American Express Membership Rewards - Amex cracking down now because of economy

Amex just declined a $600 transaction for me because I have a $34,000 balance due from last month. Now let me tell you, I REGULARLY charge $25-$45k per month, and pay my statement on time by the due date.

Well today I called them and the lady said "We want you to pay the full $34k today before your card will work again". She said "I know you haven't even gotten your statement in the mail, but we need you to pay before you can use your card." It's only freaking Oct 8th and my bill isn't OFFICIALLY due until Nov 6th! ...!

So now... after using Amex for my business for almost a year and a half now, ALL spending has to halt and it's going to screw me over. I told her my business depends on this, and that I can make a $9k payment TODAY if that will open up my credit, and she said she will call me back after seeing if she can get manager approval.

I asked her if this was for just me or if it was across the board with all customers and she said it was for all. They are trying to get their balances due down.

So yeah.... you hear about credit markets drying up? It's happening to me. I can't make payroll now and I'm worried that if Amex can't work with me here, I'm done.

Ethan

Amex just declined a $600 transaction for me because I have a $34,000 balance due from last month. Now let me tell you, I REGULARLY charge $25-$45k per month, and pay my statement on time by the due date.

Well today I called them and the lady said "We want you to pay the full $34k today before your card will work again". She said "I know you haven't even gotten your statement in the mail, but we need you to pay before you can use your card." It's only freaking Oct 8th and my bill isn't OFFICIALLY due until Nov 6th! ...!

So now... after using Amex for my business for almost a year and a half now, ALL spending has to halt and it's going to screw me over. I told her my business depends on this, and that I can make a $9k payment TODAY if that will open up my credit, and she said she will call me back after seeing if she can get manager approval.

I asked her if this was for just me or if it was across the board with all customers and she said it was for all. They are trying to get their balances due down.

So yeah.... you hear about credit markets drying up? It's happening to me. I can't make payroll now and I'm worried that if Amex can't work with me here, I'm done.

Ethan


Yes, I think that cc companies are going to get very stingy, AE in particular. But if you regularly charge that amount each month and pay in full I don't see what the issue is. Would escalate to a supervisor.

Yes, I think that cc companies are going to get very stingy, AE in particular. But if you regularly charge that amount each month and pay in full I don't see what the issue is. Would escalate to a supervisor.

Already done. Just waiting for the call back.

Are you using your AmEx to cover Payroll? Or are you saying that you need the $9K you have to cover payroll and that won't happen because you have to pay AmEx instead?

I'm just curious how you run a company without having sufficient access to actual money, not just credit, to be able to do things like make payroll on a regular basis, at least for an extra month. If you're running on that tight a budget it is hard for me to fault AmEx for not wanting to give you another $45K that you apparently are at significant risk of not covering the payment for.

Yes, I will have money to cover what I owe to people... but continuing to run the business is significantly at risk because I can't purchase the inventory that I need. When I can't purchase inventory then I don't make money. When I don't make money then I can't pay people... chain reaction.

But no, I don't rely on Amex directly to pay people. I do have cash coming in from sales for that.

Geez, you guys made me so paranoid that I just called Amex to check my limit.

The agent said that any charges I make will be approved.

I asked how much is "any."

She said up to mid-six figures.

I guess I'm OK then...

Yes, I will have money to cover what I owe to people... but continuing to run the business is significantly at risk because I can't purchase the inventory that I need.

Interesting post. But what's me getting angry :mad: is that you are always posting such stories about Amex.

You had the similar issue some months ago (just look at: www.flyertalk.com/forum/showthread.php?t=816762&highlight=ethanwa)

posted here to this forum. Now some months later the same story but just with another numbers and digits.

So I just think something is wrong about this story and not Amex:

+ Could be a a way of AMEX bashing because they haven't fulfilled any other (unrelated) issue ?
+ Maybe they have cutted your credit limit during these days ?
+ Or you just want to bash Amex.

I don't trust this story. Would be nice if you could tell us the reason for acting in such a manner or where the real fault is.

I am firmly convinced that Amex is a really great corporation, their security team is excellent and their calculation of limits is fair. @:-) Even varying the monthly spendings within a (reasonable) range is no problem for them, the monthly bills never have false transactions and service is fast and efficient.

So would be fine if you could tell as the story behind your posting. :confused:

Nonetheless, there have been numerous media stories in the past few weeks about Amex reviewing / reducing credit lines -- taking people with a $1,500 rope and knocking them down to $1,000, etc. -- so I have no trouble believing the OP's story.

I speak as another small businessperson with strong cash flow whose $70k bank credit line, which we are not now accessing anyway, is currently frozen and inaccessible -- meaning we have no safety net. That's not an Amex story, it's a small-business-is-screwed-by-this-climate story, but still.

We dropped our corporate Amex years ago as expensive and pointless, BTW.

So would be fine if you could tell as the story behind your posting. :confused:

I agree that there has to be more going on...ethanwa was denied the AMEX Centurion card a couple of months ago because he "did not meet the AMEX credit profile" for the card. So whether he is just angry because of that, or whether the current problem is related to the same credit profile issue, I don't know. And we won't know unless he comes forth with the missing information.

Interesting post. But what's me getting angry :mad: is that you are always posting such stories about Amex.

You had the similar issue some months ago (just look at: www.flyertalk.com/forum/showthread.php?t=816762&highlight=ethanwa)

posted here to this forum. Now some months later the same story but just with another numbers and digits.

So I just think something is wrong about this story and not Amex:

+ Could be a a way of AMEX bashing because they haven't fulfilled any other (unrelated) issue ?
+ Maybe they have cutted your credit limit during these days ?
+ Or you just want to bash Amex.

I don't trust this story. Would be nice if you could tell us the reason for acting in such a manner or where the real fault is.

I am firmly convinced that Amex is a really great corporation, their security team is excellent and their calculation of limits is fair. @:-) Even varying the monthly spendings within a (reasonable) range is no problem for them, the monthly bills never have false transactions and service is fast and efficient.

So would be fine if you could tell as the story behind your posting. :confused:

Do you work for Amex or something?

I am not really pissed at them, and I understand it's a business decision, I am just a little miffed because I have high limits and always pay on time. It's just the economy is making them lock down a bit. I do have a lot of debt out and my credit scores are mid 600's because of it (mind you that I have NOTHING bad on my credit reports) and that is why I got denied a Centurion and probably also why they are taking a harder look at me.

I am not against Amex in anyway. In fact, the credit they have given me has helped me get to where I am today. I just think it sucks that for someone who uses credit responsibly (with no bad faults or late payements) would get knocked so hard. Just a sign of the times I guess.

And there is no "missing information" here. I have NEVER had a bad thing happen to me with Amex in terms or payments, rewards, ANYTHING. They probably just think my credit profile is too high of a risk for the dollar amount that I spend per month.

Ethan

If anything, the drying up of the credit markets is going to seriously cut into the internet affiliate marketers who purchase tons of Google Ads on their credit cards and make a very small (percentage wise) return on investment. A lot of people doing that don't have access to the $25,000-50,000 per month that you need to make a reasonable profit for your effort.

Frankly, I am always a little confused by posts that complain about credit card restrictions when they are using it for their business. When one owns and runs a business they should have adequate working capital to fund their inventory purchases and other needs without relying on credit cards. It says to me, that the business is operating on too little capital to be healthy. I would also guess that AMEX understands this very well and watches the use of the amex card closely in these cases. I applaud this action.

Businesses that are operating at thin margins and using credit cards for their working capital are , in my opinion going to have a much greater failure rate than others. If the margins were not thin then the profit would have been greater and have provided the working capital that is required and the use of credit cards could be reduced. The risk is great and past payment is not a good indication of future payment in these situations. If amex has losses in this business area in the long run the rest of us users pay the bill.

Frankly, I am always a little confused by posts that complain about credit card restrictions when they are using it for their business. When one owns and runs a business they should have adequate working capital to fund their inventory purchases and other needs without relying on credit cards. It says to me, that the business is operating on too little capital to be healthy. I would also guess that AMEX understands this very well and watches the use of the amex card closely in these cases. I applaud this action.

Businesses that are operating at thin margins and using credit cards for their working capital are , in my opinion going to have a much greater failure rate than others. If the margins were not thin then the profit would have been greater and have provided the working capital that is required and the use of credit cards could be reduced. The risk is great and past payment is not a good indication of future payment in these situations. If amex has losses in this business area in the long run the rest of us users pay the bill.

I agree with what you say to a certain extent, however in many circumstances it would be foolish for a small business owner to NOT use a credit card and AMEX should know this. For example, if you need to purchase critical supplies to operate your business and your vendor accepts AMEX, why pay out of pocket in advance when you can simply charge it and pay at the end of the month? Aside from the float, you get convenience of payment and the points/cash back benefits.

At the same time, if losing your credit line is going to put you out of business immediately, it's understandable that AMEX would want to cut you off. If you rely on your credit to operate and don't have a cushion for even a few months, you're a high risk, especially in these times.

I do have a lot of debt out and my credit scores are mid 600's because of it (mind you that I have NOTHING bad on my credit reports) and that is why I got denied a Centurion and probably also why they are taking a harder look at me.

The OP has admitted he's overextended.

Amex is being prudent by reining him in.

End of story.

eathanwa - They're doing this to you because of the debt you're carrying on your other cards. If you pay down your other debt, your credit score will come out of the dumps, you will be a better risk for AmEx, and voila! problem solved!

It's not that difficult to figure out - I mean, you say you have lots of other credit card debt which makes your score low.

Frankly, I am always a little confused by posts that complain about credit card restrictions when they are using it for their business. When one owns and runs a business they should have adequate working capital to fund their inventory purchases and other needs without relying on credit cards. It says to me, that the business is operating on too little capital to be healthy. I would also guess that AMEX understands this very well and watches the use of the amex card closely in these cases. I applaud this action.

Businesses that are operating at thin margins and using credit cards for their working capital are , in my opinion going to have a much greater failure rate than others. If the margins were not thin then the profit would have been greater and have provided the working capital that is required and the use of credit cards could be reduced. The risk is great and past payment is not a good indication of future payment in these situations. If amex has losses in this business area in the long run the rest of us users pay the bill.

Most vendors/suppliers require a CC if you just start doing business with them. After a stable relationship, they extend terms to your company. Some vendors/suppliers only take CCs and do not extend terms to any company.

A business has to have some line of credit in order to have some stability and grow. Just relying on cash inflows and working capital cannot entirely work. IMO, most customers pay late if you give them terms. Whether it's 1 day or 30 days late, it affects you and how you pay your bills.

eathanwa - They're doing this to you because of the debt you're carrying on your other cards. If you pay down your other debt, your credit score will come out of the dumps, you will be a better risk for AmEx, and voila! problem solved!

It's not that difficult to figure out - I mean, you say you have lots of other credit card debt which makes your score low.

Correct. Not commenting on the wisdom of using the AmEx for all purchases - I routinely pay off my AmEx once a week just to keep utilization low - but if using credit cards in this manner is the only way to run the business and AmEx gives the OP a problem, what about the Visa mentioned in his/her signature? If the company won't stand beside someone who pays bills religiously in bad times as the OP states, the company doesn't deserve one's business at any time.

Further, I don't know when I've ever heard "my supplier will ONLY accept an AmEx" - there are rewards cards other than those issued by AmEx . . .

Besides, Citibank would probably still give the OP a new MC every few months . . .

Frankly, I am always a little confused by posts that complain about credit card restrictions when they are using it for their business. When one owns and runs a business they should have adequate working capital to fund their inventory purchases and other needs without relying on credit cards. It says to me, that the business is operating on too little capital to be healthy.

I am guessing you do not operate a business then.

Setting aside the fact that Amex wants us to do this, and in fact are pleading with us to put more epxenses on the card (I actually had a rep call me to "brain storm" what sort of expenses I could use amex to pay for), it makes good business sense to pay with Amex

If you do not monger points, your business gets 1% off. 1% off of $1M is $10K. I'd take that any day.
You extend the actual payment cycle to your company thereby saving interest
You're using "free" credit, which if you used a revolver would cost you at least Libor + 2 pts (assuming you can even get credit now)
Many services simply require CC payment (like Google Adwords)
Amex does give you nifty summaries
You get extra negotitation leverage if a deal goes wrong
You have all kinds of extended warranty plans etc.


The list goes on and on, and of course we all know why CCs are beneficial. The point is that amex is pushing us to think like this, and then we start organizing business processes around it. Of course then when a business process break down (such as a payment cycle), it is damaging to the business.

So, I am not saying that Amex was wrong in this instance. Or that amex shouldn't manage their risk. But to assume that because you purchase a service (Amex) and expect it to work as advertised (payment cycle), certainly doesn't mean your business is poorly run.

I do of course also suggest getting both alternate credit cards and alternate means of funding. And in my business we pay donw the card before even the statement date, to the extent possible. However, I get the impression from Amex that this is NOT what they want me to do.

OK, rant over.

If you can't make payroll that's no AMEX fault.

Cash is king in this business environment.

While it is easy to find fault with the OP the reality is Amex is simply not a company that values its customers. It every measurable way, Amex puts it needs over that of its customers. Now, with people needing credit more than every, Amex is playing games and doing rather underhanded moves. It is interesting that none of the other banks are being bashed for deciding, for no real reason, that you must pay us today!

I have Amex and use it but it is certainly not the card I prefer or a company I trust.

While it is easy to find fault with the OP the reality is Amex is simply not a company that values its customers. It every measurable way, Amex puts it needs over that of its customers.

Well, yes, Amex *is* going to do whatever it can to not go under. I can't blame any company for trying to stay in business. Any company which puts it's all of its customers' needs over its own is probably not going to be around for too long. I want Amex to continue on. Haven't found other cards with benefits as good as the Amex ones.

Now, with people needing credit more than every, (sic)
Actually, I believe people need LESS credit now than ever. Handing out credit like candy's how this country got into this mess. I was always taught to "don't buy things you can't afford." This means that there's $1 in the bank for every $1 that goes on my credit cards. This DOES NOT mean that I'll spend $1 for every $1 I'll have in the bank when the statement hits.

Credit cards, Amex ones in particular, usually have terrible interest rates. It doesn't make sense to hold a balance on them, especially if you're a business. Get a proper line of credit or change your business strategies.


Amex is playing games and doing rather underhanded moves. It is interesting that none of the other banks are being bashed for deciding, for no real reason, that you must pay us today!

I've seen plenty of other posts elsewhere about other banks lowering limits mid-cycle (which is essentially what happened to the OP) on people for risky credit behavior. Given that the OP said their credit score was in the low 600's in his Centurion Denied thread, I'm not at all surprised that Amex would be weary of him, especially with Amex's new acquisitions having an average score of 750.

I don't think Amex is heavenly or can do no wrong, but in many of these messages and stories, the truth (when/if it's presented) tends to vindicate Amex every time. Take a look at the Amex is Mean thread (http://www.flyertalk.com/forum/showthread.php?t=873424). Read the MSNBC story on the 2nd or 3rd page then head over to the 4th page and read the PDF copy of the actual letter sent to the person mentioned in the MSNBC article. Given those conditions I wouldn't loan the guy money, nor would I expect Amex to.

Actually, I believe people need LESS credit now than ever. Handing out credit like candy's how this country got into this mess. I was always taught to "don't buy things you can't afford." This means that there's $1 in the bank for every $1 that goes on my credit cards. This DOES NOT mean that I'll spend $1 for every $1 I'll have in the bank when the statement hits.


I clearly have more outstanding credit than I have cash in the bank. Mortgages are a pretty good antithesis to the $1:$1 theory. That doesn't mean that people who borrow money to buy homes are fools, nor that the mortgage companies shouldn't loan money for those or other credit transactions. But there are certainly a large number of people and banks that overextended credit or borrowing and the large amount of default is hurting in many ways. And with that the banks are more carefully examining their balance sheets and making sure that the credit they have extended makes sense. In cases where there is a lot of other outstanding debt or even just credit extended it is not surprising to me that AmEx is reducing their exposure.

I don't think Amex is heavenly or can do no wrong, but in many of these messages and stories, the truth (when/if it's presented) tends to vindicate Amex every time. Your post indicates you probably don't run a business. You're applying conservative consumer-credit rules to the business environment, but they don't quite fit.

Consumers can theoretically survive without credit. Save for what you want and then buy it. Businesses, not so much. You have accounts receivable that rise and fall, flush periods followed by dry ones, etc. -- there's no such thing as a "regular paycheck" to bank on. But businesses do have regular obligations (payroll, inventory, taxes, rent, etc.) so a credit facility smooths out the times when receivables don't come in on the schedule required.

Using credit doesn't make the business irresponsible. Most small businesses literally could not keep going if they had to accumulate cash before meeting payroll, buying goods, etc.

Having said that, I think you'd be insane to stake your business on Amex as a sole or primary credit provider. They may not be "mean" but they sure can be arbitrary. A proper credit line that collateralizes receivables is best, not a high-interest credit card with a mystery access limit that can change at any time.

Your post indicates you probably don't run a business. You're applying conservative consumer-credit rules to the business environment, but they don't quite fit.

You're wrong in this environment, business manager have to be extra vigilant w/ their A/R. You have to be on top of your customer making sure they're paying their invoices. This is the absolute wrong time to be lax w/ credit rules.

AMEX is a business, they and other banking co's should have done this long ago! Most everyone abusing credit put us all in this fricking mess.

Are you using your AmEx to cover Payroll? Or are you saying that you need the $9K you have to cover payroll and that won't happen because you have to pay AmEx instead?

I'm just curious how you run a company without having sufficient access to actual money, not just credit, to be able to do things like make payroll on a regular basis, at least for an extra month. If you're running on that tight a budget it is hard for me to fault AmEx for not wanting to give you another $45K that you apparently are at significant risk of not covering the payment for.

Caustic and unnecessary. Geez! Point is that Amex has been really managing their "risk management" and customer relations quite poorly lately. Denying a $500 charge to someone with average bills, paid-on-time of 35-45K is petty. And unprofessional to do so without a courtesy call in advance given that they are making about $1,000 a month from his charges. Even a call center in India can afford that call.

You're wrong in this environment, business manager have to be extra vigilant w/ their A/R. You have to be on top of your customer making sure they're paying their invoices. This is the absolute wrong time to be lax w/ credit rules.

AMEX is a business, they and other banking co's should have done this long ago! Most everyone abusing credit put us all in this fricking mess.

Point taken-in part. Problem here is that Amex is not managing risk IMHO very well. The problem is that all of the evaluation that is happening is done by a COMPUTER and not by a human being. Basic numbers tell the story. 5% defaults but they're reducing/curtailing credit on 50% of their cardholders?? hmmm...

At the end of the day they may be more profitable in the longer term. But they will have burnt a lot of bridges on the way...

Denying a $500 charge to someone with average bills, paid-on-time of 35-45K is petty.

With all due respect, you are making an argument based on something that a total stranger has told you.

None of us know the mitigating circumstances, so we should refrain from labeling Amex's actions "petty."

In my experience, Amex can be a real PITA to deal with, but if you treat them fair, they'll treat you fair.

With all due respect, you are making an argument based on something that a total stranger has told you.

None of us know the mitigating circumstances, so we should refrain from labeling Amex's actions "petty."

In my experience, Amex can be a real PITA to deal with, but if you treat them fair, they'll treat you fair.

Look, I have more respect than any other credit card company. But I feel I was treated unfairly in this one case. Like other posters have said, they could have called and at least talked to me about the situation before cutting my credit. I just feel there are a million ways this could have been handled better by them. Maybe even saying "You have 10 days of charging left, we're just giving you a warning so you can prepare your business accordingly" would have been better than nothing.

Oh by the way, I never got a call back from Amex. Calling them again tomorrow morning.

Ethan

You're wrong in this environment, business manager have to be extra vigilant w/ their A/R. You have to be on top of your customer making sure they're paying their invoices. This is the absolute wrong time to be lax w/ credit rules. Spoken with the certitude of someone who's never had a big payment run 30 days late because of red tape or cash flow problems at the other end and had to make payroll in the meantime. Credit is a necessary tool. I just wouldn't depend sollely on Amex to provide it reliably.

Spoken with the certitude of someone who's never had a big payment run 30 days late because of red tape or cash flow problems at the other end and had to make payroll in the meantime. Credit is a necessary tool. I just wouldn't depend sollely on Amex to provide it reliably.

Granted credit is necessary for most ppl. But I hate excuses... especially when ppl owe me money. That's the worst. Sorry but there's something to be said about self sufficiency and running a tight ship. Sorry but some ppl hate debt -- that's another way to run a business.

The ppl (and co's) with cash are the one's who'll thrive in this economy.

Do you work for Amex or something?
Ethan

Just would like to answer your question: I have no relationship as an employee to the Amex Corporation (or any of its subsidiaries).

I am customer of the corporation and think they are doing a very good job as far as I could see it and as far as I had not to make any complaint about them. :-:

And I am firmly convinced that they will be a good corporation when all this actual developments on stock markets and the economy have gone by and they can concentrate on the further developments.

And I think that Amex does really make a lot of money due to the fact that they have invented the "couloured" credit cards and charge good fees compared with some of their competitors (especially Visa). (Disclaimer: This is an opinion only and no hint or advice about trading their stocks).

So i just wanted just to get a bit light into the dark not wanting to disturb anyone.

Look, I have more respect than any other credit card company. But I feel I was treated unfairly in this one case. Like other posters have said, they could have called and at least talked to me about the situation before cutting my credit. I just feel there are a million ways this could have been handled better by them. Maybe even saying "You have 10 days of charging left, we're just giving you a warning so you can prepare your business accordingly" would have been better than nothing.

Oh by the way, I never got a call back from Amex. Calling them again tomorrow morning.

Ethan

This will never happen. Because the people that are in dire need of funds will run right out and use up the entire line before it gets shut down. That defeats the purpose. AMEX is trying to mitigate potential risk and therefore will not "warn" you that you pose a risk to them.


It's just the economy is making them lock down a bit. I do have a lot of debt out and my credit scores are mid 600's because of it (mind you that I have NOTHING bad on my credit reports) and that is why I got denied a Centurion and probably also why they are taking a harder look at me.

Ethan

Frankly a score of mid-600's is not usually underwritten to a line of 35K or more. I'm in the card business and frankly anything under 700 is risky. Mid-600's is only a short click from 620 which is sub-prime. Can't say I blame them at all. They are being prudent in preventing risky dollars out the door.

This will never happen. Because the people that are in dire need of funds will run right out and use up the entire line before it gets shut down. That defeats the purpose. AMEX is trying to mitigate potential risk and therefore will not "warn" you that you pose a risk to them.



Frankly a score of mid-600's is not usually underwritten to a line of 35K or more. I'm in the card business and frankly anything under 700 is risky. Mid-600's is only a short click from 620 which is sub-prime. Can't say I blame them at all. They are being prudent in preventing risky dollars out the door.

I understand your comments. Read this person's story:

http://www.flyertalk.com/forum/showthread.php?t=873424

They set up a trip through PTS/FHR and while out of the country, they cut him off with no notice. He had other options to pay, but it should have been handled better by Amex.

I understand your comments. Read this person's story:

http://www.flyertalk.com/forum/showthread.php?t=873424

They set up a trip through PTS/FHR and while out of the country, they cut him off with no notice. He had other options to pay, but it should have been handled better by Amex.

I agree. Sounds like he is getting a run-around as well. This financial review, while I agree is prudent, really could back-fire on them if they continue to cut off too many of the right people.

Amex just declined a $600 transaction for me because I have a $34,000 balance due from last month. Now let me tell you, I REGULARLY charge $25-$45k per month, and pay my statement on time by the due date.

Well today I called them and the lady said "We want you to pay the full $34k today before your card will work again". She said "I know you haven't even gotten your statement in the mail, but we need you to pay before you can use your card." It's only freaking Oct 8th and my bill isn't OFFICIALLY due until Nov 6th! ...!

So now... after using Amex for my business for almost a year and a half now, ALL spending has to halt and it's going to screw me over. I told her my business depends on this, and that I can make a $9k payment TODAY if that will open up my credit, and she said she will call me back after seeing if she can get manager approval.

I asked her if this was for just me or if it was across the board with all customers and she said it was for all. They are trying to get their balances due down.

So yeah.... you hear about credit markets drying up? It's happening to me. I can't make payroll now and I'm worried that if Amex can't work with me here, I'm done.

Ethan

I charge 200K + / month and the same thing happened to me. She said, "Sir you need to bring that balance down." I was shocked...

I charge 200K + / month and the same thing happened to me. She said, "Sir you need to bring that balance down." I was shocked...

Do you always pay off the full $200K before each month's due date, or do you ever carry a balance?

Do you always pay off the full $200K before each month's due date, or do you ever carry a balance?

Even with $200K being paid off on time every month AmEx may have decided that $200K is too much exposure for that particular customer at this point.

Even with $200K being paid off on time every month AmEx may have decided that $200K is too much exposure for that particular customer at this point.

Perhaps...

What prompted my query was the agent telling the poster "you need to bring your balance down."

I'm not sure people who ALWAYS pay off their ENTIRE balance each month will be hassled by Amex.

Perhaps...

What prompted my query was the agent telling the poster "you need to bring your balance down."

I'm not sure people who ALWAYS pay off their ENTIRE balance each month will be hassled by Amex.

I think "bring the balance down" simply means they are lowering their exposure to this individual. You don't have to pay it off. In this case, any payment you make frees up credit for new purchases.

I think "bring the balance down" simply means they are lowering their exposure to this individual. You don't have to pay it off. In this case, any payment you make frees up credit for new purchases.

Amex has two distinct types of customers... Those who pay off their statement in full each month, and those who carry a balance.

I pay off a six-figure balance each month without fail and Amex doesn't bat an eye at my high limit.

But I'm quite sure that if I started carrying a balance, then Amex would lower my limit - and their exposure.

Amex has two distinct types of customers... Those who pay off their statement in full each month, and those who carry a balance.

I pay off a six-figure balance each month without fail and Amex doesn't bat an eye at my high limit.

But I'm quite sure that if I started carrying a balance, then Amex would lower my limit - and their exposure.

I understand. We have both regular Plat and a revolving JetBlue.

Plat must be paid off every month. However, everyone has spending guidelines on their Plat/Green etc. Let's say yours is $100k. If you hit $100k 15 days into the month, they might make you make a payment to reduce to under the $100k. I think the situation being described is where people are used to a $100k ceiling and suddenly its reduced to $75k for any one of many reasons discussed in endless threads. A payment must be sent in to keep using the card.

perhaps...

What prompted my query was the agent telling the poster "you need to bring your balance down."

i'm not sure people who always pay off their entire balance each month will be hassled by amex.


well this is my case i been card member for over 3 years and paid my balnce every monthy charge between 35k and 45k monthly never been late nevr carry balance not a single month and yesterday get a call from them they want to see my 3 las bank statement or mylast 2 years of irs reports send the 3 staements and within 12 hours they increase my limit to double

I agree that there has to be more going on...ethanwa was denied the AMEX Centurion card a couple of months ago because he "did not meet the AMEX credit profile" for the card. So whether he is just angry because of that, or whether the current problem is related to the same credit profile issue, I don't know. And we won't know unless he comes forth with the missing information.

I don't charge that much and I have been offered the Centurion card :confused:
I'll stick with my Plat. Thank you

My take on this thread:

1) EthanWA is a legit businessman and entrepreneur.
2) Many great business people have financed their start-ups using credit cards.
3) The most credit worthy and responsible business people probably never carry a balance.
4) AMEX applies tighter standards than ever to protect itself & is within its rights to initiate a FR. Sometimes they are wise to initiate the FR, sometimes they are not. Don't take it personally!
5) Going through a FR is annoying and inconvenient. It sometimes erodes brand loyalty. Perhaps, AMEX needs to train its CSRs to be more friendly and sensitive to customers going through the FRs. Perhaps AMEX needs to take other steps to help people understand the FR process and avoid surprises. However, AMEX also has a need to keep secret the formulas that trigger an FR.

6) If you own a small business and borrow from a bank, you provide the exact same info to the bank that is required in a FR.
7) A business person should not depend on a single source for credit.
8) It is very helpful to hear about FR experiences of others; so thanks for those of you who have shared them!

The apologists for Amex or other CC companies being arbitrary and unreasonable with longstanding customers.

The posts suggesting this is Amex's 'right' to curtail credit with little or no notice; well, duh. But the point is, to what extent do they value longstanding customers? Will their business being doing as well as it has in the past as they slowly burn through longstanding, loyal customers and alienate them?

By the way, it seems to me very likely that half or more of the Amex cheerleading crowd on this thread and this board, who regularly seem to chime in about things they know nothing about (like running a business and legitimate credit issues related to that), are Amex employees. I say that in part because of the total lack of response of those post to the relevant issues, and the very general comments 'but I love Amex and I think they've been great to me' type comments with minimal consideration of the points and situation raised by the poster. So readers of these threads should note that; it wouldn't be hard for Amex to tell a few folks to read and comment on these threads on a regular basis.

It seems to me that Amex is walking a thin line here.

Of course they want to reduce their exposure to defaults; that is understandable.

But if they cut a business' credit line too much, that could actually precipitate a business failure. And how will Amex get paid then if the business fails? They'll have to wait in line to get paid, which may or may not ever happen.

There's a "vicious circle" dynamic here that is very scary.

Also, of course it's a wise idea to have more than one line of credit and not be dependent on just one, but in the current economic climate, as has already been mentioned on this thread, one's "fallback" line might be reduced or closed with little or no notice.

Anyhow, best of luck to the OP and other businesspeople who are affected by this. Scary times indeed.

The apologists for Amex or other CC companies being arbitrary and unreasonable with longstanding customers.

Not sure which side of the fence I'm coming down on in your book. But I both run a business and like my amex card and the service I receive.

I also doubt that amex is being arbitrary. I'd stake a lot of money on their decisions being based on very sophisticated modeling. And even if they extended too much credit to somebody, and that could be seen as Amex' fault, they still should curtail the situation when they discover it. We can argue till we're blue in the face over whether they calculate risk right, but I bet they are better at it than me, simply because of the volume they process. Remember that the risk of somebody defaulting is different than a certainty. It doesn't mean you will, only that there is a chance you will. It is esitmated as a percentage, with confidence intervals. Right now Amex (and pretty much the entire Financial industry) is recalibrating their appetite for risk.

However, when cutting credit you will inevitably make people unhappy. So they would be wise to figure out a way to make the process more personable than the horror stories we sometimes see on here.

Just to update you all on this again... after paying a $10k payment, my credit line was opened back up. There was no discussion about this with Amex, I just paid and it happened. So good news for me at least for now.

Ethan

Thank God I have 4 Mastercards and a Visa if Amex tries to screw with me. (I alternate and use them for points---no I don't carry balances on them!) I have excellent credit and typically pay my balances off each month, but I've heard of them declining large purchases too on a whim. I have never had such a problem but with them diminishing their Plat. value-added services and taking the "we're the boss" approach, I won't be at their mercy.

I've been very pleased with Amex until recently. Their website allows you to make as many payments as you want, each day if you desire, and posts within 24 hours. Try that with Citi or Chase; their transaction timing is horrible. I've also had Amex handle all my disputes with no problem. If they continue to go down this road, they will lose many customers and it will be the customer that laughs when Amex is the next big financial company to go under.

Thank God I have 4 Mastercards and a Visa if Amex tries to screw with me. (I alternate and use them for points---no I don't carry balances on them!) I have excellent credit and typically pay my balances off each month, but I've heard of them declining large purchases too on a whim. I have never had such a problem but with them diminishing their Plat. value-added services and taking the "we're the boss" approach, I won't be at their mercy.

I've been very pleased with Amex until recently. Their website allows you to make as many payments as you want, each day if you desire, and posts within 24 hours. Try that with Citi or Chase; their transaction timing is horrible. I've also had Amex handle all my disputes with no problem. If they continue to go down this road, they will lose many customers and it will be the customer that laughs when Amex is the next big financial company to go under.

I agree. If you need a credit card always stay backed up with Visa or Mastercard.

I agree. If you need a credit card always stay backed up with Visa or Mastercard.

Ditto...I have 4 cards and all four are with different issuers.....Citi, Chase, Amex and Discover.

FYI -

It appears Amex is using spending patterns at specific stores as well as the mortgage lenders you use to determine what sort of limit you get...

http://online.wsj.com/article/SB122446082980748593.html

If ya can't make payroll and pay your Amex bill at the same time... I'd cut you off, too... probably faster than they did.

If ya can't make payroll and pay your Amex bill at the same time... I'd cut you off, too... probably faster than they did.

Yes, but then you'd never get to run a financial institution. If using Amex as a credit line to fund working capital, that is exactly what could happen.

You're the one who got denied for a Cent card, right?

If ya can't make payroll and pay your Amex bill at the same time... I'd cut you off, too... probably faster than they did.

I have to agree that seems like risky behavior even thought we don't know what the OP's complete story is.
I have had my AMEX platinum for about 3 years. My story is a bit strange I had never owned an AMEX product. I was considering the plat for the FHR when I got a call offering me a green card. Great I said but I really want a platinum. THe exact sequence of events escapes me but as I recall I applied for the green and within a few days I had the platinum.
Right away I started charging and there is absolutely no pattern to my spending. I might have a charge at the local hardware store and the next day be at an RC hotel somewhere. Early on I got a couple calls from AMEX just to check with me becuase my patern seemed strange, I actually like that they seem to be watching out for themselves and me. Once they caught that someone was trying to use my card for some online purchases and sent me a new card right away
I always pay my account in full on time and my last statement was my largest ever due to purchase of some equipment for our business. This was right in the middle of the financial crisis. Bill was paid ontime as always. I have never had anything but excellent service from AMEX. Never a hint of a review.
Right now everyone AMEX included has to watch their back;)

I had a similar thing happen- I use my card for business and the accounting department delayed paying less than 1% of my bill, due about 10 days ago, by 2 days. I got a quick call from AmEx even before the bill was due as the balance was very high, even though I have it fully paid each month.

Now my MR points haven't posted- I'd never bothered to see when they post, but how many days after a bill is paid in full do the MR points post?

Thanks.

I had a similar thing happen- I use my card for business and the accounting department delayed paying less than 1% of my bill, due about 10 days ago, by 2 days. I got a quick call from AmEx even before the bill was due as the balance was very high, even though I have it fully paid each month.

Now my MR points haven't posted- I'd never bothered to see when they post, but how many days after a bill is paid in full do the MR points post?

Thanks.

Points post after the closing of the next billing cycle.

Had a similair issue with AMEX.. had a great credit line which I wasnt using and the next thing I know they took most of it away.. nothing wrong with my credit or anything.. when I called, they said "You werent using it so we took it away to reduce our exposure" .. no other card of mine did that..

If ya can't make payroll and pay your Amex bill at the same time... I'd cut you off, too... probably faster than they did.

Funding working capital of a business with a credit card is an "innovative" concept indeed.... the OP is now experiencing that the Lord giveth and the Lord taketh ... ;)

But the point is, to what extent do they value longstanding customers? Will their business being doing as well as it has in the past as they slowly burn through longstanding, loyal customers and alienate them?

Perhaps we need to define "longstanding"? The examples I've seen seem to be cardholders who've only had accounts for a few years. Personally, I wouldn't characterize that as longstanding. Maybe I missed the other examples.

Funding working capital of a business with a credit card is an "innovative" concept indeed.... the OP is now experiencing that the Lord giveth and the Lord taketh ... ;)

As a European small business owner with credit extended in the US I can tell you that the US credit system has (for good or for bad) been a default small business lender for the past years. This is because the facilities are made more available than in Europe where things are more scrutinized on a consumer/small business level. In Europe, credit is extended after a meeting at a bank. In the US credit was extended over the phone. And businesses reacted accordingly. When I had my business based in Europe I had a very different view of the world...

Now, and there is no secret here, as a result of indiscriminate lending the entire credit system is in a state of collective paralysis. Imagine all of the small business people in the US depending on X availability vanishing tomorrow, no explanation, nada. Or even better, a lame letter from American Express listing 25 computer-generated reasons why they made the decision they did...

At the end of the day Americans will have a new relationship with credit. And this new relationship will have its ripple effects all over the world...not just on the US. Have you seen how much our beloved € is worth lately?

The way American Express in particular has responded to what it contributed to is terrible and is so typical of what is wrong with America in 2008. No personal interaction, no analysis- let the statistical models decide. Comically it mirrors the independent criticism of the US intelligence... too much computer-based information and too little real brain power.

For those of you that haven't faced the scrutiny... just be prepared for the call. American Express wants out of this business and won't tell ya' so... so before you preach put the hubris aside...it might happen to you. I have almost zero debt and was a blip on their screen... I would have said the same thing 2 months ago.

I am fortunate in that I have a good relationship with a smaller bank and my credit is with them. So the obnoxious hassles and demands of American Express lately have just sent me back to my bank and led me to push my business elsewhere... which is what I think American Express would like us all to do...

CAVEAT EMPTOR...

Geez, you guys made me so paranoid that I just called Amex to check my limit.

The agent said that any charges I make will be approved.

I asked how much is "any."

She said up to mid-six figures.

I guess I'm OK then...

And how does this assist the poster? Relevance?

Perhaps we need to define "longstanding"? The examples I've seen seem to be cardholders who've only had accounts for a few years. Personally, I wouldn't characterize that as longstanding. Maybe I missed the other examples.

I've been an AMEX customer for 8 yrs is that long standing in your opinion? Interesting thought though!! Hell, I know kids in their mid-20s that have 10k in the bank and they feel like Bill Gates (not joking)!!!!!!!

I've been an AMEX customer for 8 yrs is that long standing in your opinion? Interesting thought though!! Hell, I know kids in their mid-20s that have 10k in the bank and they feel like Bill Gates (not joking)!!!!!!!

No, because I'm going on 30+ years :D FWIW I haven't seen any recent changes in my credit limits, up or down.

I've had no problems with any CC company and AmEx still is AmEx to me. I may upgrade to Cent. simply because I want to get into Per Se more often, and AmEx owns two tables at Per Se for Cent members.

I think it has to do with how you use your credit, and the OP seems to be really extending himself. I feel bad, but you have to have a "safety net" and you also need to be responsible, and have something set up for "bad times". And adjust your investment strategy to match current economic problems.

So after being sort of scolded by AmEx ("you can't use your card anymore unless you pay this big balance 2 weeks before its due date", as told by phone by AmEx), I get an invitation in a fancy box to become a Centurion member- $2,500 annual fee?

Are they kidding me?

For me to shell out a $5k initiation fee and then $2,500 per year for a fancy credit card, I've got to have goodwill towards the issuer first!

I may upgrade to Cent. simply because I want to get into Per Se more often, and AmEx owns two tables at Per Se for Cent members.

Let me express a triple "HA-HA-HA" :D

Cent doesn't have ANY pull when it comes to dining reservations in NYC. If I weren't a regular at Boulud's places, I'd be severely disappointed with Amex not being able to get me in. Otherwise, I just email the maitre 'd.

Not according to the maître d' there. I asked her how to score reservations better, and then asked her if Centurion members had more pull and she said AmEx owns two tables at Per Se that we can only give to Cent. members. Either AmEx calls or a Cent. member calls to secure a reservation.

Just got off the phone with Cent. Nothing available for tomorrow and/or Monday.

Well, I don't think you're the only one with a Cent card but if you want to go there, just show up and tell them you'd like to have drinks at one of the couches. They'll be fine with that, and they'll bring you at least some truffle chips they make, or at best, a dish or two. I'm happy with the chips, pastry, and wine, though.

Even if I were a fan of Per Se, I'd feel rather weird just showing up in hopes of getting something-something just because of Cent.

In 2 years of being a Cent holder they were only able to get me into Le Bernardin on Friday at 5:30, rather last minute. Which was fine for us, because we don't like to eat late, but you'd see where this is the least popular time with the rest.

I didn't use my Cent card as I don't have one. When I had my birthday dinner there a few years back, I asked if you were allowed to come in just to have a drink and possibly a dish, and they said without a problem just war a coat. They do have a bar area there and nobody uses it/knows about it really, but they'll let you sit on the couches if you want. I go there whenever I'm in town and can't get a reservation (I just upgraded to Plat, was on Gold before).

You ever eat at San Pietro on 54th and Madison?

About 18 months ago, I got the starwood amex, but I didn't really use it much. Recently I've started using it a lot for work travel and am putting in the neighborhood of 10k a month on it. I know, that's chump change for the mpst of you. Well, my limit is only 2500. I pay it off in full every month, but stil, I don't like going over my limit like that. I called to get it raised, and I also submitted a request online. Both were denied based on "too many inquiries into my credit".

So instead I opened a new starwood amex card, also with a 2500 limit. Not sure they wouldn't just raise the line on my original card, but this will do in the meantime.

So after being sort of scolded by AmEx ("you can't use your card anymore unless you pay this big balance 2 weeks before its due date", as told by phone by AmEx), I get an invitation in a fancy box to become a Centurion member- $2,500 annual fee?

Are they kidding me?

For me to shell out a $5k initiation fee and then $2,500 per year for a fancy credit card, I've got to have goodwill towards the issuer first!

Me thinks its this bling lifestyle that is leading to all these thin margin/cash starved SMEs.

About 18 months ago, I got the starwood amex, but I didn't really use it much. Recently I've started using it a lot for work travel and am putting in the neighborhood of 10k a month on it. I know, that's chump change for the mpst of you. Well, my limit is only 2500. I pay it off in full every month, but stil, I don't like going over my limit like that. I called to get it raised, and I also submitted a request online. Both were denied based on "too many inquiries into my credit".

So instead I opened a new starwood amex card, also with a 2500 limit. Not sure they wouldn't just raise the line on my original card, but this will do in the meantime.


How do you put $10k on $2500 credit limit as easily as you mention? Are you sending payments in frequently? Are there no declines, over limit-fees, AMEX phone calls, etc in doing this?

I haven't seen any over limit fees or anything just yet. No calls to Amex either. I can clearly see online that I have my balance is whatever and that I have zero available credit. So far I haven't had any problems with it. I send it payments every two weeks or so to pay off whatever is on there. However, in between the receipt of the payment, there are times when my balance far exceeds my available credit.

However, in between the receipt of the payment, there are times when my balance far exceeds my available credit.

Amex let's you spend over the limit?

Apparently not only customers are feeling the pinch. (http://biz.yahoo.com/ap/081030/american_express_restructuring.html)

Apparently not only customers are feeling the pinch. (http://biz.yahoo.com/ap/081030/american_express_restructuring.html)

A 10% workforce reduction is quite a big pinch !

Got my AMEX letter of credit line decrease today. :(

I pay my bills on time. Never late. I've been a customer since college in the early 90's. I don't think this is deserved.

At least they didn't close it (yet).

:td:

Got my AMEX letter of credit line decrease today. :(

I pay my bills on time. Never late. I've been a customer since college in the early 90's. I don't think this is deserved.

At least they didn't close it (yet).

:td:

Do you have a balance? If so, and they lowered it to just above the balance you will probably see them "chase" the balance down as you make payments. This has been reported by several FTers.

If your balance was $0 or there is a wide gap between your balance and credit limit, your new limit will probably be stable for a while.

A 10% workforce reduction is quite a big pinch !

I agree, and it gives a glimpse into corporate decision making. Amex is recognizing that they have limited opportunity to increase revenue, so they are decreasing costs and reducing exposure to defaults.

Of course those of us who have our limits taken down will think it unfair, since they always paid on time. We probably never hear from the people who default on their cards, and amex is trying to reduce exposure before it happens.

Still will not feel good, and they should be aware of upsetting good customers.

As a European small business owner with credit extended in the US I can tell you that the US credit system has (for good or for bad) been a default small business lender for the past years. This is because the facilities are made more available than in Europe where things are more scrutinized on a consumer/small business level. In Europe, credit is extended after a meeting at a bank. In the US credit was extended over the phone. And businesses reacted accordingly. When I had my business based in Europe I had a very different view of the world...

Now, and there is no secret here, as a result of indiscriminate lending the entire credit system is in a state of collective paralysis. Imagine all of the small business people in the US depending on X availability vanishing tomorrow, no explanation, nada. Or even better, a lame letter from American Express listing 25 computer-generated reasons why they made the decision they did...

At the end of the day Americans will have a new relationship with credit. And this new relationship will have its ripple effects all over the world...not just on the US. Have you seen how much our beloved € is worth lately?

The way American Express in particular has responded to what it contributed to is terrible and is so typical of what is wrong with America in 2008. No personal interaction, no analysis- let the statistical models decide. Comically it mirrors the independent criticism of the US intelligence... too much computer-based information and too little real brain power.

For those of you that haven't faced the scrutiny... just be prepared for the call. American Express wants out of this business and won't tell ya' so... so before you preach put the hubris aside...it might happen to you. I have almost zero debt and was a blip on their screen... I would have said the same thing 2 months ago.

I am fortunate in that I have a good relationship with a smaller bank and my credit is with them. So the obnoxious hassles and demands of American Express lately have just sent me back to my bank and led me to push my business elsewhere... which is what I think American Express would like us all to do...

CAVEAT EMPTOR...
I actually prefer the computer making the decision. As a minority woman entrepreneur, I would NEVER get credit in Europe. I can hardly get a decent hotel room. I have offices there and have to put white males up front just to do business. Sad to say but the de-personalizing of services benefit non traditional business owners.

I actually prefer the computer making the decision. As a minority woman entrepreneur, I would NEVER get credit in Europe. I can hardly get a decent hotel room. I have offices there and have to put white males up front just to do business. Sad to say but the de-personalizing of services benefit non traditional business owners.

Sounds a bit harsh ?:confused:

Sounds a bit harsh ?:confused:

I can't believe that post was for real either....if it was someone clearly has a skewed perception :confused:

I am convinced this is just AMEX going back to their old business model of Charge cards only or Heavily favoring Charge Cards and punishing people who aren't paying credit cards in full. Haven;t they been taking a beating since starting the credit card dept?

Haven;t they been taking a beating since starting the credit card dept?

Any backup for this?

Any backup for this?
Nope, I only remember hearing it in passing, that's why I posed it as a question, not a statement. I will look for some online articles though.

Perhaps we need to define "longstanding"? The examples I've seen seem to be cardholders who've only had accounts for a few years. Personally, I wouldn't characterize that as longstanding. Maybe I missed the other examples.

Ok I will enter the fray. I have been a top shelf customer with amex since 1993. I have charged an average of 500K-800K a year for my business. Paying always on time with not many interactions with them. I use the SPG business and personal card as I still think they have the best programs point value wise. (Although it has been declining the past few years. A few years ago I had a big cust service problem that took me 10 phone calls and all sorts of trouble to get resolved. that did not impress me. In the end run they gave me $200.00 for my troubles. Recently I had another cust service problem with I was told had been resolved three times by reps. I got that resolved by going to the exec offices via phone call and they gave me something for my trouble yet again. They can clearly see I am pretty valued to them. Although when I call cust service normally I end up with Joe (from India, who could care less) In my business I would never send my best customers to talk with an out of the country rep, but thats just me.

Then I get a major cut on my SPG card. That was the last straw. I charge 40-60K a month on the card plus pay down part usually mid cycle. I pay part of the charges. Just a cash flow management thing. All of this documented. Now I go right back to my contact at AMEX who does not have the power to restore the line, however he promises to look into it for me and talk to the other dept. One week later full line restored. AMEX and others are usually software to manage their business. Unless you are a pest, you are going nowhere with them.

Normally I would not fight this hard over a CL but a 60K line helps my overall score and I dont like anyone taking it away from me whether I use it or not. The realities are their losses will be so great, they would rather cut all lines to reduce exposures.

Rob

Well I finally cut the cord today and severed my 28-year relationship with Amex. I pay them religiously on time. For years they've been making hefty merchant fees from my using my personal and small business gold cards for all my recurring billings, subscriptions, groceries, gas, all the everyday expenses that I pay in full every month. Lot of MR points earned that way.

Then I do have some balances on amex credit cards. They started cutting lines and chasing the balance down on me in August, but were fine with my regular spend on the charge cards. I moved about half my recurring billing to Visa or MC from other issuers but was going to keep some business with Amex while we all rode out this economy.

Not any more. This morning I discovered, the hard way, that they have cut off all spend on my 28-year Gold Card, even though last months charges were less than usual and the next payment is already scheduled. They don't want any more credit exposure to me at all.

Well I don't want any more exposure to them, either. Though they kept telling me they valued me as a customer, and that my small business cards were still good, I've had it. I spent about 2 hours today moving all my remaining recurring billings off any Amex, called them back, and closed all 6 cards I had with them.

They can just enjoy my slowly (but on time) paying off the 2.99% life of balance on my now-closed DL Amex, without any new merchant fees. They just lost about $1500 of regular monthly paid-in-full spend on merchant fees. Not a big spender but it is good money and was basically an "annuity" they had from me. Not any more. Given that CNBC reported last week that Amex is having to pay 18.9% themselves to borrow on 90-day paper in the market, they can enjoy the spread. :)

Of course my 20-something kids, who are embarking on their own independent financial lives, would have been lifelong Amex members having been started on Amex cards on my account for their college expenses. Instead, the next generation has now heard about how untrustworthy Amex is as a financial partner.

Yes, got all my MR points out last week!

Just received my Starwood business card today with only a 4800 limit.:( I had a Starwood personal card with a 30,000 credit limit that I cancelled in August to avoid the annual fee. I also have Hilton card with 30,000 limit. I have been charging around 10,000 per month and always pay it off. Credit score is 790.
Nothing has changed financially for me, same income and same amount of $ in the bank. I opened this card to get bonus for spending $15,000 in 6 months.
Called customer service to inquire about credit line and I was told I could apply for credit increase after 60 days. When I asked why 4800 limit when I had 30,000 before, representative said this was actually a decent limit :confused::, most new cards are only getting $1000-2000????
In order to get my 15,000 bonus points I will need to put at least 2500 per month on my card, which is more than half my credit limit. I am wondering if this will affect my credit score? I also have 2 other visa cards with 25,000 limits each, and a mastercard with 22,000 which I hardly use.
Could someone tell me does FICO look at how much credit you use based on all the cards you have, or each individual card.

I have 3 Amex cards, Delta, Starwood and Hilton... up until last month you could switch the credit lines between cards... now apparently it is no longer possible!

Very annoying since I use the Starwood card more than others...

Yeah, AMEX is changing, I have 2, they lowered both credit lines between $800-1000!, I have high credit lines in both!, may be they have problems!

Must be something new. A while back I transferred all but $1000 of my Blue credit line to my SPG card.

Yeah, AMEX is changing, I have 2, they lowered both credit lines between $800-1000!, I have high credit lines in both!, may be they have problems!


I think there must be somthing going on...

I had decent credit lines - $20K on both Starwood and Hilton... now they're at $3k each...

Always paid in full and on time... now i am left with a load of credit on the card I used the least (Delta) and they won't transfer them.

Plus, the customer service is apalling. The agent I spoke to was rude and "transferred" me to some pest-catching agency!

AMEX is trying to limit their credit exposure, regardless of your duration with them and payment history.

AMEX is at a disadvantage when compared to Visa and Mastercard in that they issue most of their cards through them, only a few go through banks.

When you issue a card through a bank, the delinquencies are the problem of the bank (i.e. Citi) not the issuer (i.e. Mastercard).

I think what we are seeing is the gradual phasing out of credit cards directly issued by AMEX, they may still have credit cards but only through banks (BOFA, Citi, etc...). Which, as an investor and AXP shareholder, makes sense to me and is something I'd like to see. I would also like to see them drop the pay over time feature on the charge cards, which is somewhat of an oxymoron.

I think AMEX went wrong, not by issuing credit cards, but by lowering their issuing standards. For a long time if you didn't have an exceptional credit score you weren't getting an AMEX card, now they, were at least, issuing cards to people with credit scores in the 500s.

It's a pain in the butt what they're doing and not fair to possibly the majority of cardholders, but given the current environment it's probably the smartest thing they could do.

That is awesome lol (amex lowering credit lines to 800-3000 ish etc).....so glad I cancelled my plat the day i found out about 241 stopping.

I would f-ing lose it on a CSR if i was given a limit of 1000 bucks (spend at least 10k/month, VC/MC's have 50-60k limits EACH)....Seriously, WteeF are they doing, there are a lot of people like me (saying I'm nothing special) who can sign their names for a million dollars tomorrow and it is a business and ego insult to drop credit lines like that.

BOA was happy to have my business back, and chase is giving 3% on your top 3 spend categories each month...3% will far outpace 241 at my spending level (ie, I will easily have 2000.00 cash back per year or roughly the equivalent of 4 domestic roundtrip tickets)

No reductions in either of my AMEX cards (Hilton and SPG), but I did receive a letter yesterday stating they're hiking the foreign transaction fee up by 2.7% (for a total of 5.7%) on my Hilton card (which I seldom use).

FWIW, I do not carry balances, and I use my SPG card chiefly at Costco.

If I cancel the card(s), will they purge my points from either my Hilton and/or SPG accounts?

If I cancel the card(s), will they purge my points from either my Hilton and/or SPG accounts?

No, once the points are at a partner, they're at the partner.

If you had regular Amex MR points, you would want to get them out before you close accounts. But for a partner affiliate card, Amex already bought points from HH and SPG and the points are with the hotels - they never were Amex points.

No reductions in either of my AMEX cards (Hilton and SPG), but I did receive a letter yesterday stating they're hiking the foreign transaction fee up by 2.7% (for a total of 5.7%) on my Hilton card (which I seldom use).

FWIW, I do not carry balances, and I use my SPG card chiefly at Costco.

If I cancel the card(s), will they purge my points from either my Hilton and/or SPG accounts?

I read this as a total of 2.7%, not 5.7% which would be insane. You may wish to reread.

To your last question, no, once the points are transferred to SPG or Hilton, those points are yours.

I read this as a total of 2.7%, not 5.7% which would be insane. You may wish to reread.

"in each instance increased by 2.7%" is what it says.


To your last question, no, once the points are transferred to SPG or Hilton, those points are yours.

Thank you (and MarkXS)

I really hate to do this, but as the OP of this thread, I want to say to all the FT'ers who didn't believe me about my original story and said "something must be missing from your story" a BIG "I told you so". Look at all of the people in the last few posts who are having credit limit drops and credit cut-off like I did.

I'm telling you, the economy is hitting Amex hard. But you've all figured that out by now.

The strange thing is that I have been expecting to have my credit cut back and it hasn't happened (yet).

I have the HHonors card with a $5000 limit and Blue with an $8000 limit.

I almost never use the Blue at all and doubt that I have ever put more than $25 on it in any particular month. HHonors is used most months, but generally for internet purchases of less than $50. In the months that I go to the States, I would put a maximum of perhaps $3000 on it -- and even that would be rare.

I do not work in the States, so they have no local employer of record for me. I do have a mailing address there, but it is c/o my mother. In other words, it seems that I would look like a bad credit risk to them.

Moreover, I have always paid my bills in full on the day that they come due, so Amex does not make a lot of money from me.

If they are cutting back the credit lines of much more valuable cardholders, why aren't they touching mine?

I read this as a total of 2.7%, not 5.7% which would be insane. You may wish to reread.

Just heard back from AMEX, it is indeed a TOTAL of 2.7%.

Thanks again for your help.

The strange thing is that I have been expecting to have my credit cut back and it hasn't happened (yet).

I have the HHonors card with a $5000 limit and Blue with an $8000 limit.

I almost never use the Blue at all and doubt that I have ever put more than $25 on it in any particular month. HHonors is used most months, but generally for internet purchases of less than $50. In the months that I go to the States, I would put a maximum of perhaps $3000 on it -- and even that would be rare.

I do not work in the States, so they have no local employer of record for me. I do have a mailing address there, but it is c/o my mother. In other words, it seems that I would look like a bad credit risk to them.

Moreover, I have always paid my bills in full on the day that they come due, so Amex does not make a lot of money from me.

If they are cutting back the credit lines of much more valuable cardholders, why aren't they touching mine?

I'm not sure there's an abundance of rhyme or reason right now.

I have a Hilton card, which is at a $10,000 limit. I think I carried a balance once in the many years I've had the card. I seldom use that card.

I also have an SPG card, with a limit of $13,000, never having carried a balance in the few years I've had it. I use this card every month for Costco and a sporadic travel expense, but pay it off every month.

Neither cards have seen a limit reduction, perhaps due to my credit score being in the 800s.

The stories about Amex in the news today are starting to explain the whole situation. Apparently what Amex has been doing is securitizing credit card debt and selling it on the open market, much as what was done with mortgages. That is, the money owed on an Amex credit card may actually be owed directly to a bondholder somewhere as part of a package of debt. The problem is that the market for such debt instruments has largely dried up, and what's left is demanding good credit bona fides for the debt that's in the instruments. So, Amex is only able to sell the debt of customers that they can convince third parties are a really good credit risk. For the rest of the customers, they have to actually come up with the money themselves to lend, which means that a) they're going to be much more careful who they lend money to, and b) money is scarce for them just like it is for other people. It's all making a lot more sense.

The stories about Amex in the news today are starting to explain the whole situation. Apparently what Amex has been doing is securitizing credit card debt and selling it on the open market, much as what was done with mortgages. That is, the money owed on an Amex credit card may actually be owed directly to a bondholder somewhere as part of a package of debt. The problem is that the market for such debt instruments has largely dried up, and what's left is demanding good credit bona fides for the debt that's in the instruments. So, Amex is only able to sell the debt of customers that they can convince third parties are a really good credit risk. For the rest of the customers, they have to actually come up with the money themselves to lend, which means that a) they're going to be much more careful who they lend money to, and b) money is scarce for them just like it is for other people. It's all making a lot more sense.

Do you have a source for this? It makes sense.

Do you have a source for this? It makes sense.

http://biz.yahoo.com/ap/081112/american_express_mover.html?.v=1

It would be nice if they would just say they need to change their business model instead of making customers feel like deadbeats and hanging people out to dry during travel etc.

The reasons they are saying they are reducing credit lines are creative to say the least. Some examples from this and other boards:

1) Current mortgage carrier
2) where you shop and what you buy
3) Have had a balance on your Amex card for more than a year. (I find this one specifically funny as they were offering balance transfers at good interest rates and now they penalize you for accepting their offer.)

http://biz.yahoo.com/ap/081112/american_express_mover.html?.v=1

Thanks

A downward spiral exactly as I predicted on July 28 on this very forum (see below). And so a little 'boo-ya' to those on the thread who kept saying how bright and responsible Amex was... or, as the self satisfied and smug would say, "hah!"

I've been fighting with Amex for many months on credit issues, and as I detailed at some length on another thread, was subjected to a very frustrating and painful 'financial review' over the summer that initially had my accounts frozen for two months, then canceled, and finally after an appeal successfully restored.

http://www.flyertalk.com/forum/showthread.php?t=849035&highlight=modestexpert

Now, even though I am paying in full each month and have a credit score over 700 with substantial, steady income, Amex has begun hacking away at my existing credit, taking it from $150k over the summer to about $100k in September, and now down to about $40k. While they say my accounts haven't been tagged for 'chasing the balance down' (and yes they said they do get clearly tagged that way), the effect is the same, with steadily dwindling Amex credit. While I was outraged over the summer about how unstable Amex had become, I have now fully adjusted to that and planned around what seemed to me a clear downward spiral that I wrote about in July and August on this forum in the above thread (and elsewhere too I believe).

Here is the problem for Amex; the people with high limits that they are bringing down dramatically, often by 80% to 90% reductions in their credit lines, are clearly their most active accounts, and thus by definition the accounts that generate the most fees. If you are a high spender and your cards are cut by 90%, that is so drastic as to make the cards useless and no longer worth the annual fees, so why not just close the accounts?

I scoff at the foolios on this board who have $50k or $100k in Amex credit but never use it, and claim Amex is fine and smart and stable b/c they haven't had THEIR credit reduced (on their largely irrelevant and financially non-performing accounts from a financial perspective). Amex's business is in running charges and collecting the fees, and somewhat in lending money; this is the bulk of their revenue. This simple chain explains the problem for Amex remaining viable, and why I predicted over the summer they would begin to lose money, and now are nearly at that point:

- customers with high limits but few charges are of little value to Amex in generating fees. Amex makes money mainly by charging fees to the merchant and lending money and charging fees related to that. When Amex slowly cancels out the credit of its best customers, the one's that do the most charges (I do about $500k a year, and again, ALL OF MY ACCOUNTS ARE FULLY CURRENT AND HAVEN'T HAD A SINGLE 30 DAYS LATE PAYMENT IN 7 YEARS on their accounts, or on any of my other 30 or so credit lines), they are cutting off their revenue stream. Can't those of you who defend Amex unto death realize this obvious fact and accept it? I currently utilize about 50% of my credit lines, and since the problems with Amex and with banks and lenders in general, I've reduced that from my maximum utilization last year of up to 90% knowing that the companies who lend are on eggshells.

How can I charge $500k a year even if I want to with Amex when they will soon have me down to a total limit on all accounts of $10k or $15k? With less than $50k in credit line, I can't charge $500k a year with their cards even if I want to. Without my charges, Amex loses $15k in fees from those charges, plus has me constantly sniping at merchants such as Coscto to PLEASE begin to accept other cards since Amex is unreliable.

- company owners, like myself, who used to take Amex (I no longer will accept Amex) but don't want to deal with Amex any more for this and other reasons, and stop taking Amex will further restrict Amex's ability to collect fees.

And so the spiral is created by Amex itself, cutting customers, angering merchants, restricting the eligible pool of chargers and chargees, and so on. This is all as I discussed in my lengthy thread over the summer.

I also would note that Amex was on the forefront of causing this consumer spiral, again detailed in my thread on this issue, and thus while there isn't much joy for anyone in this impending implosion, there is a little justice for their shortsightedness.

These were my comments from July 28 - three and a half months ago - , discussing the consumer credit tailspin that AMEX was actually at the forefront of creating at that exact point in time:

"I had my F/R, and in the end I won my individual battle. But what Amex is doing is NOT OK. They are actually damaging not just individuals (delete the 'just' - that should be enough to make them stop, reflect and revise), but also damaging the whole economy and escalating the spiral WHICH IN TURNS HURTS THEMSELVES EVEN MORE 3 or 6 months down the road.

The banks are running scared and acting crazy, and the average consumer is the one trying to stay the course and be reasonable. Isn't the conventional wisdom the opposite? Shouldn't the banks be moderate, predictable, stabilizing influences?

LOOK - it is ok for Amex to curtail credit b/c of the economy, individual circumstances, etc; BUT TO CURTAIL A CONSUMERS CREDIT BY 90% OR 100% ON SLIM OR NO JUSTIFICATION CAUSES AN OFTEN DEVASTATING TAILSPIN TO THAT CONSUMERS CREDIT, DAMMIT! It is NOT right, it is effectively like a run-on-the-bank at the micro-economic level of the individual consumer, and that is snowballing into adverse effects on the total economy. It is not in Amex's long term interest to have this kind of 180 degree reversal in credit terms - reduce credit 10%, 25%, maybe even 30% or 40%; but to have dramatic shifts of credit without compelling rationale is total bunk!

...I find this behavior on their part terribly irresponsible, and at this point they actually are contributing to our economic malaise.

...Amex is at the forefront of these cutbacks; everything we can do to make a stand here is not only for our own good individually and collectively, but also is good for a sound and stable economy as well."

Now come on - what about that prediction, 3 or 6 months down the road the crows coming home to roost? It is now 3 months and 2 weeks since the above post. Boo-ya!

ME :cool:

Modest Expert,

We may have to cut the Modest part out of your screen name. :D


No need to scoff at me then, since I have limits above $100K and typically go over that in a given month. And yes, I use the card partially to run a business.

Although each individual case is different, and your need to be recognized as being hurt by amex should not be written off, it is always hard to judge individual cases. My point in this and other threads, is that Amex is taking steps to reduce its exposure. This is wise. The way they go about it is by applying a model. Now, there are two things that can go wrong here: Their model may be faulty, and they can piss of cusotmers simply by they implement their model. Clearly they are rubbing a lot of people the wrong way, so I'm more than willing to say that they have not figured out implementation right.

However, for us to assume that their model is wrong, is a little presumptuous. It may be wrong in many instances. In fact it WILL - it's a model! The question is whether it on a large scale will reduce defaults, more than it will reduce fees. We simply do not know this. But I am willing to bet that amex knows a lot more about predicting defaults than we do. And I'm also willing to bet that it depends on a lot more than just length of customer relationship and paying on time. Credit scores are also not the best predictors, as you can be riddled with debt and have a high score, if you service your debt. Asssets to liabilities? Liquid net worth?

So I'm sorry they're giving you a hard time, and I would be seething if it happened to me. I would probably also try to switch to a different provider, if one would have me. (As it is I'm afraid to draw on my credit facility with the bank, because they might cancel it on me. How's that for irony.) I just don't know whether or not this means they are doing the wrong thing for the company as a whole. It would be very interesting to hear from a company official about how they manage risk at a high level, and how they deploy their models at a more detailed level. It may end up as a case study a few years from now. By then we may not care.

It's not a question of being hurt; I understand they are reeling.

But they are dealing with the fact they have a few people in seriously over their heads by cutting back on all (ok, let's say most) people who are doing large charge volumes.

My point is that this will thus necessarily go from bad to worse as far as their financials and future revenue and profitability; I believe that in the coming quarter they will begin losing money. They are ALREADY on the hook for folks who ran up charges they couldn't handle; they are NOW cutting off the people who can and do pay regularly b/c they are running scared over accumulated bad debt. Well, that doesn't work b/c those regular paying customers are the one's who provide the revenue that can at least offset the loses.

This is not theory or supposition on my part, just look at their plummeting financials and the degree to which they are cutting back their most active customers. A formerly active, high volume customer ceases to be just that when their credit lines are virtually eliminated, 'cause you gotta have a credit line to do charges. So what I'm saying is that Amex is acting like they are oblivious to the fact that you can't do high volumes of charges if you don't have credit line access!

There is always a fear of runs on the bank; Amex has come up with the genius strategy of doing a "run" on their highest volume customers.

p.s. just got off the phone with a banking rep who said that given the economy and their own situation, Amex is systematically cutting back accounts, and estimated that 90% or more of their accounts would have 'substantial reductions' in credit!

By thinking only about their short term exposure to risk rather than thinking long term about maintaining relationships with their best customers, AMEX is sealing their own doom.

I had an AMEX card with a substantial credit limit with the only charge being carried was a low interest balance transfer loan. But just in case in my semi-retirement I go back into a private small business, I kept the line open. Paid every month on time.

Now they have me chasing the balances. When the annual fee is due, I will cancel the card (although continuing payments on the balance transfer under the existing terms) and save the annual fee.

If I re-establish a small business, I will go to a community bank (where they continue lending) for any necessary credit. Or maybe even a non-profit credit union. ...better dealing with an institution that knows and appreciates its customers than a souless heartless behemoth like AMEX.:td:

Only the one's who DON'T do substantial charges have not have their credit limits reduced. I am assuming that at least in general, that is the pattern; charge high volumes, carry any debt on any cards anywhere, and Amex will freak.

Amex told me that my current reductions are due to the 50% utilization of credit that I have, and to the fact that I've had several inquiries for new credit lines over the last year. Again, 50% utilization for me is very low, my norm at this point in prior years given my business cycle has been about 80% or even 90%, but this year I've tried hard to reduce my percentage of utilization to help counter this credit profile issue.

Recently finished the dreaded FR. It wasn't so bad. Just told my accountant to send AMEX the requested info.

I am happy to report no reductions to my generous line of credit. :cool:

Some data points:

My AMEX usage fluctuates from $10K - $100K+ per month.
I've been a card holder for 15 years and never miss a payment or carry a balance.
My credit score is very good.

just be aware that Amex might yank your credit substantially at any time.

Fyi, the FR agents I spoke with insisted that lines of credit available are an entirely separate issue from the FR itself, which just seeks to determine 'reliability' and fundamental ability to pay (as they describe it to me).

One week after passing my FR, one of my corp credit lines was cut from 40k to $500.

Remember, if someone else loses their job it's a recession, if you lose your job, it's a depression!

I will not be surprised to see them exit the revolving business in the next 12 months.

Costco and Amex have an exclusive deal where Amex does not charge Costco the processing fees, in return for Costco not taking Visa or Mastercard. I do not expect this deal to go away since it benefits both parties.

Received a notice in my monthly Blue statement advising the new interest rate for Purchases including any existing balance, will change and now be prime + 6.99%. That's a 4% increase for me.

I called and asked if there were any options that would avoid the increase, including closing the account and declining to accept the new terms. The very kind and empathetic agent told me that this was being done to all card holders and there was no option to lock in the existing rate. :td:

Any sage advice on this, other than to close the account and do a balance transfer to another card product with another vendor?

By the way - I also was hit with a credit line reduction in June, from $35,000 to $18,200 and then, without making any new charges but timely payments, a further reduction to $14,400 in October. My Platinum Card went from an open line of credit to a spending limit of $34,400 in June as well.

I get these are tough times, and I don't necessarily mind having a little less open credit than I used to, but these ongoing reductions in credit lines and increases in interest rates when the prime is rock bottom, are absurd for those of us with good credit.

I dunno, I had Blue cut from 20K to 500.00 and I normally have about 250bucks a month on the card in some small auto pays which I then payoff automatically, basically using it for the points and as an emergency card while on travel.

But this.. I just requested an increase back to what I had, and if I get denied, then oh well, in the can the card goes. I mean, to go from 2.5% debt ratio on a credit line to 50%? Seriously? Umm.. how bout no more money for you Mr. AMEX.

And I have basically no revolving debt, a six figure income, and am working on paying off my home completely ASAP.

Very strange.

Regards,
-Bouncer-

I just requested an increase back to what I had, and if I get denied, then oh well, in the can the card goes.

Bouncer,

Let us know if your credit line increase will go through. I just received my SPG Amex card and they only gave me a credit line of $3,000 knowing that I usually charge significantly more each month. I wan to try to apply for a credit line increase, but was afraid that it my trigger a FR.

I have an Amex Hilton Honors card with a 17K credit line which I haven't used in years. Still open and available for use, I wonder if they'll just close it, wouldn't make a difference, really, but just curious.

I also had an ATT Universal Card ("charter member", remember those?) and I never used it, so the issuer (now Citibank) just closed it, which was fine too.

Washington Post Sunday 11/16/08 - Front Page, Business Section - confirms the reduction in limits by amex and other providers. Essentially they make it sound like it is targeted against people with high and under-utilized limits, arguing that the current economic could abruptly force people to draw on these lines without the ability to repay. They also confirm that local macro economic factors impact the decisions. Nothing we didn't already know here of course... :)

Bouncer,

Let us know if your credit line increase will go through. I just received my SPG Amex card and they only gave me a credit line of $3,000 knowing that I usually charge significantly more each month. I wan to try to apply for a credit line increase, but was afraid that it my trigger a FR.

Nope it did not. I'll close it tonight or tomorrow. Just need to arrange another card for the auto-pays. Once that is set up, blue is dead to me. Do you hear me?!?! Dead!!! :mad:

:p

Seriously, I don't much care, it was a minor convenience, that's all. I don't need the hassle and sooner or later they'll come crawling back. /shrug

Regards,
-Bouncer-

Well, if it is any second prize, I can't hear of a single CC company that isn't giving their customers the axe. I've had a card cut from $20k to $3k limit (with no adverse info on the cr). With my business revolving spend in the 5 digits every month, I wonder when that party will be over :(

The worst part of automatic credit line reduction is automatic FICO score reduction!

Nope it did not. I'll close it tonight or tomorrow. Just need to arrange another card for the auto-pays. Once that is set up, blue is dead to me. Do you hear me?!?! Dead!!! :mad:

:p

Seriously, I don't much care, it was a minor convenience, that's all. I don't need the hassle and sooner or later they'll come crawling back. /shrug

Regards,
-Bouncer-

I guess I will be having difficulties getting my spend to 15,000 on my new SPG card (3,000 credit limit) in order to get a bonus 15,000 spg points. :(

Bouncer,

Let us know if your credit line increase will go through. I just received my SPG Amex card and they only gave me a credit line of $3,000 knowing that I usually charge significantly more each month. I wan to try to apply for a credit line increase, but was afraid that it my trigger a FR.

Not sure if this has changed, but SOP with the SPG card used to be a small initial limit followed by a dramatic increase after about three months. My SPG credit limit is now 9x the initial credit limit; a friend had the same thing happen.

Not sure if this has changed, but SOP with the SPG card used to be a small initial limit followed by a dramatic increase after about three months. My SPG credit limit is now 9x the initial credit limit; a friend had the same thing happen.

I guess I will have to watch my spending on SPG Amex card for the first 3month. Is your experience with credit line increase on a personal or business SPG Amex?

I have 3 different AMEX products (Plat., SPG & HH) with the highest credit limit on the SPG card (since Plat. has not real limit). I pay off all of my cards at the end of each billing cycle and have very good credit with a high credit score. Suprisingly I got a letter from AMEX in yesterdays mail actually raising my HH credit limit! (I also just had Citi raise the credit limit on my AA card which I never use.) I had thought that they would be cutting everyones credit pretty soon based on all the comments in this thread and all the negative news about the econony, etc.

I have 3 different AMEX products (Plat., SPG & HH) with the highest credit limit on the SPG card (since Plat. has not real limit). I pay off all of my cards at the end of each billing cycle and have very good credit with a high credit score. Suprisingly I got a letter from AMEX in yesterdays mail actually raising my HH credit limit! (I also just had Citi raise the credit limit on my AA card which I never use.) I had thought that they would be cutting everyones credit pretty soon based on all the comments in this thread and all the negative news about the econony, etc.

Finally one positive post!!! Congrats christianj

My Blue apparently just got cut from $20,000 to $12,500. :(

I had not used my *Wood card in roughly 6-8 months, so I decided to start using it again, and did so last week. The very next day my CL was dropped from $20k to $500, imagine the odds of that. Guess I'll stop using it..... again. Go figure.

The very next day my CL was dropped from $20k to $500
You woke up the Mighty AmEx Computer!

You woke up the Mighty AmEx Computer!

Indeed... my most recent Blue decrease was immediately after I used the card for a $50 charge. They basically took it down to the remaining balance amount. 5 months of payments and no charges, no activity on the credit line, use the card for $50 and they cut over $4000 off my limit.

I've taken it out of my wallet. Why bother.

The worst part of automatic credit line reduction is automatic FICO score reduction!

I don't get it, how is this considered bad. how abt if you were to reduce the CL.

I don't get it, how is this considered bad. how abt if you were to reduce the CL.

It can have a negative effect on your debt to credit limit ratio.

I've had a huge amount of credit chopped off despite having all three cards, DL, SPG and HH for 3 years... never missing a payment and always paying in full.

HH went from $20k to $1k
*Wood went from $22k to $3k
Delta went from $33k to $1k

Hardly worth bothering with now - and they won't agree to combining the limits on a single card even though they used to no problem - and you could even do it yourself on the balance transfer section.

I'm fed up.

Anyone hit with a CL decrease who doesn't have a mortgage?

I had not used my *Wood card in roughly 6-8 months, so I decided to start using it again, and did so last week. The very next day my CL was dropped from $20k to $500, imagine the odds of that. Guess I'll stop using it..... again. Go figure.

WHAT?

AmEx - hell, any CC - gives a CL of $500??????????

Anyone hit with a CL decrease who doesn't have a mortgage?

I am thinking about compiling an Excel sheet for Flyertalk members to try to get better evidence of what's going on. All this anecdotal stuff isn't very helpful if we can't look at it objectively.

Your thoughts?

I am thinking about compiling an Excel sheet for Flyertalk members to try to get better evidence of what's going on. All this anecdotal stuff isn't very helpful if we can't look at it objectively.

Your thoughts?

That would be the logical thing to do - but it may be that FTers are a little wary of giving enough information about their personal finances to strangers on the Internet to allow useful conclusions to be drawn from the data. You would want to know salary, credit history and utilization, liabilities such as mortgage, home equity, auto, et cetera. Might be a little much.

Unless we make it anonymous and let everybody fill in their data, leaving it on a server somewhere. I'm not an IT guy, but I'm sure it's possible.

I am thinking about compiling an Excel sheet for Flyertalk members to try to get better evidence of what's going on. All this anecdotal stuff isn't very helpful if we can't look at it objectively.

Your thoughts?

I'm really not sure what the value of this exercise would be at all. What would be the point? Are you planning to march to the headquarters of Amex with your spreadsheet of data from 45 FTers who care about this and demand Amex modify their policies?

It might be interesting to understanding the specifics of peoples situations, but a the end of the day it really doesn't matter what Amex is doing to other folks, it really only matters what Amex is doing to YOU.

It's becoming pretty clear from a number of threads on this forum that Amex is likely under some pretty substantial challenges. I think the only real decision left for many folks is whether to remain a customer or not. But be clear, Amex controls the T&Cs of their cards and they can pretty much manage these accounts as the choose.

Regards

Agree with scubadu. This has little or anything to do with with what a customer is doing right now, and there is nothing a customer can do right now to prevent it. It has everything to what a customer did this year or last year.

The Amex program *thinks* you might default, so they are cutting you off to reduce their risk. They are basing the decision on your FICO score (guessing 720-750 or less makes you a target), your debt, and your debt to available credit ratio. An Experian Soft AR pull is what they're using to make the decision. It is a snapshot of your FICO score and how much you owe to everyone. Income doesn't matter. Assets, cash on hand doesn't matter. All they care about is how much you owe.

The adverse actions were prompted by the large number of people that have already defaulted (large losses) and Amex having their oxygen supply cut off in the form of the drying up of the commercial paper market (no new money to lend).

Whether you actually default is an entire matter altogether. If "what you owe" is a good indication of your overall risk profile is another matter altogether. I think Amex has a bunker mentality right now. They don't have time to figure it out case by case, so they're willing to accept the collateral damage of losing a few "good" customers with all the "risky" ones.

There's nothing you can do if you were impacted. Wait 6 months and ask to be reinstated. Pay everything you can off and get your FICO above 720-750 in the meantime.

Other FTers may care, and it may help them figure out if they should be getting other CC's now or changing things, before it hurts them based on objective data.

Personally, I don't care. My credit is in the 800s, I have a high salary, have no CC debt, no mortgage debt, only a car loan which will be paid in full at the end of the month (special financing deal) which has been open for 2 months.

I know AmEx isn't going to care. But other people may, and this thread has 12k+ views. At least we could give people (both in the market for a CC, or wanting to understand) a clear reason to their CLI decrease, or to show others why it wouldn't be a good idea to apply for an AmEx right now, based on stats similar to theirs.

I'm really not sure what the value of this exercise would be at all. What would be the point? Are you planning to march to the headquarters of Amex with your spreadsheet of data from 45 FTers who care about this and demand Amex modify their policies?

It might be interesting to understanding the specifics of peoples situations, but a the end of the day it really doesn't matter what Amex is doing to other folks, it really only matters what Amex is doing to YOU.

It's becoming pretty clear from a number of threads on this forum that Amex is likely under some pretty substantial challenges. I think the only real decision left for many folks is whether to remain a customer or not. But be clear, Amex controls the T&Cs of their cards and they can pretty much manage these accounts as the choose.

Regards

Other FTers may care, and it may help them figure out if they should be getting other CC's now or changing things, before it hurts them based on objective data.

Personally, I don't care. My credit is in the 800s, I have a high salary, have no CC debt, no mortgage debt, only a car loan which will be paid in full at the end of the month (special financing deal) which has been open for 2 months.

I know AmEx isn't going to care. But other people may, and this thread has 12k+ views. At least we could give people (both in the market for a CC, or wanting to understand) a clear reason to their CLI decrease, or to show others why it wouldn't be a good idea to apply for an AmEx right now, based on stats similar to theirs.

With all due respect (honestly) the number of views for this thread has absolutely no direct correlation whatsoever to support of your specific idea.

Since you have tossed this idea out there have been three direct responses, one that was "lukewarm" (ttjoseph) and two in the negative (myself & skofarrell). So far, not seeing a stream of responses stating "Yes, that's a great idea, I'm in!"

Additionally, if people would make actual credit management decisions for their personal finances based off anonymously submitted data to a FT spreadsheet in the sky... well no wonder our economy is a mess...

But hey, knock yourself out. Set up your spreadsheet and wait for customers. :)

Regards

Customers? I'm not trying to make *any* money off this; just something to do.

Customers? I'm not trying to make *any* money off this; just something to do.

Aye carumba... I used the term "customers" as slang, meaning "those you hope will participate in your idea with you" not in the literal definition of the word.

Good luck...

Anyone hit with a CL decrease who doesn't have a mortgage?

Me. I got the emails that my limit was dropped to just above my balance on Blue and SPG yesterday.

I have to say, my feelings are hurt. I have a well-paying job that is not at risk, high credit rating, no mortgage. I've been with Amex for 20 years and I've made them a good amount of money in transaction fees and interest (I carry a balance but pay more than the minimum consistently) and would continue to do so if they didn't do this. I'm disappointed. I can't decide if I'm going to stay with them anymore. But I'm also concerned that if I balance transfer to other open cards I have, those will shut me down too.

What a big change in behavior from a credit card company! It wasn't so long ago that they were incentivizing their customers to take on as much debt as possible. The silver lining in all this is that it will force people (not referring to eeeee or anyone on FT) to be more responsible with credit.

I have a well-paying job that is not at risk, high credit rating, no mortgage. I've been with Amex for 20 years and I've made them a good amount of money in transaction fees and interest (I carry a balance but pay more than the minimum consistently) and would continue to do so if they didn't do this. I'm disappointed. I can't decide if I'm going to stay with them anymore. But I'm also concerned that if I balance transfer to other open cards I have, those will shut me down too.

I hope you have a decent interest rate - Amex rates are generally terrible. Rewards aren't worth it if you have to pay a high rate to carry a balance.

I guess I should address my own question - I have no mortgage or other liabilities and have never carried a balance on any credit card, Amex or otherwise. Every penny on every credit card has been paid on time, 100% of the time. My reasonably generous limit hasn't changed.

But, based on posts here, I would guess that if I were to start carrying a balance or take out a loan of some sort, Amex would knock down my limit quite a bit.

Me. I got the emails that my limit was dropped to just above my balance on Blue and SPG yesterday.

I have to say, my feelings are hurt. I have a well-paying job that is not at risk, high credit rating, no mortgage. I've been with Amex for 20 years and I've made them a good amount of money in transaction fees and interest (I carry a balance but pay more than the minimum consistently) and would continue to do so if they didn't do this. I'm disappointed. I can't decide if I'm going to stay with them anymore. But I'm also concerned that if I balance transfer to other open cards I have, those will shut me down too.

Similar story. My credit limit on the Blue card got cut 79% to just above the balance (which was done on a life-of-the-balance transfer offer they haven't repeated). They gave me a "normal" credit limit to start (in line with other cards), but hiked it around 120% under some goofy offer where balance transfers would raise the credit limit. I used it for a game of "transfer tennis" some years ago on a points offer on another card (more FT advice) without caring about the offer to raise the credit line, but didn't leave that much money parked on Amex in the end. So I had a bloated credit limit on the card, but also a balance of around 25% of the limit that got paid down on time for years with no new charges made (being wise to the mixing-of-interest-rates trick),

Even though I didn't intend to use the unused credit, removing it and dropping the credit limit BELOW where it started years ago messes up the "utilization" scores across the other cards. I don't know the credit score but have never had a late payment or other ding in 25 years.

It's also irritating to get some tersely worded letter about why they supposedly dropped your limit after "careful review" for various reasons (from pulling a credit report), and then see the same day that they want to be in line for a federal bailout!

So they've damaged goodwill here. Many people have long memories about that. The card will get paid down regularly, possibly early, and will likely go dormant or - if they add any fees - get cancelled.

Customers? I'm not trying to make *any* money off this; just something to do.

I think its less of a bad and idea and more of a waste of time. From reading credit boards, the credit matters blog (he's linked some Amex Wall Street presentations there), and posts here, its pretty clear who's targeted:



Sub 720 Experian FICO (Possibility Sub 750)
Has significant balances on cards
Has Debt to available credit ratio of 15-20% or more


eeeee and RustyC, care to provide your numbers? All are available for $38 at myfico.com (use discount code cppsavings) which I got from creditboards.com

So they've damaged goodwill here. Many people have long memories about that. The card will get paid down regularly, possibly early, and will likely go dormant or - if they add any fees - get cancelled.

After touting AMEX for many years now, they have now lost me as a customer.

I got a letter stating that my flexible charges were being cancelled and everything is now due in full, except for what was already on flex and spend. My balance isnt very high and i have a 750 FICO score. Very upsetting!

On the other hand, while I have had my BOA Visa Platinum for a number of years, I only use it when I am in a place that doesn't take Amex. I doubt that I have ever had a monthly balance of more than $25.

Today, I went into my branch in Florida to change my address -- to my Israeli one. I wondered if this would result in them taking away my Visa or reducing my line of credit. Instead, they gave me a hard push to accept my "pre-approved" Visa Platinum Plus in addition to my old Visa.

It turned out that I was "pre-approved" for every card in their collection, including the BOA Amex if I wanted it. Finally, to get out of there, I told them they could mail me the Platinum Plus to my Israeli address.

Now I am about to call Amex to change my address. I wonder what the reaction will be there.

On the other hand, while I have had my BOA Visa Platinum for a number of years, I only use it when I am in a place that doesn't take Amex. I doubt that I have ever had a monthly balance of more than $25.

Today, I went into my branch in Florida to change my address -- to my Israeli one. I wondered if this would result in them taking away my Visa or reducing my line of credit. Instead, they gave me a hard push to accept my "pre-approved" Visa Platinum Plus in addition to my old Visa.

It turned out that I was "pre-approved" for every card in their collection, including the BOA Amex if I wanted it. Finally, to get out of there, I told them they could mail me the Platinum Plus to my Israeli address.

Now I am about to call Amex to change my address. I wonder what the reaction will be there.

Probably will be informed that if you want to have your statement mailed to your Israeli address it will cost you some $$. I do not know the exact fee, but there is a charge.

Probably will be informed that if you want to have your statement mailed to your Israeli address it will cost you some $$. I do not know the exact fee, but there is a charge.


No, I just spoke with them and they said it would be no problem. They didn't mention any fees but I have long set my preferences to getting electronic statements only.

Interestly, they apparently sent something (I don't know what) to my US address and the rep told me it was returned and that as a result my account was frozen.

I told him that was impossible as I have used my account repeatedly in the past two days -- the latest being about 90 minutes ago -- without any problem.

He looked again and said he made a mistake; the only thing that was frozen was sending mail to me. My account wasn't.

No, I just spoke with them and they said it would be no problem. They didn't mention any fees but I have long set my preferences to getting electronic statements only.

Interestly, they apparently sent something (I don't know what) to my US address and the rep told me it was returned and that as a result my account was frozen.

I told him that was impossible as I have used my account repeatedly in the past two days -- the latest being about 90 minutes ago -- without any problem.

He looked again and said he made a mistake; the only thing that was frozen was sending mail to me. My account wasn't.

There is no fee for an e-statement, however there is a fee to receive your paper statement overseas.

I got a letter stating that my flexible charges were being cancelled and everything is now due in full, except for what was already on flex and spend. My balance isnt very high and i have a 750 FICO score. Very upsetting!

They're doing you a favor by killing your flexible spending line. The interest rates on that are horrible.