that AMEX wants your permission to retrieve it from the IRS, -not- have -you- send the forms to them).

:rolleyes: American Express is interested only in verifying that cardholders, in particular young cardholders, have the means to repay their charges.

No problems to date with my AMEX accounts, but it might be because I keep the limits low on cards that I use only in limited circumstances (like the HHonors AMEX I use only at Hilton properties) or the ones I hold in reserve (or got just to get a sign-up bonus).

I've noticed that the card issuers, AMEX included, seem to like to start you off with $15K to $25K or higher limits, so I routinely call them and ask them to *lower* the limits on the new card. I've gotten some new CSRs that get confused and flustered by such a request (one even said she had never had such a request before and had to call her supervisor to find out what to do, and would I hold), but most understand and will comply.


Not a bad idea, though i would recommend moving it to a much used card rather than just lowering it as unused credit is a major determinant in your credit score.

I recieved an offer to increase my LOC 5,000 dollars a couple of years ago or send in my complete financials for a higher review. I sent them in confident they would raise the LOC but they declined. Every since then I have been concerned about my other 4 accounts. My charge card has been in place since 1983 and I recieved a rewards charge card last year with a 25 K limit.

I don't think FR is an automatic killer, but I was suprised that mine didn't raise the limit.

Numerous cards I have have large promotional balances. Do they allow you to continue to pay off these promotional balances monthly when they close accounts?

http://creditboards.com/forums/index.php?showforum=2

go over to the creditboard to find out more than you can stand about AMEX and the F/R. Search under 'AMEX' and you'll get a bunch of threads on this.

Just as flyertalk is -the- source for travel info, creditboards has everything there is to know about credit. AMEX has been mucho discussed and cussed over there.

Not a lot of rational logic on the F/R, seems AMEX is mainly interested in pissing off clients by requiring IRS info(note that AMEX wants your permission to retrieve it from the IRS, -not- have -you- send the forms to them).

Yes, from what I have seen at creditboards and fatwallet, there is no rhyme nor reason to who gets selected for F/R. There have been long-time cardholders and people who have had a card less than a month(!), heavy users and occasional users, people who inflated their HHI when applying and people who didn't, people who pay in full routinely and people who carry a balance, and every possible combination of the above. Some people have even gotten it twice.

While those who provide the 4506-T when AmEx asks for it, and have the income to support their credit lines, will generally come out OK, there's something wrong when a company simply freezes your accounts and THEN asks for documents. I would be infuriated if that happened to me. How about the person above who wrote his business would be devastated if his AmEx cards were frozen - even if he passes a F/R, the damage is done!

AmEx and any other CC issuer certainly has the right to make sure they are judicious when granting credit, but you don't freeze accounts first. I can't understand why AmEx jerks their customers around that way, when it would be so much more palatable to request the 4506-T and allow 30 days to receive it before taking adverse action.

Since there is clearly no way to predict when F/R will hit, it's wise to have multiple backup cards available. Who wants to be in Europe at the beginning of a 10-day trip and discover AmEx has frozen your account and wants a 4506-T in 5 days or else?

AmEx and any other CC issuer certainly has the right to make sure they are judicious when granting credit, but you don't freeze accounts first. I can't understand why AmEx jerks their customers around that way, when it would be so much more palatable to request the 4506-T and allow 30 days to receive it before taking adverse action.

I don't mean to stand up for Amex here, but to answer your question: one reason to do it the way they do is if they become suspicious that for whatever reason your credit situation doesn't substantiate your ability to repay charges up to your current credit limits, if they sent a request for a 4506-T and you were in the subset of those that really didn't have the ability to pay or had falsified your income, and planned to stiff them (or this is the likely outcome even if you don't plan it that way), this would give you advance notice to charge your accounts up to their limits since you might already know what the outcome of the F/R is going to be.

Thanks for the advice everyone. That's what I'll do, cancel all of my accounts.

This is not a troll.... but with all of the fear of FR's, plus the gall of Amex to fire their customers... what exactly are the advantages of Amex? Why would you jump through all these hoops just to be the customer?