Originally Posted By SingleParkPassholder I'm guessing not so good. A while back I posted how Amex reduced our limits even though we don't owe them anything. It was us, not them, they said. They're in great shape, we're not. Really? Well, in the last 24 hours we received e-mail notification this time, not a letter (it was urgent), they've reduced us further. Unbelievable. Just in time for the holidays. We're cash and carry, and not everyone is in our situation where we make pretty good salaries between the two of us with no kids. If they're doing this to us, I can only imagine what it's doing to others. If these companies aren't going to pass along their precious bailout money to the consumer as they're expected to do, then what was the point of all this?
Originally Posted By SingleParkPassholder A Google search shows I'm really late to the party on Amex. When you consider the domino effect this type of thing has, none of this makes any sense. This blog is just a sampling of what's out there. <a href="http://www.totalnoid.com/2008/02/24/recession-is-forcing-american-express-to-reduce-credit-lines-for-no-reason/" target="_blank">http://www.totalnoid.com/2008/...-reason/</a>
Originally Posted By SingleParkPassholder Well, casting about the Googles about this shows that apparently Amex sent out what amounts to mass e-mailings on Thanksgiving night, delivering bad news to their customers. Nice timing. If anyone out there has an Amex, check your e-mail.
Originally Posted By barboy strange, so very strange SinglePark...... I just read your thread so I quickly checked my wife's e-mail(she holds an Amex)and she received no notice. So I told her to check out her account online and Amex recently **incresed** her limit from 35K to 37. What do you think? Do you have a theory as to why she was increased and countless other households were decreased; she, too, has not been carrying a balance.
Originally Posted By SingleParkPassholder "What do you think? Do you have a theory as to why she was increased and countless other households were decreased; she, too, has not been carrying a balance." Other than Amex is so messed up nothing makes sense? Your wife would be the only person I've heard of who was increased, especially without them gathering new information fromher.
Originally Posted By RoadTrip They probably read some of your posts here... ;-) Actually, I think you identified the reason here... <<We're cash and carry, and not everyone is in our situation where we make pretty good salaries between the two of us with no kids.>> You don't use it. When they evaluate companies it is the same as with individuals. They don't only look at credit used, they look at credit granted. Why should they have credit allocated to you that will never be used? My guess is that if you ever actually needed a higher line all you would have to do is call and ask. Our lines at AMEX have not been reduced. The Gold has no limit but needs to be paid in full each month (with exceptions). The Blue has a limit about 5 times more than any balance we've ever carried. But we DO use them. We usually put about 1K on each card each month and then pay it in full. Apparently that is enough to keep them happy.
Originally Posted By SingleParkPassholder "You don't use it. When they evaluate companies it is the same as with individuals. They don't only look at credit used, they look at credit granted. Why should they have credit allocated to you that will never be used? My guess is that if you ever actually needed a higher line all you would have to do is call and ask. Our lines at AMEX have not been reduced. The Gold has no limit but needs to be paid in full each month (with exceptions). The Blue has a limit about 5 times more than any balance we've ever carried. But we DO use them. We usually put about 1K on each card each month and then pay it in full. Apparently that is enough to keep them happy." Ah, but we do use it. We do what you do. If you haven't already, click on the blog link I provided, or google the stuff. I'd bet a dollar they get around to both you and barboy's wife.
Originally Posted By SuperDry <<< You don't use it. When they evaluate companies it is the same as with individuals. They don't only look at credit used, they look at credit granted. Why should they have credit allocated to you that will never be used? >>> I've been following the Amex situation rather closely. They've definitely been cutting back credit limits on people with problems on their credit reports, or even people with a clean credit report but had late payments with Amex a few times that weren't late enough to be put on a credit report. But there's another category of people that they've reduced limits for: those with perfect credit and payment history that have large credit limits that they've never used. In one sense, this really shouldn't affect the customer much at all - after all, if they had a limit of $40k and the most they ever used was $10k, what's the harm in cutting them back to $15k? (other than the credit use ratio that someone pointed out and how this affects credit score). But if you think about it a bit, it does start to make sense. If you have a longstanding customer that's never used more than $10k of their $40k credit line, what's the one situation where they probably would use more than they did historically, perhaps even approaching the full $40k limit? Anyone? Anyone? The answer is if they get into financial trouble and really need the money, which is not at all beyond the possible these days. Looking at the other side of it, it's unlikely that someone that has good credit and has a steady history of timely payment and use of a credit line up to a certain point is suddenly going to use several times that in the normal course of running their household.
Originally Posted By SuperDry <<< Well, in the last 24 hours we received e-mail notification this time, not a letter (it was urgent), they've reduced us further. Unbelievable. Just in time for the holidays. >>> That'll put a damper on your Black Friday stampede plans, now won't it? All this talk about reduced Amex credit lines made me check mine just now. So far, I've not had my lines reduced. One thing that occurs to me is that I actually do use up to close to my limit once or twice a year, so lowering my limits substantially would be more than a theoretical loss of potential business for Amex.
Originally Posted By RoadTrip Well, checked our most recent statements and we were hit. The credit lines remain the same, but interest rate on both accounts is going up by 3%. It doesn't bother me too much on the Gold. I had been pretty aggressive about negotiating a low rate on the Gold based on offers I received from other credit card companies for a low fixed rate. Besides, I rarely carried a balance on the Gold anyway... sometime a month or two for major travel charges, but that was about it. Right now I do not owe anything but the current month's charges and I will be sure to keep it that way. The Blue does irritate me a bunch. We don't owe much on it (about $2,500) but the reason we used it in the first place was the low interest rate. Our use of the Blue is done. Coincidentally about a month ago we received a call from Chase who asked why we had not used our Chase account for many years. I told them we were trying not to carry much in credit balances and really hadn't used anything except American Express for the last half dozen years. They asked what it would take to give them a try again. I said match the interest rate on the Amex Blue account. Much to my surprise they did. Little did I know at the time how valuable that would be. Goodbye Blue, hello Chase.
Originally Posted By fkurucz <<If these companies aren't going to pass along their precious bailout money to the consumer as they're expected to do, then what was the point of all this?>> Being that Joe 6 Pack is already up to his eyeballs in debt and is afraid of losing his job (or has already lost it), I doubt that "easy credit" will be the catalyst needed to get him to go out an buy another $40,000 super duper turbo diesel pickup truck. Heck, he is struggling to hold on to the one he bought 2-3 years ago. What J6P needs is more income, not more credit.
Originally Posted By SuperDry <<< What J6P needs is more income, not more credit. >>> There's a difference?
Originally Posted By DyGDisney >>But if you think about it a bit, it does start to make sense. If you have a longstanding customer that's never used more than $10k of their $40k credit line, what's the one situation where they probably would use more than they did historically, perhaps even approaching the full $40k limit? Anyone? Anyone? The answer is if they get into financial trouble and really need the money, which is not at all beyond the possible these days.<< This explanation makes complete sense. I bet it's the reason too.
Originally Posted By fkurucz ++<<< What J6P needs is more income, not more credit. >>> There's a difference? ++ The sad thing is that just two years ago they were considered one and the same. If your house appreciated and you took out a HELOC you weren't "getting into debt", rather you were "liberating your equity", at a teaser rate of 1.5%. Repay the loan? Forget it! That's what refis were for. Loosening credit is just a feeble attempt to respike the housing bubble punch bowl. It won't work. I really wonder what they are going to do? Mail everyone a check for 100K with the stipulation that it can neither be saved nor used to pay off debt? Then, one day, the bubble popped and the "Powers That Be" suddenly realized that all that debt had to be paid back, and that there was no way in Hades that J6P could do it. He was never able to really afford that 400K house and 40K truck on his 60K income.
Originally Posted By SingleParkPassholder So we heard from an Amex supervisor this afternoon. We were reduced because there are too many foreclosures in our neighborhood, not because of anything we've done or not done.
Originally Posted By SuperDry <<< So we heard from an Amex supervisor this afternoon. We were reduced because there are too many foreclosures in our neighborhood, not because of anything we've done or not done. >>> Interesting. It's also been in the news that shopping at certain merchants is a factor in Amex making credit-reduction decisions. They definitely have a reputation of using some of the more advanced algorithms in making credit decisions, which results in them also having a reputation of reducing credit of customers in good standing more than others.
Originally Posted By Mr X Too many foreclosures in your neighborhood? I understand all the reasons SD mentioned, even as far as particular merchants are concerned since they are observing YOUR personal behavior (I would be wary about extending more credit to a customer who was using their card to pay for lots of groceries and beer, for example, while only paying off the minimum every month though I know that's not an issue with Amex), but this particular excuse smacks of unfairness to me. What do YOU, the customer, have to do with what those who live near you? Is it fair to withhold credit to an extremely credit worthy individual with a perfect "record" who just happens to want to live in the old family home which now unfortunately exists in a downtrodden neighborhood? I suppose that's all in the fine print, but it doesn't seem fair at all to me (the other stuff SD talked about does seem fair, since it's all based on YOUR personal actions including the comment about a customer who rarely if ever uses even 25% of their credit line).
Originally Posted By fkurucz ^^Not only that, but I recall reading that people are chosing to pay the CC's first, mortgage second.
Originally Posted By barboy ///Not only that, but I recall reading that people are chosing to pay the CC's first, mortgage second./// If true, then that might be the most flagrant indicator of how deeply messed up our economy really is. ---such interesting times we live in.... So folk are now paying the unsecured debt before the secured.
Originally Posted By SingleParkPassholder "What do YOU, the customer, have to do with what those who live near you?" They think, since there are people in my zip code who have gone into foreclosure, that it is likely I will too, despite my FICO score, credit history and lack of balance with them. Therefore, they're being proactive.
