Reply
Member
smon1234
Posts: 5
Registered: ‎06-06-2008
0

American Express cancelled my account

First and fore most. I'm new here so if something sounds wrong don't go to hard on me.

 

I got my 1st Amex Blue card in March of 2008. CL of $1100. Yesterday I get a letter in the mail form them saying that after a recent review, my account has been cancelled. 

 

In the letter, the reasons being are; 

 

  •  I have high debt with other creditors relative to my total available credit.

(Why do they take into consideration my other accounts when I've been excellent with theirs? My credit history is atleast 4 years old now and I have NEVER missed a payment and ALWAYS have paid more than the minimum on ALL my credit cards.)  What is the point of credit if when you use it its going to look bad? It shouldn't matter cause I make enough money to pay them off when I feel like it. Technically it defeats the purpose of even having credit.

 

  • Your consumer credit bureau score
I have not had anything below 635 ever. The only reason it is low is because maybe owing 50% of my total credit is bad? This is ridiculous.

  • The average amount of payments in relation to your overall balance on your American express account has been to low.
So IM not paying enough to amex? That's crap. I've always paid more than the minimum and I had just paid $1000 last month to them. If that's the case why even have a credit card with the option to carry a balance with a minimum payment. It defeats the purpose of even having a minimum amount due.

  • My monthly payments are to low in relation to my outstanding debt on ALL my credit card accounts.

Once again, why do my other cards matter to them? It shouldn't and like I said earlier, I've never missed a payment and have always paid more than the minimum and I get paid well enough to make my payments on time with more than the minimum. I have never defaulted on any of my accounts. 

 

The best part is coming up. In the bottom of the letter it states that the cancellation of this account under these circumstances may result in a negative reporting of this account to the consumer reporting agencies, additionally, if you do not pay your account, your account may be referred to a collection agency.

 

What should I do? Should I call them and harass them until I get to talk to someone in charge and TRY to get it resolved or what? This shouldn't be allowed and for that to have a negative impact on my credit should even be considered illegal.  I don't want to let this go that easily and let them get away with this. 
Super Contributor
MidnightVoice
Posts: 8,157
Registered: ‎03-25-2007

Re: American Express cancelled my account

Due to the credit crunch Amex is doing this a lot.  Some other companies are doing it as well.  I am afraid it is legal, and their comments are based on statistics - people who carry large balances are more likely to default than those that carry small balances, and people who carry large balalances on multiple cards are more likely to default.

 

As you have the funds, your best bet may be pay it off.

The slide from grace is really more like gliding
And I've found the trick is not to stop the sliding
But to find a graceful way of staying slid
Member
smon1234
Posts: 5
Registered: ‎06-06-2008

Re: American Express cancelled my account

I understand but it is still nonsense. If most companies now are going to base their accounts on statistics, why even have a individual credit report for people. Apparently your credit history doesn't matter to them anymore.
Established Contributor
woopah
Posts: 721
Registered: ‎03-15-2008

Re: American Express cancelled my account

Unfortunately, it's not illegal.  Amex is not a company you want to carry a balance with, especially now.  I have heard from others that if you carry a balance with Amex, they want you to PIF in no more than three months and that if you don't you are considered a higher risk. 

 

As MidnightVoice stated, Amex is looking at you as a risk because people with high balances on multiple cards are more likely to default.  Amex is also CLDing and chasing the balance with a lot of Amex customers who have been so for years and have perfect payment history with Amex. 

 

Creditors want you to use your available credit, but any useage of 10% or more the person can be considered a risk, especially if that is 50% or more.  They prefer you use your credit and PIF if not every month than within 2-3 months at the most.  Having 50% of your available credit used makes you appear risky, regardless of if you pay more than the minimum and pay on time every time.  

 

I personally don't think it's fair either, but it's legal.  The best thing you can do right now, for yourself and your credit score is to pay as much of especially Amex as fast as you can, but also to pay down everything else.  With Amex closing your account with a balance you may soon start seeing AA's from your other creditors.

4/16/09: TU: 775, EQ: 805
2/11/09: TU: 773, EQ: 790, EX:790
11/16/08: TU: 773, EQ: 785, EX: 780
Goals for 2009: 0 Credit Card Debt & 0% Util (achieved 2/6/09), Mortgage! (achieved 11/2/09), getting closer to 800 scores (I crossed this earlier this year, but I'm sure I'm not there anymore!)
Member
smon1234
Posts: 5
Registered: ‎06-06-2008
0

Re: American Express cancelled my account

So amex cancels my account. What kind of AA will other creditors try to take? So my credit history goes down the drain because amex wants to base their decisions on statistics. Now all creditors will see me as a risk? There has to be something wrong here.
Super Contributor
MidnightVoice
Posts: 8,157
Registered: ‎03-25-2007

Re: American Express cancelled my account


smon1234 wrote:
So amex cancels my account. What kind of AA will other creditors try to take? So my credit history goes down the drain because amex wants to base their decisions on statistics. Now all creditors will see me as a risk? There has to be something wrong here.

 

Credit has been based on statistics for many years, and has good and bad points

The slide from grace is really more like gliding
And I've found the trick is not to stop the sliding
But to find a graceful way of staying slid
Established Contributor
woopah
Posts: 721
Registered: ‎03-15-2008

Re: American Express cancelled my account

Your Amex reports as closed with a balance, your util % goes way out, because at that point your are essentially 100% maxed out on your card and that is very bad for your FICO scores.  Once other Creditors see this, they may: ratejack your APR -- bad for your wallet, CLD you -- bad for your Util% and your FICO scores, close your cards bad for your util % and your FICO scores.  CLDing you and closing your cards can set you into a very quick cycle of having other cards do the same, until your FICO scores are very low. 

 

Which is why: do what you can to PIF your Amex.

4/16/09: TU: 775, EQ: 805
2/11/09: TU: 773, EQ: 790, EX:790
11/16/08: TU: 773, EQ: 785, EX: 780
Goals for 2009: 0 Credit Card Debt & 0% Util (achieved 2/6/09), Mortgage! (achieved 11/2/09), getting closer to 800 scores (I crossed this earlier this year, but I'm sure I'm not there anymore!)
Established Contributor
Chopbrocoli
Posts: 805
Registered: ‎05-11-2007
0

Re: American Express cancelled my account

Sorry to hear. As Warren Buffet quoted.. "Beware of geeks bearing formulas." AMEX's risk analytic system is quite flawed and has lossed many valuable card members from Blue to Centurion. Hopefully someday they will losen up like they used to be back in the old days.
AMEX Gold Premier Rewards | SPG AMEX | Bank of America Power Rewards | Merrill Plus | United Presidential Plus | Saks World Elite
Senior Contributor
score_building
Posts: 3,561
Registered: ‎01-10-2008

Re: American Express cancelled my account

[ Edited ]

smon1234 wrote:
So amex cancels my account. What kind of AA will other creditors try to take? So my credit history goes down the drain because amex wants to base their decisions on statistics. Now all creditors will see me as a risk? There has to be something wrong here.

i am sorry this happened to you but CLD's and account closures for the reasons they provided have become more frequent during this credit crunch and will likely continue to escalate before things get better.

 

since you mentioned you are able to pif, this closure by issuer should have a relatively minor effect on your fico score and may not lead to AA from other creditors.  the score impact stems primarily from the loss of the credit line leading to an increase in overall utilization.  it does seem unfair but these actions are being taken against many thousands of their card holders, many with good payment histories. 

 

the terms and conditions that we agree to with ccc's typically afford the issuer the legal right to close or CLD the account of a card holder for any reason at any time with proper notice.  just remember you may be able to do a good deal of damage control on util via cli's from other creditors if you're eligible.  perhaps a good time to make requests for increases may be after you pif your accounts or at least lower any blances if that is what you intend to do.

 

a closure can have a significant score impact and perhaps attract the attention of other creditors quicker if you are unable to pif to bring the acct balance to zero.  a closed account with a balance is always to be avoided if possible since it can also be worrisome to other creditors who may in turn enact AA in the form of a CLD or account closing. 

 

ETA:  Cleanmachine yes, my understanding is also that the score impact is the same whether the acct is closed by the card holder or issuer and it is casued by the drop in util.  in this thread the OP was speaking of a closure by creditor so that is what i referenced initially (but not to the exclusion of an account closed by card holder which would apparently have same effect on util).  i removed the reference to 'issuer closure' so as not to cause further confusion. 

Message Edited by score_building on 01-05-2009 08:38 PM
FICOS:
06/13 EX 765 (PSECU) EQ 771 (DCU) TU 779 (Barclays)
Frequent Contributor
Cleanmachine
Posts: 399
Registered: ‎04-30-2008

Re: American Express cancelled my account

It is my understanding that accounts closed by Issuer or Consumer has no impact on credit score.

 

The only impact would be the overall utilization of debt to credit limit that is reported.


myFICO is the consumer division of FICO. Since its introduction 20 years ago, the FICO® Score has become a global standard for measuring credit risk in the banking, mortgage, credit card, auto and retail industries. 90 of the top 100 largest U.S. financial institutions use the FICO Score to make consumer credit decisions.

>> About myFICO
FICO Score - The Score that matters
Click to Verify - This site chose VeriSign SSL for secure e-commerce and confidential communications.
Fair Isaac Corporation is a BBB Accredited Financial Service in San Rafael, CA
FOLLOW US Social Media Facebook Twitter Pinterest Google+
}