American Express Paying Dearly for all the SUB Prime Credit Accounts

[Anonymous]

I don't know about their feelings on sub prime, but they did CLD me.  Went to put a measly $459.00 charge on it and was declined.  Now a credit card company only embarrasses me one time. 

I called em up and asked why the decline when I have 4500.00 limit with a grand total of 402 and change on it.  The rep said "Oh you probably haven't gotten the letter yet. but we reduced your line of credit"

After 10 mins of trying to figure out why and not getting a real answer I fired them.  I asked her to take a payment over the phone that zero'd out the balance.  Then I told her to close the account as it doesn't work for me.

Sometimes I think we approach these things from the wrong perspective.  We tend to say "How much will they give me" and "Can I get approved". 

I worked hard to get myself back to where I am now and I won't approach a CCC in that fashion ever again.  I am the customer and it's my money they want.  And if they want to play hardball thats fine with me, they can do it with someone else's money.

Just my 2 pennies worth on the whole Amex thing.

Van

[Watchmann]

No doubt AMEX, like almost every other card issuer and bank, went overboard with the cheap credit that was available to them, lot's of it courtesy of Greenspan and company who kept interest rates too low for too long.  If they didn't lend somebody else would, so they had to jump on the bandwagon to keep competitive.  But the decision was theres, so they have to wear the consequences.  Hindsight is always 20:20.

Yes, AMEX used to be exclusive and difficult to get.  Back in the day, when I first got an AMEX Gold Card in 1980 the standards were high, they only approved those in the top 5% of the credit spectrum.  That was how it was advertised.  And it really carried cache to have an AMEX card, especially a Gold card.  Today, kids coming out of school routinely get Gold and Platinum cards.  It means nothing anymore.  AMEX needs to cut out the deadwood and reposition the whole American Express brand as it has been cheapened over the last decade.  It used to stand for affluence and a 'I've arrived' statement.  Now it stands for, what? 

[jmbfl]

AMEX lost it's cache when it started issuing credit cards! I go back to the time of charge cards only, when a GOLD AMEX CARD really meant something!

[Anonymous]

---

@KingAdrock wrote:
While Amex did loosen up their standards a bit, I don't think any of their products have been considered sub-prime. I think you're jumping the gun by saying Amex is going back to being exclusive. They're tightening their belt because things are bad, just like every other lender. They could and way very well just loosen it again when the ecomomy improves.

---

I expect that because of their aproach and lack of any kind of cander in all this that AmX has seriously damaged their reputation and have gone from most trusted to seriously not trusted over-night. For me there has never been any great advantage to owning an AmX account but it is for darned sure I will never aply with them now.

[Anonymous]

---

@fused wrote:
ddd, can you please share the source (a link) of your info? Specifically, Amex's intention to cut 7000 jobs, thank you.

---

True Fused. I read a large article on it yesterday on MSN. 7000 jobs or 10% of its international work force. The article explained many rather drastic and lesser dramatic cost cutting measures AmX is taking to survive this credit crunch. The article goes on to explain what they've been doing to John Public lately as well.

http://news.moneycentral.msn.com/provider/providerarticle.aspx?feed=AP&date=20081030&id=9336198

Message Edited by beenthere on 10-31-2008 06:05 AM

[jaxstraw]

Unfortunately I'm under the impression that this is mainly a FICO-ite and/or credit type informed person issue.

Almost a tempest in a teacup.

While it's a major topic here and at other credit sites, to a majority of AMEX CC card holders they know nothing of this nor have they had their CL slashed or cancelled.

When I ask my family and freinds about Amex's recent policies they are surprised but have had nothing happen to them or anyone they know. They might have seen a blurb in the paper or on their homepage but unlike us they skip over it to whatever their interest's are.

We are an extemely small percentage of Amex cardholders that frequent these sites. Out of that amount of Amex cardholders the number of people here who have had adverse policy change actions against them is really miniscule.

I'm not really good with stats but the way I'm kind of seeing it is maybe 20 people here have had a CLD/CANCEL Amex experience recently. I'm guessing there are over 500 regular site members who touch base here. Obviously some much more frequent than others. That's about 4%.

Even if you lower that number to 200 regular Fico-ites, it's still only 10%.

That is not a huge number of customers who are getting screwed over. It's actually small and probably about right for Amex to cut back, retain their viability, keep there good name, and make profit.

While I agree they are doing this in a capricious and unjustified manner in many cases, I just don't see it being a massive  campaign of reducing /cancelling customers accounts. 

Maybe I'm wrong, possibly my numbers are skewed, but we here live in a world where these are major issues because we make them so. Ask some of your freinds and family who don't live on these boards what they know and if they know anyone who has been zapped by Amex recently.

You'll most likely get the same answer and shrugs that I did.

 I feel for anyone who this has happened to and I don't mean to anger them, my apologies if I did. Like I said, I could be wrong.

But if you go by this model they are definately not sub-prime.

Jax

[MidnightVoice]

---

@jaxstraw wrote:

That is not a huge number of customers who are getting screwed over. It's actually small and probably about right for Amex to cut back, retain their viability, keep there good name, and make profit.

---

Amex has said that under normal conditions, 80% of their credit line adjustments have been CLIs.  Under curreent condirions it is 50%.

So CLDs have gone from 20% of adjustments to 50% of adjustments.

I do not know if the number of adjustments per year has imcreased, but even without that it is a fairly significant shift

[jaxstraw]

Significant yes, but the key word her is 'adjustments'.

That is only accounting for CC's that are in an adjustment stage. This doesn't account for all the CC's that are in a static stage.

Which is most of their accounts. 

The question is then really, what is the ratio of adjustment to static ?? 

Once again, just ask anyone who has an Amex that you know (besides us here) and they most likely have not been touched nor know anyone who has.

Message Edited by jaxstraw on 10-31-2008 06:47 AM

[Anonymous]

---

@Anonymous wrote:

I don't know about their feelings on sub prime, but they did CLD me.  Went to put a measly $459.00 charge on it and was declined.  Now a credit card company only embarrasses me one time. 

I called em up and asked why the decline when I have 4500.00 limit with a grand total of 402 and change on it.  The rep said "Oh you probably haven't gotten the letter yet. but we reduced your line of credit"

After 10 mins of trying to figure out why and not getting a real answer I fired them.  I asked her to take a payment over the phone that zero'd out the balance.  Then I told her to close the account as it doesn't work for me.

Sometimes I think we approach these things from the wrong perspective.  We tend to say "How much will they give me" and "Can I get approved". 

I worked hard to get myself back to where I am now and I won't approach a CCC in that fashion ever again.  I am the customer and it's my money they want.  And if they want to play hardball thats fine with me, they can do it with someone else's money.

Just my 2 pennies worth on the whole Amex thing.

Van

---

I would have done the SAME exact thing actually I did that with Chase Southwest about 1 year ago. I was paying at Lens Crafter for some Sunglasses and my Card was denied for like $270.00. I had a 3k limit and the Card was clean (No Balance). I got so mad I canceld on the spot but then I regreted closing the card. They did not approve because the card was not used in a long time so they thought it a fradulent charge.

[Anonymous]

---

@Watchmann wrote:

No doubt AMEX, like almost every other card issuer and bank, went overboard with the cheap credit that was available to them, lot's of it courtesy of Greenspan and company who kept interest rates too low for too long.  If they didn't lend somebody else would, so they had to jump on the bandwagon to keep competitive.  But the decision was theres, so they have to wear the consequences.  Hindsight is always 20:20.

Yes, AMEX used to be exclusive and difficult to get.  Back in the day, when I first got an AMEX Gold Card in 1980 the standards were high, they only approved those in the top 5% of the credit spectrum.  That was how it was advertised.  And it really carried cache to have an AMEX card, especially a Gold card.  Today, kids coming out of school routinely get Gold and Platinum cards.  It means nothing anymore.  AMEX needs to cut out the deadwood and reposition the whole American Express brand as it has been cheapened over the last decade.  It used to stand for affluence and a 'I've arrived' statement.  Now it stands for, what? 

---

I have been saying this FOREVER. I completley agree all you need to do is apply and pay AF and your in there is ZERO other requirements. It yout to take time for Amex to verify your income and it was truly a financial acommplishment. Thats what people dont understand it's not about flashing a Platinum Amex it's about you being rewarded for your financial responsibility. You have these threads were people after banruptcy got approved for Green and the call CS and ask for a Plat and they get it. They pay $450 AF just so they can feel better about themselves. American Express has paid dearly for this look at the numbers they dont lie. The Sub prme anyone can get a card lending cost 7000 people their jobs.