CHESSNOID

I missed the blurb about Moody’s cutting American Express’ credit rating yesterday, but I think it is karma coming back to bite Amex.  They cut peoples credit lines and now Moody’s may be cutting their credit rating. Ironic!

The New York-based company is under review to have its A1 rating lowered by one level because of future losses from soured credit-card loans, Moody’s said today in a statement. A downgrade would affect about $89 billion in securities and deposits.

American Express may suffer further loan losses, “particularly within geographic markets in the United States that have experienced sharp home price declines,” analyst Blaine Frantz said in the note.

The credit-card company has dropped by more than a third in the past year as consumers struggled to repay debt of all types. Late and unpaid loans were worse than expected in the second quarter and will rise this year, Chief Executive Officer Kenneth Chenault said July 21. Even the lender’s wealthier cardholders were affected by the slowing U.S. economy, he said.

Up until 6 months ago, I personally thought Amex was the best credit card company out there and seemed to cater to its upscale customer base.  I was a loyal customer and paid them every month on time without fail.  However, I live in a high foreclosure zip code in an extremely high foreclosure state, which prompted them to play chase the balance game with me. I just don’t think it is right for Amex to target me because of where I live.

I think with all the recent decisions Amex has made  negatively affecting their loyal customers who aren’t delinquent on their credit agreements, they will continue to feel even more pain back.  They have customers who truly have defaulted and should be dealt with accordingly, and now they have alienated the customers who pay timely and they are leaving and taking their business to credit card companies who will appreciate them.