Black American express declines Mark Cuban’s charge video on Jay Leno show.

Funny how even a billionaire can get a small charge (for him) get declined by amex. These cards don’t even have a spending limit and yet they contradict themselves by not approving the card.

Here is an old post I want to share with you. It’s been awhile so I forget sometimes how rotten these credit cards can be.

I used to have perfect credit and multiple credit cards from American Express, Bank of America, Citibank, Chase Manhattan and many other little companies for the past 20 years that they absorbed or merged into their too big too fail banks. And then over 3 years ago, literally overnight the banks cut my credit lines. First,  American Express reduced over $80,000 worth of credit down to what I owed. Then later Chase cut my credit lines all to $1000 each. Then they cancelled it later. All these actions literally pushed my credit score down. Then Bank of America followed suit and cancelled my credit cards. Those were scary times back then. Of course, Citibank followed the other companies and cut my credit limits to the balance owed if any and then cancelled cards with zero balances.

You are probably in the same boat now if you are reading this post and came here from a search engine quest. You must be wondering why did Chase reduce my credit limit? Or why did Bank of America cancel all my credit cards or credit lines? Or why is American Express suspending my account and requesting my last 2-5 years worth of tax returns to do a financial review? Why ask why, right?

Your profile: perfect credit, same job and steady income for last 3-5 years or more, and possibly even less debt than before. Why would they target you the perfect customer who has been with them for 10-20+ years and never paid them late? There are a bunch of links and comments to other people in this post who have experienced the same thing.

At first you may take it personally like a relationship. Why did my credit card company dump me? I have been faithful and never cheated. I take my credit cards with me everywhere, use it to buy flowers and and occasional dinner, and then one day the bags are packed and the card is gone with no trace except for a balance accruing interest. sigh.

Then you may actually go through another stage and yell out obscenities. This is bull crap! Then you may read the forums and start looking for someone or an attorney who has started a class action lawsuit against all these bankswe bailed out with our taxpayer money. I blogged about it here and there are some suits happening right now. I suspect it will take 5-10 years to get through the system since they have plenty of attorneys to fight us little guys.

Maybe you are at the stage where I am at today. I pay cash for everything and avoid letting these banksters profit off of me anymore. It’s nothing personal and strictly business will be their robot answer for the ugly experience they put you through.    Just remember you decide how your dollars are spent and whether you will continue to support them in making money. Simply boycott them now and in the future.

I used to have perfect credit and multiple credit cards from American Express, Bank of America, Citibank, Chase Manhattan and many other little companies for the past 20 years that they absorbed or merged into their too big too fail banks. And then over 3 years ago, literally overnight the banks cut my credit lines. This will flag on your credit report that you are maxed out on a credit card even though you were no where close to the limits the previous day.

For me American Express reduced over $80,000 worth of credit down to what I owed. Then later Chase cut my credit lines all to $1000 each. Then they cancelled it later. All these actions literally pushed my credit score down. Then Bank of America followed suit and cancelled my credit cards. Those were scary times back then. Of course, Citibank followed the other companies and cut my credit limits to the balance owed if any and then cancelled cards with zero balances.Once this happens, there is a good chance the other credit card companies will follow suit with software that scans for such changes.  They all do it and that is why credit card companies can ruin your credit rating.

You are probably in the same boat now if you are reading this post and came here from a search engine quest. You must be wondering why did Chase reduce my credit limit? Or why did Bank of America cancel all my credit cards or credit lines? Or why is American Express suspending my account and requesting my last 2-5 years worth of tax returns to do a financial review? Why ask why, right?

Your profile: perfect credit, same job and steady income for last 3-5 years or more, and possibly even less debt than before. Why would they target you the perfect customer who has been with them for 10-20+ years and never paid them late? There are a bunch of links and comments to other people in this post who have experienced the same thing. Maybe you are at the stage where I am at today. I pay cash for everything and avoid letting these banksters profit off of me anymore. It’s nothing personal and strictly business will be their robot answer for the ugly experience they put you through.    Just remember you decide how your dollars are spent and whether you will continue to support them in making money. Simply boycott them now and in the future.

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

221 American Express credit line reduction comments

American Express fighting Department of Justice lawsuit

American Express aggresively canceling credit cards and lowering limits

Yes, they profile everyone and determine whether you are a risk or not. They don’t do it the old fashion way based on your credit profile, credit or Fico score, payment history with them, or longevity on the job. The economy is different so they have taken a different approach.

American express rates credit risk by where you live and shop. That is correct and not a rumor. Forget what snopes or urban legend sites say. I have a letter that confirms it from the msnbc site posted below.

As I have mentioned in the past if this has happened to you, it is natural to be angry. But remember not to take it personally. You are Not a valued customer, but simply either a profile that represents possible profit or loss to them.  Read the comments on my previous posts and I bet you can find your profile there.

The federal deficit is closer to 15 trillion dollars and our big states like California and New York can’t balance their state budgets without drastic cuts.  I do believe many of municipalities will start to default later this year in some form based on the last Meredith Whitney video I watched.  She makes a lot of sense.

Unemployment has gone from 7% in 2009 to over 10% and is supposedly back down to just under 9%. The truth is the numbers are much higher and we know this because not everyone unemployed is counted in the numbers. On top of that the real numbers are closer to the BLS or Bureau of Labor Statistics u-6 numbers which is double the reported rates we hear on the news. The real US unemployment rate may be 22.1 percent for February, not the 8.9 percent reported by the government, according to economist John Williams, author of the “Shadow Government Statistics” website, who has argued for years that the federal government manipulates the reporting of economic data for political purposes

If you are employed right now, then you probably feel we are living in a recession.  The feelings come from the lack of job security, high food and gas prices, and realizing we live from paycheck to paycheck.   Now, if you are unemployed the feeling will be closer to living in a depression.  This is based on scarcity of jobs,  abandoned and foreclosed houses in our neighborhoods, and a general feeling of helplessness.

Either way, if you feel like you are living  in a recession or depression, then take immediate action to protect your family and savings.
Once you are either laid off or your hours are cut, pay only the necessities like rent/mortgage, car note, utilities and food. Everything else needs to be put off because you want that cash to last as long as possible. This is putting your family and yourself as a priority.

If you read about the hardships people are experiencing in this recession, you will notice a pattern. They either had been laid off or hours have been cut. They use their money and drain all their retirement accounts to try to keep all their bills current which includes credit cards and personal loans. This will burn your reserves fast if you have no other source of income coming in.

Yes, you will get collection calls and letters, and your credit score will take a temporary hit, but that is still better than becoming homeless or not having enough food to feed your family after the basic necessities are paid. Not only that, credit profiles in this environment seem to have become worthless. The banks and credit card companies themselves are struggling to stay afloat. We are bailing them out with taxpayer money.

Trust me and not the experts on this one. You can have perfect credit, a high FICO score, and a long term job, but the credit card company will eventually reduce your credit because they need to manage their portfolio and reduce their risk which means cutting credit lines even with their perfect “customers”.  It is no longer just Amex doing this, but Visa, MC and Discover are all doing the same thing. Remember once your credit is gone, you will wish you had put that money in the bank and not pay down your credit cards. Cancelled credit cards and zero money in the bank means no more emergency fund or financial cushion.

Read other blogs or sites that tell you how to survive in this economy. Knowledge is power. Do not depend on the government to bail you out, because you will be disappointed.

Blogs and sites that have great ideas you might be able to use:

Being Frugal

Frugal Living

The Cheapskate Guide

Better Budgeting

WiseBread

You are probably in the same boat now if you are reading this post and came here from a search engine quest. You must be wondering why did Chase reduce my credit limit? Or why did Bank of America cancel all my credit cards or credit lines? Or why is American Express suspending my account and requesting my last 2-5 years worth of tax returns to do a financial review? Why ask why, right?

Your profile: perfect credit, same job and steady income for last 3-5 years or more, and possibly even less debt than before. Why would they target you the perfect customer who has been with them for 10-20+ years and never paid them late? There are a bunch of links and comments to other people in this post who have experienced the same thing.

At first you may take it personally like a relationship. Why did my credit card company dump me? I have been faithful and never cheated. I take my credit cards with me everywhere, use it to buy flowers and and occasional dinner, and then one day the bags are packed and the card is gone with no trace except for a balance accruing interest. sigh.

Then you may actually go through another stage and yell out obscenities. This is bull crap! Then you may read the forums and start looking for someone or an attorney who has started a class action lawsuit against all these banks we bailed out with our taxpayer money. I blogged about it here and there are some suits happening right now. I suspect it will take 5-10 years to get through the system since they have plenty of attorneys to fight us little guys.

Maybe you are at the stage where I am at today. I pay cash for everything and avoid letting these banksters profit off of me anymore. It’s nothing personal and strictly business will be their robot answer for the ugly experience they put you through.    Just remember you decide how your dollars are spent and whether you will continue to support them in making money. Simply boycott them now and in the future.

American Express said on Wednesday that it would close customer service centers and cut 550 jobs as it helps more people on the Internet, a move that will cost the company $74 million after taxes.

The company, a credit card lender and payment processing network, will move another 3,000 jobs to different locations as part of its reorganization, it said.

The restructuring charge will reduce fourth-quarter profit by 6 cents a share. American Express, which was scheduled to report its quarterly earnings Monday, said it earned $1.1 billion, or 88 cents a share, in the quarter.

Excluding the charge, the company’s 94-cent profit missed analysts’ average expectations by a penny, according to Thomson Reuters. American Express shares fell 2.44 percent to close at $45.24.

The earnings miss was an unpleasant surprise to some investors, considering positive trends on spending volume and credit, an analyst at Sandler O’Neill, Michael Taiano, said.

The chief executive of American Express, Kenneth I. Chenault, cited “record levels” of customer spending on their credit cards, and said in the earnings release that credit losses also continued to shrink.

I am not a fan of American Express and at one point had $85,000 worth of credit extended to me by that company.  I also used to be a credit card merchant with them too.   Eventually, they targeted me to reduce my credit lines and in the process killed my credit scores.  Here is the old post from 3 years ago with about 200 comments of others who were treated the same way:  Recession is forcing American Express to reduce credit lines for no reason.

Later, that company received a taxpayer bailout by converting its status to a bank holding company.  This is one of the reasons we threw out so many politicians in the last election.

Bloomberg:

Dec. 23 – American Express, the credit- card company that’s converting into a bank, will get $3.39 billion of fresh capital from the U.S. rescue fund to ensure its survival as the recession heads into a second year.

I can only hope we don’t have more foolish politicians sending our taxpayer money to private companies.  We have millions of Americans unemployed, millions being foreclosed, and many more becoming homeless.  We don’t need to give away our money to pay for banksters’ bonuses and toilets.

Last taxpayer bailout paid for a $35,000 toilet and employee bonuses

Basically, accounts that are in the collection cycle (30-179 days) tend to stay in collections when the debtor is making minimum payments.    Most consumers will be able to obtain a payment but not pay off the balance.  So if a person who is 60 days past due makes a payment, he or she becomes 30 days past due. Same thing applies to anyone in the 6 month cycle of credit card collections before they are charged off (150 days >120 days, 120 days>90 days, 90 days>60 days, 60 days>30 days).

However, once a credit card is charged off, any payments thereafter are applied differently.  The defaults are no longer counted in the delinquency numbers which then becomes lower overall.  What this actually indicates is that more accounts are defaulting because of unsuccessful attempts by collectors to mitigate the accounts.

Wall Street Journal:

Monthly data released Wednesday by major credit-card issuers, including Capital One Financial Corp. (COF), American Express Co. (AXP), Discover Financial Services (DFS), Bank of America Corp. (BAC) and J.P. Morgan Chase & Co. (JPM), indicated that delinquencies, a closely followed gauge of future losses, declined to their lowest point so far this year.

The rate at which lenders wrote off loans they likely won’t collect on remains elevated, even rising for some. The loan write-offs come as seasonal factors that bolstered payments on card loans — such as tax-refund checks — are behind the card industry.

The challenge now for card issuers is to bolster the size of their loan books; the more that cardholders charge on their plastic, the more the companies earn by way of fees, so the amount customers spend is critical. Card-loan balances — and, as a result, revenue — have been falling as companies, stung by steep losses during the economic slump, scaled back on credit and toughened lending standards.

In addition, the clamor for credit may be tempered by consumers, hit by the recession, borrowing less. Borrowers reduced their revolving credit lines — mainly card balances — by about $5.6 billion in October from September, according to the Federal Reserve. That’s an annualized rate of 8.4%. Since the end of 2008, these balances have shrunk by about $157 billion to $800.5 billion.

Credit-card issuing banks are also facing an erosion in profits and revenue stemming from new expansive rules curbing income on credit- and debit-cards.

At Capital One, a card-lender-turned-bank, U.S. borrowers at least a month behind in their card payments fell to 4.26% in November from 4.45% in October. Charge-offs in its U.S. credit-card business rose to an annualized 7.56% last month from 7.26% in October, according to a regulatory filing Wednesday with the U.S. Securities and Exchange Commission. Its shares were down 1% to $41.70 in afternoon trading.

Charge-offs are loans that a card issuer deems uncollectible because borrowers can’t repay them; they are based on past delinquent balances. Delinquencies are loans that may be written off in the future. The delinquency rate is important because higher delinquencies force issuers to squirrel away capital to cover potential losses.

At American Express, which has an affluent cardholder base, the 30-day delinquency rate continued to fall, at 2.2% in November from 2.3% in October. AmEx in a SEC filing said it wrote off an annualized 4.4% of its U.S. card loans last month, down from 4.7% in October. It shares recently traded at $46.44, up 0.5%.

Discover said charge-offs in November totaled 6.72% of credit-card loans that have been packaged into bonds, down from 6.83% in October. The 30-day delinquency rate fell to 4.15% last month from 4.34% in October. Its shares rose 0.7% to $19.28. Discover and its bigger rival, American Express, also process card transactions in addition to issuing credit cards.

J.P. Morgan Chase said charge-offs rose to 7.16% last month from 7% in October. In the same period, total delinquencies fell to 3.68% from 3.81%. The shares are down 0.9% at $40.43.

Bank of America, at a write-off rate of 9.92% in November, had the highest among its peers. But the write-off rate was lower than the 10.15% in October. Bank of America has consistently reported a higher write-off rate than other major U.S. card issuers. Total delinquencies were lower at 5.47% last month compared with 5.6% in October. Bank of America shares recently traded at $12.38, down 0.2%.

Citigroup Inc. (C) is slated to report later Wednesday; its stock is down 1.6% at $4.62.