Amex Reevaluating Their Credit Risk Ratings
MSNBC released an article today discussing how American Express is reevaluating how they rate consumer credit risk, in terms of issuing credit limits. Apparently Amex is now taking a lot of things into account, when issuing credit lines, including geographic region, home prices, mortgages, and specific places where they shop. Also, it appears that 50% of their credit line adjustments are now lowering a credit line, where they used to be just 20% before. I reported awhile back about cards being declined (including Centurions) and credit limits lowered, but it appears we could see a new round, or much larger dosage of this.
I have also heard a lot of buzz on flyertalk forums and a few others, about business accounts being put under financial review and frozen by Amex, and Consumer credit lines being slashed. Has this affected anyone recently?
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Comments
i dont see why they would cap spending on either plat or black cards, u have to pay them back each month so why would they care how much u spend? assuming u pay them off on time i wouldn’t think amex would have a problem.
Benefit Update: The Domestic Airline Program has been cancelled effective November 15, 2008. No more 2 for 1 airline tickets. This applies to the Platinum Card as well.
that really pisses me off, i dont take advantage of alot of the programs Amex offers but thats the one perk i CAN use….
I was sent three letters over a few month time period lowering my credit line. The problem is that I was given false reasons including that I had public records on my credit report when I had none. I can’t even dispute the information on my credit file because the negative information is not on my credit report. I have been forced to file a lawsuit against Amex, Experian and Credit Expert. Anyone having the same problem can email me at merrimackfire@yahoo.com
As a Business Centurian member (and Platinum before that) Amex reevaluates our line of credit every year. You have to fully document your financial position to garner a large line. Ours is $350k which is the max you can owe at any given time. Given the hassles in past years, I would expect it to be worse in this climate.
Also, I got a letter last week saying they are discontinuing the domestic companion free airfare program. They seem to be chipping away at the benefits.
I note the points made by others but there must be a proportion of those that are defaulting on their payments (probably not centurion holders)
I’m not sure about the situation in the US but I know in the UK any company that extends a line of credit to you can reduce it at any time without giving you a reason why (usually they will say it is as a result of an account review or changes in the lending criteria)
With respect to Tom, I’m not sure what good sueing them will do unless you believe they have entered something on your report which you believe will have damaged your chances of gwtting credit elsewhere but all finance firms are battening down the hatches at the minute, wherever you are in the world.
Indeed it may even lead to them terminating your agreement.
I had a biz platinum for 3 years and have had a centurion card for about one and not once have I had to document anything? They just ran my credit when I got each card and that was it…go figure?
All-in-all, I would not be surprised if credit limits for AMEX Cardmembers are being reduced. In fact, I almost guarantee that it is happening. However, it seems like the article has some facts a little askew, and/or wanted to capitalize on the hysteria in the financial markets and write a related story. I saw the same article the other day too and had a few questions/comments which came to my mind. I want to know what others think.
1. I have NEVER heard of AMEX send a letter to a Charge Cardmember (Platinum or otherwise) telling them that they have reduced spending limit or placed a cap on the product. Perhaps in the case of the man in the article, there are extenuating circumstances which let them to place a limit on his card? (Readers of this site, or keen Cardmembers, should already know that a “No Preset Spending Limit” does not equal unlimited spending anyway…)
1a. Look at the letter which was sent to the man in the article… It is dated Apr 10, 2008. That is almost 6 months ago, which leads me to believe that there is something about his unique situation which led to the cap, rather than an audit of Platinum Members.
2. This guy is running his business spending through his PERSONAL Platinum Card. While not illegal or wrong, I would speculate that if he had actually applied for an OPEN card he would be in better shape.
Curious to hear from others…