American Express aggresively canceling credit cards and lowering limits
If you searched to find out why your American Express credit card limit was reduced if you carry no balance from $30,000 down to $500 or to your balance owed so you would look like you maxed out your card, then you have come to the right place. Here is my original post from over a year ago which now has about 150 comments describing similar reductions to other former loyal payers! A second popular post with 55 comments.
My limits were shut down over a year ago. Since then American Express’ stock price has plummeted from a 52 week high of $52.63 down to a low of $9.86. They have also laid off about 10,000 employees if not more. This crooked company has also changed its status to commercial bank so they can participate in the FRAUD BAILOUT.
Analysts say the company, confronting soaring default rates on its cards, is trying to limit the damage to its own finances while cutting ahead of rivals in line to be paid back. The default rate on AmEx cards soared to 8.3% in January from 4.7% a year earlier, according to data from the trust that handles the company’s consumer lending receivables.
American Express “appears to be going to great length to reduce its exposure to the unfolding consumer credit downturn,” wrote Bank of America analyst Kenneth Bruce in a report last month. He added that the company is probably targeting “cardholders with sizable outstanding balances and a higher risk of default.”
AmEx hasn’t revealed details of the offer and didn’t respond to requests for comment. But it is an unusual move for a company that has spent years burnishing its image as the credit card issuer of the jet set.
“A company like American Express that has built its reputation on premium service, concierges and exclusive art event invitations now appears to be penny pinching when times are tough,” said Leslie Gaines-Ross, chief reputation strategist at public relations firm Weber Shandwick in New York.
Further complicating matters is American Express’ decision to take $3.4 billion in federal assistance in January under the Treasury’s Troubled Asset Relief Program, or TARP.
Companies receiving TARP funding don’t have to promise to increase lending. But with the bill for the government’s economic stimulus and financial stability plans running into the trillions of dollars, there has been talk in Washington of explicitly linking new federal aid to the flow of funds from banks to consumers and businesses.
Meanwhile, American Express was pulling back even before the bottom fell out of the economy last fall.
“As we had expected, late payments and write-offs in our charge card and lending portfolios increased throughout the year,” said AmEx CEO Ken Chenault in his 2008 letter to shareholders. “We took steps to manage the increased risk, such as selectively reducing lines of credit.”
AmEx isn’t the only credit card issuer to be reducing credit lines and closing unused accounts, analysts say. “There is a whole new world out there,” said Linda Sherry, the director of national priorities at advocacy group Consumer Action. “In some ways we think it’s sensible for there to be less credit available, but we can’t agree with how the card companies have been doing it.”
American Express has decided to join other credit card issuers of getting taxpayer funds through fraudulent bailouts or 0% federal loans and loaning this money (our own taxpayer money) back to us at 10-25% interest rates. Yes, they are getting tax money at 0% to loan it back to the taxpayers at higher rates through their credit cards. They need to be allowed to fail and go BANKRUPT like the other corrupt companies asking for bailout money!
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The joke is on AE.
They just cut me from $11,000 to $2,000. I’ve been an AE member for over 17 years and paid in full every month. About 4 years ago they issued me a Costco card with an $11,000 limit. My expenses were more than 76% of monthly income. I recently paid off two big bills, my income has increased every year (COLA increases) and this month I began recieving pension payments. My expenses today are under 35% of my income. I closed my AE account and told them were they could pack any future offers.
Lets see – after being chased for over a year and close two twenty offers from AMEX, I broke down and applied for the card. I was approved in seconds. I thought great – I can rack up the rewards. Not so fast. One month later, my account has been cancelled. Unbelievable! They wanted my busines then wham, taken away. I am so angry becuase now they are going to report their decision to the credit bureaus, thus affecting my credit score and likely costing me thousands in future loans fro car or a house. The worst part about it, the reasons they gave dont apply! I have no delinquincies, no other credit card debt, have had several accounts open for over a decade – all in good standing, and only one inquiriy from the last 12 months ( made by AMEX). So I am baffled, upset, and feel a crime has been committed. The crime of making my interest rate for furture loans go up – thus creating higher payments. What do I do? Can I sue – theer is no justification for this. There reasons are invalid.
AMF, Amex! Let’s see, I have been a cardholder in excess of 30 years. Paid on time. No excessive amounts. Good credit report. Treated indistinguishably like crap. That makes sense! Now in the process of cancelling all personal and business accounts. Left home without it. Apparently it’s in India somewhere now.
never missed a payment paid last bill over 8000.00 next month dropped credit line to 500.00 I told them to stick it up there ASS lost all my costco rebates
I started a cause on Facebook called “Boycott American Express”, feel free to join and spread the word:
http://apps.facebook.com/causes/289806
We have been members since 1994. Logged onto our account this morning and what do we find..a big old,”this account is cancelled.” message. No letter, no warning. Thanks AMEX. Guess what, we’re canelling them forever.
I have been a member since 1999 when I turned 18. I have never missed a single payment. They kept upping my available credit from $500 to ~$8000, even last year, usually without me asking.
I paid 5x my minimum amount due on the 11th, received a statement on the 19th saying everything was fine, charges went through at 11 PM on 9/21, but as of 5 AM 9/22 it says “This account has been cancelled.”
Same happened to me! At first they lowered my credit limit and now after I paid of my whole balance, two days later I log into the website and they say my account has been cancelled! Without any warning, letter or customer service call! This people are not loyal to their customers! I’m very disappointed!
I received a letter today about the cancellation of my card. Never late, good credit..so all their reasons aren’t valid. The public isn’t stupid. We know why they r doing it. How do you get the credit reporting companies to note never late etc? Probably no way to prevent it from affecting your credit? AE Sucks!
I lost my job, and had a problem with my unemployment checks not coming in (thanks, California!), so I fell behind on my Amex payments. I spoke to them, indicating the situation, and they were not interested in working with me, one customer service rep even asked if I could do a balance transfer.
So, I took money out of my savings, and paid off the balance on my cards. One more charge appeared on my Skymiles statement, the interest accrued because of the timing of my payment. I paid that as well. Two days later, they cancelled both of my accounts.
The customer service representatives were very defensive, blaming me for being late (I was) and for my Experian credit report being a cause of the cancellation.
I argued that they didn’t cancel my accounts when I was maintaining a high balance at a high interest rate, but once I paid in full, they ditched me. Back and forth, but we all know what’s up.
I got my Membership Rewards points cashed out, and had a very pleasant call with American Express yesterday. I asked them to please send me a detailed summary of their decision to cancel a 19-year card holder, thus affecting my credit score further. I told them that the Supreme Court considers their company to be a person, and as such, this was my notice to them that after I receive the detailed letter of why they chose to cancel my accounts, I don’t want to hear from them – and will consider any telephone, email or postal mail communications to be harrassment or stalking. The lady was going along her lines of reasoning…”You can get your card reinstated…your account would have been cancelled anyway…you were late on your payments, etc.”
Thanks, but no thanks. I was a loyal customer for 19 years. They will never get a penny from me, and the business I am starting up will never accept American Express as a payment, I will tell my story to everyone I know, and they just lost potential cardmembers for at least one generation. Reinstate me after treating me like this? Ahem, F. U.
I have just had the same experience as many have posted. I paid my bill and then they sent me an email saying card canceled. I called and the woman said we checked and you have too many credit cards. I only have them and one other. They are full of it. I do not want to reinstate I want to sue because they are affecting my credit score and I did nothing to deserve it. They were paid on time every time. This company is a rip off. Don’t apply because you may get embarrassed at the check out.Does anyone know if there is a class action out on them for doing this to people?
Hi Helen,
There is a lawsuit and i blogged about it over a year ago. I don’t know the status of it but there was a phone number of an attorney on that post in the comments section.
http://www.totalnoid.com/2009/04/21/amex-credit-card-class-action-lawsuit/
Good luck.
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