topic Re: Amex FR Fallout in Credit Cards

Amex FR Fallout

Charger_Fan19 — Mon, 23 Mar 2015 16:09:25 GMT

I was an AU on my mom's amex account. That account was canceled this summer because she opted to not deal with the financial review process. After 30 years of being a cardholder she was pretty angry about them demanding tax returns and bank statements. She told them to shove it. As a result, all the pay over time charges came due immediatiely and lost their promotional interest rates. I'm trying to get things paid down as quickly as possible but lately have only been able to make the min payments because of other obligations. Not recieveing statements I had no idea that the card had defaulted to a 29% interest rate. I'm not making any dent in the principle. As an AU I can't call them directly but does anyone have any advice for my mom on how to get the APR reduced? I know they have no incentive to help at this point because we are no longer customers but I can't afford to make these payments for 10 years. Any advice would be appreciated. TIA.

Re: Amex FR Fallout

chalupaman — Mon, 23 Mar 2015 16:18:31 GMT

@Charger_Fan19 wrote:
I was an AU on my mom's amex account. That account was canceled this summer because she opted to not deal with the financial review process. After 30 years of being a cardholder she was pretty angry about them demanding tax returns and bank statements. She told them to shove it. As a result, all the pay over time charges came due immediatiely and lost their promotional interest rates. I'm trying to get things paid down as quickly as possible but lately have only been able to make the min payments because of other obligations. Not recieveing statements I had no idea that the card had defaulted to a 29% interest rate. I'm not making any dent in the principle. As an AU I can't call them directly but does anyone have any advice for my mom on how to get the APR reduced? I know they have no incentive to help at this point because we are no longer customers but I can't afford to make these payments for 10 years. Any advice would be appreciated. TIA.

How much was the balance for? At that high of a rate, I'd get that balance transferred as soon as possible. Call them first though to see if there's any arrangements that can be made to get the rate down or to have her do a more affordable repayment plan. Very sorry to hear what you're going through right now.

Re: Amex FR Fallout

Skye12329 — Mon, 23 Mar 2015 16:18:52 GMT

Since your an AU only. Your not technically liable for payments. That would be your mother or the account owner. As for getting a reduction in APR I would suggest have her call amex. Also any lender does reserve the right to request tax and income verification documents. Why doesn't she just send them in? If there's nothing to hide it shouldn't be an issue.

Re: Amex FR Fallout

Creditaddict — Mon, 23 Mar 2015 16:25:54 GMT

she can add you as an account manager to handle the account.

i would ask for a financial hardship program to pay the balance off and lower the interest rate.

Re: Amex FR Fallout

Anonymous — Mon, 23 Mar 2015 16:45:28 GMT

@Skye12329 wrote:
Since your an AU only. Your not technically liable for payments. That would be your mother or the account owner. As for getting a reduction in APR I would suggest have her call amex. Also any lender does reserve the right to request tax and income verification documents. Why doesn't she just send them in? If there's nothing to hide it shouldn't be an issue.

This is a frequent argument. They have the option to ask, you have the option to refuse, most frequently on privacy grounds. YOu don't have to have something to hide to object.

But this is an interesting case. I hadn't thought about pay over time and promotional rates going away when the card is closed. That certainly increases the cost of non-compliance.

Re: Amex FR Fallout

elim — Mon, 23 Mar 2015 16:53:19 GMT

BT to 0% or a lower % as popa suggested (asap)

Re: Amex FR Fallout

Anonymous — Mon, 23 Mar 2015 16:59:46 GMT

@Anonymous wrote:
@Skye12329 wrote:
Since your an AU only. Your not technically liable for payments. That would be your mother or the account owner. As for getting a reduction in APR I would suggest have her call amex. Also any lender does reserve the right to request tax and income verification documents. Why doesn't she just send them in? If there's nothing to hide it shouldn't be an issue.
This is a frequent argument. They have the option to ask, you have the option to refuse, most frequently on privacy grounds. YOu don't have to have something to hide to object.

But this is an interesting case. I hadn't thought about pay over time and promotional rates going away when the card is closed. That certainly increases the cost of non-compliance.

Agree completely.

Re: Amex FR Fallout

elim — Mon, 23 Mar 2015 17:01:32 GMT

Pay Over Time is 17.99 percent (if i remember). So can they demand immediate payment after entering into the P.O.T. agreement just for closing your account? i suppose that high interest is "late fee" and the contract was void when she failed to comply with FR.

damn, BT fasssssssssssssst. get out of that rate.

i take it some of this debt is yours as AU on the account if you are paying it. eh, sorry, irrelevant

Re: Amex FR Fallout

Anonymous — Mon, 23 Mar 2015 17:40:13 GMT

Do you know what triggered Amex to demand a financial review? Amex is generally pretty easy to work with. Maybe they've changed lately - don't know, but am very surprised reading your post. Generally, card issuers don't scrutinize credit limits in regards to one's income until they see problems...

Was it a traditional Amex charge card (with option of a payment over time option)? --or-- an Amex revolving credit card? Were payments late / missed on that card and/or any other card / loan she has?

Another possibility, assuming it's a traditional Amex charge card, is frequently carrying over too large of balance instead of paying in full. Traditional Amex charge cards have variable, internal limits, which can be far higher than what the same cardholder might have on an Amex revolving credit card.

As for what to do, enrolling in a debt management program, operated by a reputable non-profit, to reduce the interest rate considerably. Most card issuers prefer this route verses chargeoffs, collections, etc. The tradeoff is the account will be closed, but it already is, so nothing to lose there. However, other accounts may need to be closed as well, depending on her debt and income level.

Re: Amex FR Fallout

ojefferyo — Mon, 23 Mar 2015 17:47:47 GMT

Wonder why all the suddem they wanted to FR your mom, has she been having the POT balance increase gradually? That could be a trigger for them as it would indicate the ability to repay, not saying your mom didn't intend to pay back or anything.

Re: Amex FR Fallout

Charger_Fan19 — Mon, 23 Mar 2015 18:34:06 GMT

Thanks to all who posted. I'm going to see if I can get her an account at NFCU and have her balance transfer.

Yes the debt is mine. I started a new job that had me traveling a lot and the POT feature plus the general amex perks made her feel better about having her kid on the road. (I'm 32, yet will always be the baby). The promtion was a 90 day float and then 17.99 everything else was pif. The FR was triggered because as an AU I was charging more than her and more frequently. Since opening her account in the 70's she never charged more than 1000 a month and always PIF. I was using the float.. Never even heard of the FR process until this experience, I've come to find out its rather common. Her problem with the FR was first they asked for a paystub and she supplied. Then they called back asking for 3 months of bank statements and sent her a form for AMEX to contact the IRS and get copies of her tax returns. She decided that it wasn't worth it at that point, too invasive, especially since that info includes her husbands money which isnt releveant to AMEX. No reason for a loyal cardmember to be treated that way and to "all of the sudden" have a problem and freeze the account with no warning (literally leaving me stranded across the country) after nearly a year of this new spending pattern. Like I said, always PIF the non POT time charges and never hit the end of the float with out paying in full. I understand this is AMEX's perogative but I don't blame her a bit for giving them the boot.

Cherry on top was losing her 500K in points.

Re: Amex FR Fallout

Creditaddict — Mon, 23 Mar 2015 18:44:38 GMT

Charge card while it offers pay over time is not a feature Amex really wants you to use and pay over time AND charging more... It's the wrong credit card for that!

Re: Amex FR Fallout

Imperfectfuture — Mon, 23 Mar 2015 18:52:21 GMT

@Creditaddict wrote:
Charge card while it offers pay over time is not a feature Amex really wants you to use and pay over time AND charging more... It's the wrong credit card for that!

Definitely this. If you get it paid off, they will likely let you open a card in your name. If it's your debt, have her add you to account, and ask for some interest love there.

Re: Amex FR Fallout

Charger_Fan19 — Mon, 23 Mar 2015 18:58:52 GMT

Who wouldnt take advantage of a 90 day float at 0%. Seems like a no brainer to me. Why offer the feature if you are going to penalize you for using it? It really left a bad impression on me. I was in a strange city and couldn't check in to my hotel. Neither one of us will be doing business with Amex again. I'm not worried about my relationship with them at all just hoping to get out of nearly 30% interest. Thanks for the tips tho.

Re: Amex FR Fallout

taxi818 — Mon, 23 Mar 2015 19:03:35 GMT

@Anonymous wrote:
@Anonymous wrote:
@Skye12329 wrote:
Since your an AU only. Your not technically liable for payments. That would be your mother or the account owner. As for getting a reduction in APR I would suggest have her call amex. Also any lender does reserve the right to request tax and income verification documents. Why doesn't she just send them in? If there's nothing to hide it shouldn't be an issue.
This is a frequent argument. They have the option to ask, you have the option to refuse, most frequently on privacy grounds. YOu don't have to have something to hide to object.

But this is an interesting case. I hadn't thought about pay over time and promotional rates going away when the card is closed. That certainly increases the cost of non-compliance.
Agree completely.

Totally agree with LTL. I don't need to have something to hide. Like I don't want to be finger printed every time I enter the U.S. I have nothing to hide. I'm not a criminal but I don't need a test to prove who I am. That's what my passport is for.

Re: Amex FR Fallout

Creditaddict — Mon, 23 Mar 2015 19:27:35 GMT

I don't completely disagree that they shouldn't explain better that this is kind of a one time use thing, emergency float thing... But they are a bank and a credit consumer should also know what type of product they are using and you are using a "charge card" which in essence were designed to be pay in full products and if your needs are different then you should get a different product.
From Amex's standpoint you have to look at they have had a 30 year relationship with a pay in full client who all of a sudden needs to revolve balances and not pay charges that are suppose to be paid in full... It's like fire alarm red flags going off of what has changed that this person can't afford the bike anymore... If mom had had a revolving credit card product Amex probably wouldn't have blinked but that's not what she had.

Re: Amex FR Fallout

Creditaddict — Mon, 23 Mar 2015 19:28:08 GMT

Mom should protect her excellent credit and pay this off and let her baby pay her back because this is only hurting her!!

Re: Amex FR Fallout

Anonymous — Mon, 23 Mar 2015 19:38:36 GMT

@Charger_Fan19 wrote:
Thanks to all who posted. I'm going to see if I can get her an account at NFCU and have her balance transfer.

Yes

Cherry on top was losing her 500K in points.

That is very bad. Did they stop transfer when they started the FR? Harsh to keep it all!

The lesson from those that play closer to the edge: never leave large balances with cc accounts, because you never know! Not that they are totally safe with say an airline, but more so, and the loss of flexibility is small compared to total loss as here.

Re: Amex FR Fallout

CreditCuriosity — Mon, 23 Mar 2015 19:47:32 GMT

@Anonymous wrote:
@Charger_Fan19 wrote:
Thanks to all who posted. I'm going to see if I can get her an account at NFCU and have her balance transfer.

Yes

Cherry on top was losing her 500K in points.
That is very bad. Did they stop transfer when they started the FR? Harsh to keep it all!

The lesson from those that play closer to the edge: never leave large balances with cc accounts, because you never know! Not that they are totally safe with say an airline, but more so, and the loss of flexibility is small compared to total loss as here.

Couddn't you take them to small claims court and possibly win? I know there is wording and what not in T&C's, but wording isn't golden... Account hasn't been defaulted on yet. I think I would go the court route if anything ever happened to me like this.. No clue if I would win, but that is quite a bit of rewards on the table there

Re: Amex FR Fallout

Anonymous — Mon, 23 Mar 2015 19:55:28 GMT

@CreditCuriousity wrote:
@Anonymous wrote:
@Charger_Fan19 wrote:
Thanks to all who posted. I'm going to see if I can get her an account at NFCU and have her balance transfer.

Yes

Cherry on top was losing her 500K in points.
That is very bad. Did they stop transfer when they started the FR? Harsh to keep it all!

The lesson from those that play closer to the edge: never leave large balances with cc accounts, because you never know! Not that they are totally safe with say an airline, but more so, and the loss of flexibility is small compared to total loss as here.
Couddn't you take them to small claims court and possibly win? I know there is wording and what not in T&C's, but wording isn't golden... Account hasn't been defaulted on yet. I think I would go the court route if anything ever happened to me like this.. No clue if I would win, but that is quite a bit of rewards on the table there

I'm under the impression that OP's mom closed the account without inquiring about the points... Doesn't seem like Amex's fault. To me, it seems like Amex spotted an irregularity, asked for simple verification, and OP's mom flipped out and closed the account. I see nothing wrong with what Amex did. I certainly see nothing to take Amex to small claims over. Call Amex, ask what your options are. Find out if you can use those points to pay off a portion of your debt.