topic Re: Amex - Change in Terms - No Over the Limit Fee in Credit Cards

Amex - Change in Terms - No Over the Limit Fee

Want2BDebtFreeNow — Wed, 12 Aug 2009 16:39:32 GMT

I got a notice today in the mail that says they are changing my terms to no longer include an over the limit fee.

So I guess since starting in Feb they need your permission to be able to charge you an overdraft fee the way they are going to get around this is by not charging you a fee for going over the limit. This will probably trick people into going over the limit and then that way they can take AA against them for going over the limit?

The only other thing I think about is that they are worried about their "approval" rates when people try to spend money, I know a lot of cc's advertise that they have high approval rates?

What do you guys think?

Re: Amex - Change in Terms - No Over the Limit Fee

Anonymous — Wed, 12 Aug 2009 17:40:03 GMT

I got the same letter as you yesterday and I betcha it's exact same wording. Yeah no over credit limit fees, do you believe that? This is another way of saying you can charge as much as you want and you won't get charge for over CL fees. Yeah right, but it does cost one thing though, your credit score?..

I didnt get CLI for stupid reasons and so therefore they won't make a dime from me again..

Re: Amex - Change in Terms - No Over the Limit Fee

Want2BDebtFreeNow — Wed, 12 Aug 2009 17:53:04 GMT

I know that there has to be something funny about this. This is certainly not out of the kindness of their hearts. I can't wait to find out what this is all about. Wonder what other fee they are going to sneak in there to replace it with, I can see it now:

Added to section C of part D in paragraph 50 under sentence 5

Any charge for less than 50 dollars will have a underutilization fee of 39 dollars for allowing you the privilige of using your card

Removed Fee - No over CL fee

lol ok so I got carried away......

Re: Amex - Change in Terms - No Over the Limit Fee

Anonymous — Wed, 12 Aug 2009 18:27:24 GMT

@Want2BDebtFreeNow wrote:
I got a notice today in the mail that says they are changing my terms to no longer include an over the limit fee.

So I guess since starting in Feb they need your permission to be able to charge you an overdraft fee the way they are going to get around this is by not charging you a fee for going over the limit. This will probably trick people into going over the limit and then that way they can take AA against them for going over the limit?

The only other thing I think about is that they are worried about their "approval" rates when people try to spend money, I know a lot of cc's advertise that they have high approval rates?

What do you guys think?

There was an article about this posted the other day in the news forum...

http://ficoforums.myfico.com/fico/board/message?board.id=creditnews&thread.id=4800

it was from a USA Today article:

"By Kathy Chu, USA TODAY

Discover Financial and American Express plan to stop charging fees when consumers spend past their credit card limits.

The move, reported by American Banker Monday, comes six months before a new law clamps down on such fees. The law doesn't require issuers to eliminate over-limit fees, but it will prohibit them from imposing these charges unless consumers say they want the ability to exceed their credit line."

"American Express (AXP) says it began notifying consumers last week that it will do away with over-limit fees in October. At the same time, though, consumers were told that late fees for certain borrowers were rising. American Express also told some borrowers their purchase APR was going up — by an average of 4 percentage points — due to the "business and economic environment," says spokeswoman Desiree Fish."

Re: Amex - Change in Terms - No Over the Limit Fee

Anonymous — Wed, 12 Aug 2009 19:02:14 GMT

shocked I don't have a amex card, but I haerd while back they change policy as long as you were under your limit by the statemt date there was no fee, and think that should've been included in reform. I think would benifit PIF'ers buy if the go over linit several months in a row, but are dillgent enough to get in under limit before each new cycle, shouldn't that show they deverse more credit? and that policy is a true courtesy

Re: Amex - Change in Terms - No Over the Limit Fee

jorin — Wed, 12 Aug 2009 19:32:29 GMT

They probably realize that they'll make more than that "Over-The-Limit Fee" in the long run after they default your account and raise your APR to a new rediculous high for going over.

Re: Amex - Change in Terms - No Over the Limit Fee

Jazzzy — Wed, 12 Aug 2009 19:45:07 GMT

Hi all,

I reported on this a few days ago here. When I received the notice, my assumption was that if a charge would put you over your limit you would likely be declined at the point of sale.

Could happen...

Re: Amex - Change in Terms - No Over the Limit Fee

Watchmann — Wed, 12 Aug 2009 19:52:50 GMT

Let's be honest, no one should ever be over their limit. The limit is known and the cardholder SHOULD know where he/she stands in relation to that limit as they go through the month. You should not be pulling out your card if there is even a remote chance you will be over your limit. The limit is like a flashing red light with a stop sign AND a cop on the side of the road watching. You don't run the red light without expecting adverse results.

Message Edited by Watchmann on 08-12-2009 02:52 PM

Re: Amex - Change in Terms - No Over the Limit Fee

jorin — Wed, 12 Aug 2009 19:52:40 GMT

Oh yeah, and after the new rules are in place that's probably how all our cards will work. Don't have the available credit? Declined.

Finance Charges can still put people over the limit though...

Re: Amex - Change in Terms - No Over the Limit Fee

Anonymous — Wed, 12 Aug 2009 19:56:26 GMT

The article said the new regulations "will prohibit them from imposing these charges unless consumers say they want the ability to exceed their credit line" ... so I wonder if they will by default decline any transaction that would put the balance over the limit once the policy is in place. If the customer wants over-limit transactions to be approved, then a fee will be assessed?

Re: Amex - Change in Terms - No Over the Limit Fee

Anonymous — Wed, 12 Aug 2009 20:13:37 GMT

I think there's a catch to this NO OVERLIMIT FEES. We'll just have to wait and find out because if they don't charge you over the limit fee, basically your card have no pre-set spending limit regardless.

I am 100% positive there is a catch to it, beside it costs your credit score if you max out your credit line. They could use this as a reason to against all your future credit applications..There is a BIG CATCH TO THIS and I can see it

Re: Amex - Change in Terms - No Over the Limit Fee

Anonymous — Wed, 12 Aug 2009 20:32:04 GMT

@Anonymous wrote:
I think there's a catch to this NO OVERLIMIT FEES. We'll just have to wait and find out because if they don't charge you over the limit fee, basically your card have no pre-set spending limit regardless.
I am 100% positive there is a catch to it, beside it costs your credit score if you max out your credit line. They could use this as a reason to against all your future credit applications..There is a BIG CATCH TO THIS and I can see it

The catch is simple - they are not going to authorize a charge that will take you over your CL. The government mandated opt in program was going to cost them too much to implement. If you don't charge an overlimit fee there is no need for compliance. Going anywhere near you CL now, particularly with AMEX is just asking for trouble.

Re: Amex - Change in Terms - No Over the Limit Fee

Anonymous — Wed, 12 Aug 2009 20:38:36 GMT

Well if they aren't authorized a charge over the CL, then they should specifically state it in the letter rather than making it more complicated. Credit cards company need to be specific and clear, no fine prints or false advertisement. This is the reason why the credit card bills was signed into law to make it clear for all consumers.

Re: Amex - Change in Terms - No Over the Limit Fee

Anonymous — Wed, 12 Aug 2009 20:45:34 GMT

@Anonymous wrote:
Well if they aren't authorized a charge over the CL, then they should specifically state it in the letter rather than making it more complicated. Credit cards company need to be specific and clear, no fine prints or false advertisement. This is the reason why the credit card bills was signed into law to make it clear for all consumers.

It's not clear to you that they don't have to authorize a charge that exceeds your CL? A CL is not advisory - it is a limit!

Re: Amex - Change in Terms - No Over the Limit Fee

Want2BDebtFreeNow — Thu, 13 Aug 2009 03:00:23 GMT

@LynetteM wrote:
Hi all,

I reported on this a few days ago here. When I received the notice, my assumption was that if a charge would put you over your limit you would likely be declined at the point of sale.

Could happen...

I guess, but if that is the case then why would they have to spend thousands or millions of dollars amending the contract when all they have to do is just decline the charge to start with?

FWIW this wont affect me directly since I am nowhere near my limit, I am guessing that since I do carry a balance it is affecting me in that they increased my interest rate about a month ago, that's probably how they are going to make up for the losses.

Re: Amex - Change in Terms - No Over the Limit Fee

Anonymous — Thu, 13 Aug 2009 03:46:38 GMT

@Want2BDebtFreeNow wrote:
@LynetteM wrote:
Hi all,

I reported on this a few days ago here. When I received the notice, my assumption was that if a charge would put you over your limit you would likely be declined at the point of sale.

Could happen...
I guess, but if that is the case then why would they have to spend thousands or millions of dollars amending the contract when all they have to do is just decline the charge to start with?

FWIW this wont affect me directly since I am nowhere near my limit, I am guessing that since I do carry a balance it is affecting me in that they increased my interest rate about a month ago, that's probably how they are going to make up for the losses.

Because publicity is cheaper than advertising? The contract was going to have to be changed anyway,