Breaking AmEx ??

[NonSufficientFunds]

I remember reading somewhere on this forum, something about “breaking-in” a new AmEx card (something to do with Nordstrom and Starbucks).

Forgive me if this is a tired topic, but I am quite curious.  I have tried the search tool, but cannot find the relevant thread. 

Can someone tell me what the term ‘breaking-in’ means, as it relates to a brand new American Express card account?

[Mailak]

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@NonSufficientFunds wrote:

I remember reading somewhere on this forum, something about “breaking-in” a new AmEx card (something to do with Nordstrom and Starbucks).

Forgive me if this is a tired topic, but I am quite curious.  I have tried the search tool, but cannot find the relevant thread. 

Can someone tell me what the term ‘breaking-in’ means, as it relates to a brand new American Express card account?

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Some people seem to think that credit cards, especially an American Express, needs to be broken in like a shoe i.e. start with small purchases and over a month or two, keep on increasing the size of purchases till you arrive at the level of your normal spending pattern. This supposedly allows American Express to learn your spending patterns.

I think it is a bunch of baloney. If you want somebody to learn your spending patterns, you should spend in your normal pattern rather than spending low amounts which do not reflect your pattern. Spend on what you want and what you like - that shows the company what your spending pattern is like. That's my personal take. I didn't vary my spending behavior.

[LS2982]

Its all nonsense. Use the card like you would normally do. All AMEX cares about is that bill being paid. Pay them and they're happy.

[Open123]

How a new card member ramps up using a charge card is highly dependent on the background of the user.

For instance, let’s take a look a few different profiles:

1. Very young person fresh out of college with no employment history and thin credit profile with a couple of small toy limits cards from college.
2. Person in college with no income (or minimal form part time work) applying for a charge card only for the bonus and manufactured spending.
3. Professional with 10 year work history thick profile and documented spending of “X” amount over the years.
4. Long tenured Amex card member for 15+ years.

Obviously, for an NPSL, the advice to “ramp” up the use of a charge card would be most applicable to persons in category 1 and 2.  Now, I don’t mean charging $1k - $2k (for charges this small, Amex’s only requirements are the card member has a pulse and has at least filed a tax return of some kind), which wouldn’t pose any issues aside from fraud concerns.  What am I suggesting is for a person in this category, before making a $10K charge, it may be prudent to “work” up to it over a span of several months, especially if the person has never had a CL even remotely close to $10k.

For a person in category 3, whose documented income for the past 10 years would average $100k, with a thick credit file and a history of charging and paying off $30K charges per year, no ramp up is necessary.  However, if making a one-time $30K charge (tax payment for instance), it would be prudent to do so after a few months have passed.

For person # 4, depending on the relationship and history, he can likely charge $50K right off the bat on day one.

Regarding first purchase modeling, during the credit crisis, some industry insiders revealed in a series of interviews that part of the statistics they track were “first” purchases.  In some cases, future CLs were determined in part by a “first” purchase.  No one knows for certain, whether this is true, false or willing misinformation.

Per the old adage, “I’ve don’t believe in ghosts, but have been afraid of them all my life.”  All things being equal, if I go to Starbucks every day for coffee, how inconvenient would it be to make a first charge for a cup of coffee before charging up a storm at dubious establishments such as Hulga’s House of Pain?  Even if there were no truth or first purchase modeling is no longer practiced, what is the downside of just making a first charge at Starbucks?

People who just want to temp fate for the sake of…well…tempting fate are people who just want to make a point for the sake of making a point.  For instance, it’s against every CC agreement to check ID.  When I’m asked, I just show mine (if I have it, but if I don’t, then it’s a different issue where I’ll just call my CC and have the merchant speak with them directly) though I’m not a proponent of the practice; I just show it rather than making a point for the sake of making a point.

[jsickz32]

All my amexs got "broken in" at the strip club

[LS2982]

@jsickz AMEX luvs them dranks!!!!

[jsickz32]

And the random $100 "services" charges lol

[LS2982]

LOL!!!

Your gonna get FR'd for them "services" one day lmao

[webhopper]

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@Open123 wrote:

How a new card member ramps up using a charge card is highly dependent on the background of the user.

For instance, let’s take a look a few different profiles:

1. Very young person fresh out of college with no employment history and thin credit profile with a couple of small toy limits cards from college.
2. Person in college with no income (or minimal form part time work) applying for a charge card only for the bonus and manufactured spending.
3. Professional with 10 year work history thick profile and documented spending of “X” amount over the years.
4. Long tenured Amex card member for 15+ years.

Obviously, for an NPSL, the advice to “ramp” up the use of a charge card would be most applicable to persons in category 1 and 2.  Now, I don’t mean charging $1k - $2k (for charges this small, Amex’s only requirements are the card member has a pulse and has at least filed a tax return of some kind), which wouldn’t pose any issues aside from fraud concerns.  What am I suggesting is for a person in this category, before making a $10K charge, it may be prudent to “work” up to it over a span of several months, especially if the person has never had a CL even remotely close to $10k.

For a person in category 3, whose documented income for the past 10 years would average $100k, with a thick credit file and a history of charging and paying off $30K charges per year, no ramp up is necessary.  However, if making a one-time $30K charge (tax payment for instance), it would be prudent to do so after a few months have passed.

For person # 4, depending on the relationship and history, he can likely charge $50K right off the bat on day one.

Regarding first purchase modeling, during the credit crisis, some industry insiders revealed in a series of interviews that part of the statistics they track were “first” purchases.  In some cases, future CLs were determined in part by a “first” purchase.  No one knows for certain, whether this is true, false or willing misinformation.

Per the old adage, “I’ve don’t believe in ghosts, but have been afraid of them all my life.”  All things being equal, if I go to Starbucks every day for coffee, how inconvenient would it be to make a first charge for a cup of coffee before charging up a storm at dubious establishments such as Hulga’s House of Pain?  Even if there were no truth or first purchase modeling is no longer practiced, what is the downside of just making a first charge at Starbucks?

People who just want to temp fate for the sake of…well…tempting fate are people who just want to make a point for the sake of making a point.  For instance, it’s against every CC agreement to check ID.  When I’m asked, I just show mine (if I have it, but if I don’t, then it’s a different issue where I’ll just call my CC and have the merchant speak with them directly) though I’m not a proponent of the practice; I just show it rather than making a point for the sake of making a point.

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I ramped up my spending on Zync card..

started out spending less than 2k,  then after a few months went to 3k then 4k, then stopped when I got to 6k.

Then got PRG in Jan and did a 10k charge with no prob in Feb. No ramping required.  Also got an Amex business revolver in Jan, approved for 22k

Income over 100k, thick file. My other card limits were really low when I first got zync