My American Express experience

Some of my more popular blog posts are:

I get hits and comments on these posts on a regular basis. This part of my blog is a good place to vent some frustration and share with people who went through the same experience. I had an experience with American Express that originally caused me to blog about it. Originally, when I was profiled for being in a county in California that dominated the numbers when it came to foreclosures and layoffs, I googled to see what was up. I only found less than a handful of similar stories and they were buried in forums.

Since blogging about what happened to me, many of you decided to share your experience as it happened to you. I definitely appreciate it and I think many of my readers will as well. No one wants to be singled out for rejection and that is the way the company made us feel. On top of that, the credit limit reductions had unintended consequences on our overall credit scores. Most of us pride ourselves in keeping our credit perfect, and felt that American Express tarnished our credit reputation unfairly by making it look like we were at 99-100% credit line usage. For me and many of you, it was literally overnight and without warning.

I wanted to spotlight one comment because it was so upsetting to hear. I am glad it didn’t happen to me, but maybe if there is someone in the same situation Pete was in, you might learn from his story, make an informed decision, and possibly avoid any headaches. Thanks again, Pete for sharing your story.

Pete:

Apologies in advance for the long story. I’ve had an Amex Blue without issue for about four or five years and have been quite tight with my use of it never going over 50% of the credit limit and usually paying it off in full within one to two months.
I was initially approved with somewhere around an $8K limit, then it bumped up over the years to $11K, then $16K, then somewhere over $20K, and finally earlier this year to $35K.

So, let’s begin the “fun”- Here’s a little timeline of events:

1. September 16th 2008 closing date statement:
$35,000 credit line. $2030 purchase made this month.
This is the only purchase I’ve made on the card all year.
Made a minimum payment, with the intent to pay off two equal chunks, or one full chunk, by the next statement. I consider myself pretty aware of credit scores and rules, so I figured the month of usage might help keep my card looking active, as I was thinking of beginning to use it a little more over the holidays for rewards points purposes. I saw a news piece a couple of weeks ago talking about credit card companies and the economic crisis going on right now, and how AMEX specifically was planning on decreasing limits on some percentage of its users.

2. Around October 7th, 2008:
I receive three balance transfer checks from AMEX blue in the mail. First time that I’ve ever received them over the life of my card membership.

3. October 8th, 2008 – (Wednesday):
I write one check to WaMu mastercard to pay off a balance of $2000.
I write another check for $1900 to pay off a citibank card that does not have online payment access.
Both go in the mail.

Just to clarify: at this point, I figured I am just using these checks to show some usage of them, in order to keep myself looking active as a blue card user.

I was about to zero out my balance on Amex Blue, and transfer $3900 to it. Then pay THAT balance off in the next cycle. I always figure if i have these cards and the cash to pay them off, why not get their free perks and usual purchase return protection, etc, rather than using cash directly. Hopefully at this point you can sense where this story is heading and the amount of frustration I about to experience.

You’ll also see why the dates, and days, are keeping this making some sense.

4. October 14, 2008. Tuesday:
I check my WaMU mastercard account and see that they quite quickly received the Amex Blue transfer check and posted the payment of $2000. I don’t give it any further thought. All seems fine. I don’t bother to check the citibank card.

5. October 15, 2008, yesterday.
I realize my blue card’s closing date is coming up. I decide to log on, and squeeze in a big payment before the closing date so that my statement has no payment due, and I wanted to make sure it was substantially more than the minimum.
To my dismay, I do not see my credit availability as “$32,970? but it is INSTEAD $170.
That would mean that my card went from a $35000 limit with a $2000 balance down to a $2200 limit with a $2030 balance.

At this point, I’m confused. I check my WaMu account again and it’s fine, still shows a posted payment of $2000. I hurry and check the citibank card account, and see that the Amex Blue check for $1900 that i sent in has been received and had bounced on 10/14 (Tuesday). But this doesn’t explain the check sent to WaMu that they posted as a payment. That would mean that my limit is $2200 but my balance is now $4030… !?!?

I call AMEX. The customer support person can’t really help, and forwards me to the credit line department. I am on hold for 30 minutes and eventually hang up.

(by the way thanks for keeping up with me this long)

6. October 16, 2008, today:
Call AMEX credit department again at 9 am. They explain that on October 13th, 2008 (Monday), my card was “evaluated” and the credit line was dropped. They apparently sent out a letter that day too- but as of yesterday, I still hadn’t received it. They have no ability to explain their messup in sending out Balance transfer checks then creating a situation where they’d bounce!
I asked about my payment to WaMu using a check that appears to have been processed just fine- except it’s not showing on my Amex Blue online statement. The customer service person tells me “it’s going to be denied”…!
At that point, I asked to speak to a supervisor, and the wait time was so long that I had to leave my number and am now at 1pm EST still waiting for a call back.

ISN’T THIS A BIG PAIN?

Some thoughts- Might be assuming here, but AMEX’s credit line department must be getting A LOT of calls like this right now, hence the news report i mentioned earlier and the extreme wait times.

My fears now:
-I am going to get hit with a return payment on my WaMu card if that amex check bounces. As of today, 10/16, it still looks fine when i check the WaMU statement online. I don’t even carry the WaMu card, so I can’t even call them right now.
-My AMEX blue statement closing date is today, 10/16. When Amex reports to FICO, I will suddenly have a $2200 balance that for all appearances is maxed out with a $2030 credit line. This is a situation I’ve avoided my entire credit life.

I’m waiting for the supervisor callback until about 2pm, and am trying to find out if I can make a phone payment that would post TODAY, prior to the statement being generated. Otherwise, I can pay online but it won’t post in time to make the statement (it needs 24-72 hours, I would have paid yesterday, but I thought there was something much worse going on with the account, until i googled and found many articles such as this one).

To add insult to injury:
I have an AMEX platinum and gold. My wife and i use those quite regularly, basically as cash. Amex has begun offering a credit portion on those (in other words, you don’t have to pay it all off at once if you don’t want), and JUST NOW, in late september, enticed us to turn this feature on with a rate that was lower than our AMEX blue card! Don’t think I’d ever really use this feature, but figured it’s always good to have a backup. Each month they automatically put anything over $100 into that portion of your credit/charge list.
Easy way for them to make money, i guess.

So, now I’m just frustrated. $35K limit down to $2K. Overnight.
NO notice- except for the letter I’ll probably get in the mail today. And, all of it done WHILE other institutions are trying to cash the amex balance transfer checks!!

BLAH!