It's a shame Amex is doing this to people, but I think this is the tip of the iceberg that's coming. I read a blog a few weeks back from Mish's GlobalEconomicAnalysis (great economic blog!), which mentioned an Oppenheimer banking analyst said the impact of recent regulatory proposals on lender profits would be so severe, that she expects banks to cut $2 trillion in credit card lines to the public by 2010. That's about 45% of the available credit card lines outstanding to US consumers, folks. Think for a second what that means to you and me and our credit lines!
If this is even close to being the case, well, in a nutshell...expect more credit card companies to follow Amex's lead fairly soon in chasing down balances and/or closing accounts. Some others are doing it already, of course, but nothing close to what Amex is doing. As far as people suggesting that someone keep a tiny revolving balance on a card to prevent it from closing, I don't think that's going to work for very long. Once you're "targeted" for closure for whatever reason, they're going to close your account regardless. They'll just ask for the final balance to be paid immediately, say thanks and have a good day, most likely.
There has never been a better time to keep your cc utilization levels low, keep making payments on time, and keep those FICO scores as high as possible. That still may not be enough, as some are finding out, but it's your best shot at keeping those nice credit lines intact.
Message Edited by TangMeister on 07-12-2008 03:56 PM
