American Express unexpectedly lowers credit limit, loses life-long customer
I’ve been an American Express customer for nearly 10 years. No, “customer” isn’t quite the right word – I’ve been more of an American Express “evangelist.” I use my AMEX exclusively. I shy away from businesses that don’t accept American Express. I am always telling my friends about the benefits of American Express – from automatic warranty extensions to their no-questions-asked charge dispute approach. Also, as a small business owner, I also choose to pay higher fees to accept American Express cards than I do to accept Visa and Mastercard. (They make merchants sign a separate, more stringent, more expensive, agreement.)
But all of that changed today – as of today, American Express and I are no more. We’re done, we’re over, we’re through. I wish them the best, but I just can’t continue in this relationship.
I currently have two AMEX cards – an AMEX Blue and a Costco TrueEarnings Business Card, with limits of $10,000 and $25,000, respectively. I spend about $2,000 per month on my AMEX, and I’ve always paid my bills in-full and on-time. As of 10 minutes ago, my FICO (FAKO?) scores were all around 740 or higher. (Credit scores courtesy of the $11.99/month American Express “Credit Secure” service that I subscribed to until about 10 minutes ago.) I have very little non-student loan debt. A pretty good credit profile, right? I thought so.
So imagine my surprise when I received the call telling me that American Express had “reviewed my account” and decided to slash the credit limit on my Costco TrueEarnings card by 75%. The stated reason: Over the last 3 months, I ran up a balance of $4,500, and made only the minimum payment on the card. They also noticed a few new “inquiries” from other creditors. I explained that I had recently purchased a house, and that was the source of both the inquiries and the minimum payments – my mortgage company chose to pull my credit report several times, and I chose to stay cash-heavy during the process so I could make a larger down payment. Rest assured, I told them, I’ll be paying off the card in full this month.
“Thanks!” multiple levels of customer support told me, “but we’re still cutting your credit limit.” As I pushed each for reconsideration, they told me that my only option was to send in a copy of my credit score and “file an appeal” with their “review department.”
Really? You want me to BEG for the privilege of using your card? Sorry, AMEX, but I have another option – I can cut up my American Express cards, use a different card (Visa, Mastercard, Discover, anyone?) for my daily spending, and stop accepting American Express at my business. I think I’ll go that route instead. You know, I think I’m going to cancel my Costco membership as well. Sam’s Club has better prices anyway.
“But it’s not personal, sir.” Isn’t it? You’ve spent millions of dollars marketing yourself as my “trusted partner,” telling me that we’re friends and that you’re looking out for me. But you’ve been lying through your teeth. What a fool I’ve been. Your credit limits and minimum payment amounts mean nothing. Sorry, AMEX, but I need a partner I can rely on. And after this incident, I just can’t trust you.
Superior customer service used to set American Express apart. Now that that’s gone, the only things distinguishing them are a yearly fee and the shrinking number of merchants who accept AMEX.
Good luck with that, guys.
I’m not the only one affected by this practice.
Planet Feedback has tons of complaints
Consumerist is full of American Express complaints.
Compaints Board – Full of complaints.
Got more stories? Post ‘em in the comments.
August 20th, 2009 at 11:45 am
Hey I know how frustrated you are! I recently found out that my Home depot card credit had been cut in half due to a recent “credit review”. Nothing in my financial standings has changed, and this despite the fact that I had paid off the bill in full two months earlier and now had less than 100 dollars in current debt with them. I have now paid the bill off and called to cancel my card. I think the 28.8% interest would be enough to motivate anyone to pay off their bills without worrying about having their credit reduced!
September 1st, 2009 at 5:15 pm
Recently American express reduced my limit on my Blue card from over $10K to $1000. No explanation.
I had been a customer of AMEX for decades. After making what was supposed to be a full payment (about $60) for June, a $2 “finance charge” was mysteriously added to my statement AFTER I made the payment. As I had not used the card since then, I had no reason to check my statement for July. In early August I received a “past due” notice by email for the $2 which I promptly paid. Within days, while making a purchase, I found that the card had been canceled without warning. This was about a week after receiving a statement showing the $2 payment and a zero balance along with my substantial $1,000 credit limit. At least they didn’t charge a late fee.
I have no reason to contact them again, ever. How they can possibly stay in business is beyond my comprehension
September 23rd, 2009 at 7:33 am
I’m glad you closed the account, they did the same thing to me a while back! I too was a good customer and they cut my credit line down to 500!
HS
September 26th, 2009 at 9:27 pm
I was an AMEX customer for 18 years. I paid my bills on time all the time. Early this year they reviewed my credit and determined that they should put a freeze on my account until it was paid in full. I had about $2000 on my sign and travel which I was paying in substantial chunks, relative to the balance, each month. I have been through the ringer with them since then. Because of their actions my credit score has been reduced from the low 700’s to the low 600’s by now reporting me as a charge off, despite that I have been paying them every month per the terms of our agreement to bring my account to zero. When I questioned them on this they said that “charge off” was a term they use for an account that is over 5 months late (despite that I’ve met the terms of our agreement by paying the agreed up on amount each month). When I told them that it was not a universally accepted term of merely being late, but that most creditors saw it as an account having been unpaid and written off, they said they couldn’t be responsible for whatever other lenders did but that was how they chose to use that term. I am now backed into a corner with no place to go. I continue to pay them as agreed and they continue to ruin my credit. I hate American Express. They flushed an 18 year relationship, one that was beneficial to both parties, down the drain. I hope they end up folding. They are a perfect example of how not to treat your customers.
October 20th, 2009 at 6:02 pm
And here is my Story
November 14th, 2009 at 6:42 pm
same thing is happening to me! i’ve been paying the balance on time and in full but they still need to review my credit and suspended both of my cards! i’m closing both cards immediately. they will lose their valued customers if they do not stop this annoying system.
December 9th, 2009 at 9:29 pm
[...] downs in volume and in profit margins. American Express, my preferred credit card company, even cut the limits on loyal customers while terminating accounts on [...]
December 15th, 2009 at 3:06 pm
I know how the rest of you feel. I just got my card canceled, because I missed a payment. Some how on my last statement I stilled owed .38 Yes 38 Cents. I missed that payment and now I am canceled. Thank American Express I just got a better card with a better deal.
I would not laugh to hard at this, If you have american express you might just be nexted.
February 6th, 2010 at 2:58 am
I got a letter a few months ago that American Express was lowering my limit on my OPEN Simply Cash silver card from $20,900 to $12,000 or $8,000, I forget, and that it was already done, I think it was. There was a number on the letter (their credit department – not customer service – ask for credit department’s number), and I called and they said I was not using the high amount. I said that I might make big purchases, and didn’t want to have to worry about it, I said I wondered what would it do to my credit, and they offered to put it back where it was, so I said ok. They did. I do have Blue, Clear, Hilton, and the Simply Cash silver card. I do pay them in full, though. If I ever see a missed payment, etc., I CALL THEM immediately. Do not just make the payment. You should have called right away when you realized you missed a payment, even .38 (if you didn’t). Also, when you apply for credit anywhere, the application has your current income, etc., so the card companies find out what is going on at that point. Until you apply for credit somewhere, the credit bureau’s don’t even know if you are out of a job or broke (is how I think it works), unless you miss payments. Sorry, but I love my Amex OPEN Simply Cash that gives 3% back on gas, and 1% otherwise. They also paid me $50 last year or so ago to keep using the card (OPEN has its own people) when I complained that they lowered the gas from 5% to 3%. Turns out Chase went 5% to 3% too, so I would have come back anyway. But as I say, I pay in full. Some of their cards require it, even if there is interest charged, etc.
My friend got the card I have, at my suggestion, and I believe he said it saved him $800 in rebates so far. I’ll find out when I apply for a mortgage next time, if it all caves in on me. Hope not. Ask for the credit department, and Good luck!
February 6th, 2010 at 3:16 am
By the way, the sign and travel thing – they might be putting your payment against the recent charges, and not posting against that outstanding sign and travel balance. Otherwise, I can’t see how you could be 5 months past due. But actually, I had them remove that feature from my account, since there was confusion over how to pay the sign and travel.
In any case, you need to do whatever they say is required to get the payments current to get your score back up. I suggest that some of you might want to do a balance transfer from a mastercard or visa to pay of the amex card if it is in trouble, but it will cost you a 3% or 4% fee plus the interest. Good Luck, again.
P.S. They all look at your ratio of all balances to all credit lines and whether any card is within 75% of the limit (don’t take this number as gospel), and how long the cards have been open, so in many cases, if you cancel a card, especially an old one, it lowers your credit score, so look out there. Also, the credit inquiries stay on the bureau for 2 years, then drop off. There was also a situation after 911 where banks did a hard inquiry when you opened a new account with them, but I think that was corrected a couple of years ago, though the inquiries might be just now dropping off. I had one removed in the past, via complaint to a bureau. A bureau lady actually helped me. Sometimes I get lucky. Hope all this helps.