Credit card companies cutting credit limits

With the credit crunch, all the credit card companies are reducing limits or canceling cards. From my blog stats, I can actually tell when American Express does credit limit cuts across the board. I usually have a surge from search engines about Amex cutting people limits trying to figure out why they were the next victim. These are the articles they wind up reading on my blog from a few months ago:

Recession forcing American Express to target profiles to decrease credit limits

American Express “financial review” comment

This post has modestexpert sharing his personal experience with a lot of details.

Un-American Express targeting profiles to decrease credit lines

Recession is forcing American Express to reduce credit lines for no reason

This blog post has 43 comments with people sharing their experience with Amex. They all have the same theme of being long time loyal customers and never being late with their payments.

American Express playing “chasing the balance” game

American Express may have been one of the first cards to cut credit limits across their entire portfolio, but all the companies are doing them now. They hide behind generic reasons to justify their actions such as change in your credit score, high balances compared to your income, or we need to look at your taxes from the last 2 years to make sure you didn’t lie to us. It would be more honest to say, hey the credit crunch has hurt us too, so we have to reduce every one’s credit lines to stay in business. Please don’t take it personal and sorry for the inconvenience. That would be better than alienating your base by lying to them and forcing them to look to the internet and see if this happened to someone else and finding out the real truth.

3 Comments

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Steve, October 10, 2008:

Hello, it has happened to me. I am happy to find your site. I can atleast see I am not alone. My main concern is my credit. This action of lowering my credit to 100.00 above my balance affects my credit score. From what I have found this can lower my score between 3-12 points. This also affects my other cards since my debt to credit rate is now at 99% instead of 40%. How do they get away with this. If you follow all of the rules you should not be penalized. If every card I have did this my credit score could drop 200+ points. With that said what would the point of paying them even be? What recourse do we have as consumers.
mark, October 25, 2008:

My limits was lowered from 25,000 to $500 as to tell me that do not use this card, or you will go over your limit every month. despite the fact that for past 6 years, I’ ve been a faithful customer with them, even set up a direct payment with them.
F**K AE, I’ll go for Chase.
rtr, October 30, 2008:

I had 2 amex cards, both for 15K credit. Both got reduced to $500. This is simply ridiculous.