American Express

Anonymous · ‎08-25-2010

I first was approved for an American Express card when I joined Costco back in 2005. The limit was $2800 and I soon found myself close to the limit. 2yrs ago I made a concerted effort to pay down my debts and I made a $1000 payment. AmEx immediately revised my limit to $2100. I was angry because I read about utilisation and all that and I was trying to refinance with a better score! Well, this past summer I made another lump sum payment, then they lowered my limit again!!!

I am extremely angry and what they are doing should be illegal. If they don't want my as a customer, they should close the account and ask me to pay it off (which I am doing anyway!)

Isn't it illegal to lower a customer's limit without adequate notification? like 30-45days?

davidsawsparks · ‎08-25-2010

I know that have to notify you 45 days prior to an interest rate increase per the new CC rules... but I don't know what the policy is for CLD.

davidsawsparks · ‎08-25-2010

This is information quoted from another website I was reading...

"The amount of time before a change to the terms of your credit agreement must be sent depends on your agreement; I encourage you to obtain and review a copy. However, the credit limit provided to you is not a “term” of your agreement with the credit card lender, so no notice usually needs to be given for the creditor to change the credit limit. Generally, agreements state that the creditor will provide credit at an amount to be determined by the creditor. I would be very surprised if your agreement required the creditor to provide a set credit limit."

Anonymous · ‎08-25-2010

My score is in the tank while I fight with Wells Fargo over my mortgage, but I thought credit card co's couldn't adjust your terms based on other slow pays. Plus how is the credit limit not a "term"?!

davidsawsparks · ‎08-25-2010

@Anonymous wrote:
My score is in the tank while I fight with Wells Fargo over my mortgage, but I thought credit card co's couldn't adjust your terms based on other slow pays. Plus how is the credit limit not a "term"?!

I don't think they adjusted the credit based on slow pay. They prefer you to pay if off slow so they could collect much more interest over time. Given that you just said that your score is in the tank, I'm assuming they probably soft pulled you like they do all their customers and saw something that caused them to decide to CLD. As for the "term". I was only quoting what I had read. Call me crazy but it does make sense to me. The creditors are not obligated to provide you with a set amount of credit. If they were, then everyone would have the same CL in their terms. They provide you with what they feel is appropriate according to your CR and other reasons.

Anonymous · ‎08-25-2010

So I should expect to pay this CC off and have them lower my limit down to $100? or even lower?

What should I do here? I need a good utilisation number. It is the main thing that is (was) killing my score before the mortgage situation. My score was 640 before that whole mess.

Soon I will have Wells Fargo squared away. I plan to keep paying off AMEX, then using that money to pay off my Wells Fargo CC. The goal is to be debt free but also get the credit score up in case I need a car loan. This situation seems extremely unfair, especially since I've NEVER been late with them.

Anonymous · ‎08-25-2010

To be honest with you, don't even bother trying to make large payments. You can even close it if you want to, doesn't much matter any more. But you aren't going to stop a CCC that is balance chasing.

If you have another CC, pay that one off in big chunks instead and it will help your util (assuming they don't balance chase).

As for your comment about a 30-45 day notice before a CLD... Imagine getting a letter in the mail saying that AMEX is going to decrease your credit line from $15,000 to $2,000 in a month because they believe you are a credit risk. Who here wouldn't go out and spend that money before the credit limit is adjusted, even if only out of spite? ;-)

Good luck with your situation!

davidsawsparks · ‎08-25-2010

I agree with Jausanka. I would only make minimum payments on the AMEX until you get everything squared away. Don't close the account though. If you close the account, they may demand payment in full within a very short time frame. I haven't heard of any CCC that will just let you continue to make the minimum payments after the trade line has been closed.

Anonymous · ‎08-25-2010

@davidsawsparks wrote:
I agree with Jausanka. I would only make minimum payments on the AMEX until you get everything squared away. Don't close the account though. If you close the account, they may demand payment in full within a very short time frame. I haven't heard of any CCC that will just let you continue to make the minimum payments after the trade line has been closed.

Any revolving credit card that is closed (IME) will continue on the last agreed upon terms by the CCC and the borrower. If your minimum payments were 2.5% while open, if you close the account, you continue to have 2.5% due. The only thing that changes is that you no longer have your "available credit" available to you.

I closed my Citi Diamond card last year after they attempted a RJ and Balance Chased me to death (from $15,400 to $3,840). I have since been paying minimum payments to them at my previous 7.24%F APR and will continue to do so for as long as it takes. I have plenty of other balances to worry about. Additionally, the credit line remains on my reports and the utilization is factored into my overall util, so it benefits me very little to PIF.

davidsawsparks · ‎08-25-2010

Well that's good to know. I still wouldn't close the account with AMEX. Consider is if you close the account and want to reopen it later, you'd have to incure a hard inquiry and a possible rejection. Why not just keep it open and just make the minimum payments.