topic Re: Amex APR increase due to FICO score decrease in Credit Cards

Amex APR increase due to FICO score decrease

SouthJamaica — Thu, 28 Apr 2022 17:30:32 GMT

I was recently notified that the APR on one of my Amex cards has been increased 2 200 basis points, from 19.49% to 21.49%, based solely upon my FICO score. (distinct from the .25% raise to 19.49% generated by the Fed's credit tightening). This despite the fact that my payment record with Amex has been pristine, for decades.

To me, this is just one more illustration of the importance of maintaining one's FICO scores at optimal level at all times, not just when making a major credit application.

Many people are fond of saying "Finances > FICO". This is an example of "FICO = Finances"

Re: Amex APR increase due to FICO score decrease

Brian_Earl_Spilner — Thu, 28 Apr 2022 15:28:50 GMT

How much of a decrease are we talking about?

Re: Amex APR increase due to FICO score decrease

SouthJamaica — Thu, 28 Apr 2022 17:01:23 GMT

@Brian_Earl_Spilner wrote:
How much of a decrease are we talking about?

I have no idea.

Re: Amex APR increase due to FICO score decrease

wasCB14 — Thu, 28 Apr 2022 17:11:23 GMT

@SouthJamaica wrote:
I was recently notified that the APR on one of my Amex cards has been increased 2 basis points, from 19.49% to 21.49%, based solely upon my FICO score. (distinct from the .25% raise to 19.49% generated by the Fed's credit tightening). This despite the fact that my payment record with Amex has been pristine, for decades.

To me, this is just one more illustration of the importance of maintaining one's FICO scores at optimal level at all times, not just when making a major credit application.

Many people are fond of saying "Finances > FICO". This is an example of "FICO = Finances"

That's actually 200 basis points. A 2 basis point increase would be to 19.51%.

Neither 19.49% or 21.49% is an interest rate that anyone should be paying. I'd sooner have a few low-APR no-rewards no-frills credit union cards than pay anything close to 19.49%.

Re: Amex APR increase due to FICO score decrease

SouthJamaica — Thu, 28 Apr 2022 17:29:01 GMT

@wasCB14 wrote:
@SouthJamaica wrote:
I was recently notified that the APR on one of my Amex cards has been increased 2 basis points, from 19.49% to 21.49%, based solely upon my FICO score. (distinct from the .25% raise to 19.49% generated by the Fed's credit tightening). This despite the fact that my payment record with Amex has been pristine, for decades.

To me, this is just one more illustration of the importance of maintaining one's FICO scores at optimal level at all times, not just when making a major credit application.

Many people are fond of saying "Finances > FICO". This is an example of "FICO = Finances"
That's actually 200 basis points. A 2 basis point increase would be to 19.51%.

Neither 19.49% or 21.49% is an interest rate that anyone should be paying. I'd sooner have a few low-APR no-rewards no-frills credit union cards than pay anything close to 19.49%.

1. Thanks for the correction Sorry about that.

2. It's a card I always pay in full, and never pay interest on.

Re: Amex APR increase due to FICO score decrease

hawkins — Thu, 28 Apr 2022 17:30:39 GMT

They did the same to me except my score has not changed at all. So be it was on a card I dont really use anyways so whatever.

@SouthJamaica wrote:
I was recently notified that the APR on one of my Amex cards has been increased 2 basis points, from 19.49% to 21.49%, based solely upon my FICO score. (distinct from the .25% raise to 19.49% generated by the Fed's credit tightening). This despite the fact that my payment record with Amex has been pristine, for decades.

To me, this is just one more illustration of the importance of maintaining one's FICO scores at optimal level at all times, not just when making a major credit application.

Many people are fond of saying "Finances > FICO". This is an example of "FICO = Finances"

Re: Amex APR increase due to FICO score decrease

Anonymous — Thu, 28 Apr 2022 17:32:09 GMT

@SouthJamaica wrote:
@wasCB14 wrote:
@SouthJamaica wrote:
I was recently notified that the APR on one of my Amex cards has been increased 2 basis points, from 19.49% to 21.49%, based solely upon my FICO score. (distinct from the .25% raise to 19.49% generated by the Fed's credit tightening). This despite the fact that my payment record with Amex has been pristine, for decades.

To me, this is just one more illustration of the importance of maintaining one's FICO scores at optimal level at all times, not just when making a major credit application.

Many people are fond of saying "Finances > FICO". This is an example of "FICO = Finances"
That's actually 200 basis points. A 2 basis point increase would be to 19.51%.

Neither 19.49% or 21.49% is an interest rate that anyone should be paying. I'd sooner have a few low-APR no-rewards no-frills credit union cards than pay anything close to 19.49%.
1. Thanks for the correction Sorry about that.

2. It's a card I always pay in full, and never pay interest on.

So, the impact is minimal and you neglect the potential costs of maintaining an optimal Fico score (both in real money and in effort).

Re: Amex APR increase due to FICO score decrease

SouthJamaica — Fri, 29 Apr 2022 13:26:59 GMT

My original post was not intended to be about me or my usage of a particular card.

It was intended as a data point to illustrate that one's current interest rates on existing accounts can be affected by a change in one's FICO scores.

Re: Amex APR increase due to FICO score decrease

OmarGB9 — Mon, 02 May 2022 02:32:24 GMT

@SouthJamaica wrote:
My original post was not intended to be about me or my usage of a particular card.

It was intended as a data point to illustrate that one's current interest rates on existing accounts can be affected by a change in one's FICO scores.

This is the first I've heard of that. Also, it's Amex we're talking about, and they can be pretty strict so.

Re: Amex APR increase due to FICO score decrease

babygirl1256 — Mon, 02 May 2022 02:41:14 GMT

Wow . . . glad to know . . . thanks for posting that information. I'll make sure I keep my card utilizations down and my FICO score high. I've been doing well for the last year and keeping FICO above 800 except for EQ . . . but that score should improve once the last adverse $400.00 (paid) CO purges on 12/1/2022!!!

Re: Amex APR increase due to FICO score decrease

Brian_Earl_Spilner — Mon, 02 May 2022 14:39:38 GMT

@SouthJamaica wrote:
@Brian_Earl_Spilner wrote:
How much of a decrease are we talking about?
I have no idea.

Then the datapoint is incomplete. A 5 point drop won't be looked at the same as a 30 point drop. Clean scorecard, dirty? What caused the score drop, utilization increase, credit seeking? A utilization increase could have set off alarms and they used fico as the reason when they could have also said you were pyramiding debt.

In my case, my fico has been fluctuating by 5 points every month for a year. Dirty scorecard and both aggregate and individual utilization has risen due to taking a new job with a 30% paycut. My rates haven't risen.

While we all know finances = FICO, the point of finances>FICO is people shouldn't let the score get in the way of handling ones debt. Obviously there's a line that needs to be walked. If the goal during pay down is to leverage bt offers and personal loans, then scores are just as important. But if someone's budget or pay down is being hindered by constantly doing AZEO even though there isn't an immediate benefit, then finances should be more important than FICO.

Re: Amex APR increase due to FICO score decrease

CYBERSAM — Tue, 03 May 2022 18:25:58 GMT

@SouthJamaica wrote:
I was recently notified that the APR on one of my Amex cards has been increased 2 200 basis points, from 19.49% to 21.49%, based solely upon my FICO score. (distinct from the .25% raise to 19.49% generated by the Fed's credit tightening). This despite the fact that my payment record with Amex has been pristine, for decades.

To me, this is just one more illustration of the importance of maintaining one's FICO scores at optimal level at all times, not just when making a major credit application.

Many people are fond of saying "Finances > FICO". This is an example of "FICO = Finances"

@SouthJamaica ~~So by that rational, they should lower my APR given my score have improved over 70+ points since I got my AMEX!~~

~~CITI, Disco and FNBO has reduced my APR but never AMEX!~~

Re: Amex APR increase due to FICO score decrease

7774x — Mon, 02 May 2022 17:31:00 GMT

@babygirl1256 wrote:
Wow . . . glad to know . . . thanks for posting that information. I'll make sure I keep my card utilizations down and my FICO score high. I've been doing well for the last year and keeping FICO above 800 except for EQ . . . but that score should improve once the last adverse $400.00 (paid) CO purges on 12/1/2022!!!

Amex rate hikes look at utilization,increasing credit & Amex payment patterns..i.e late ...

Re: Amex APR increase due to FICO score decrease

SouthJamaica — Mon, 02 May 2022 18:12:53 GMT

@7774x wrote:
@babygirl1256 wrote:
Wow . . . glad to know . . . thanks for posting that information. I'll make sure I keep my card utilizations down and my FICO score high. I've been doing well for the last year and keeping FICO above 800 except for EQ . . . but that score should improve once the last adverse $400.00 (paid) CO purges on 12/1/2022!!!
Amex rate hikes look at utilization,increasing credit & Amex payment patterns..i.e late ...

According to the notice I received it was because of the decrease in my FICO score:

Reason(s) for Our Decision

We made this decision for the following reason(s):
Your APRs for purchases and balance transfers are lower than the APRs on the same or similar card
products currently offered by American Express for Card Members with similar FICO scores.
Your FICO credit score as provided by Experian.

The only change occurring in my profile that caused the decrease in the FICO score was increased utilization, but that was not referenced in the notice.

Re: Amex APR increase due to FICO score decrease

Anonymous — Mon, 02 May 2022 18:47:24 GMT

@SouthJamaica wrote:
@7774x wrote:
@babygirl1256 wrote:
Wow . . . glad to know . . . thanks for posting that information. I'll make sure I keep my card utilizations down and my FICO score high. I've been doing well for the last year and keeping FICO above 800 except for EQ . . . but that score should improve once the last adverse $400.00 (paid) CO purges on 12/1/2022!!!
Amex rate hikes look at utilization,increasing credit & Amex payment patterns..i.e late ...
According to the notice I received it was because of the decrease in my FICO score:

Reason(s) for Our Decision
We made this decision for the following reason(s):
Your APRs for purchases and balance transfers are lower than the APRs on the same or similar card
products currently offered by American Express for Card Members with similar FICO scores.
Your FICO credit score as provided by Experian.

The only change occurring in my profile that caused the decrease in the FICO score was increased utilization, but that was not referenced in the notice.

Where did it reference the decrease in score? The thing you quoted looks absolutely standard Amex benchmarking your rates against those similar situated (and of course the reference group can change if your score does)

Re: Amex APR increase due to FICO score decrease

OmarGB9 — Mon, 02 May 2022 18:54:28 GMT

@Anonymous wrote:
@SouthJamaica wrote:
@7774x wrote:
@babygirl1256 wrote:
Wow . . . glad to know . . . thanks for posting that information. I'll make sure I keep my card utilizations down and my FICO score high. I've been doing well for the last year and keeping FICO above 800 except for EQ . . . but that score should improve once the last adverse $400.00 (paid) CO purges on 12/1/2022!!!
Amex rate hikes look at utilization,increasing credit & Amex payment patterns..i.e late ...
According to the notice I received it was because of the decrease in my FICO score:

Reason(s) for Our Decision
We made this decision for the following reason(s):
Your APRs for purchases and balance transfers are lower than the APRs on the same or similar card
products currently offered by American Express for Card Members with similar FICO scores.
Your FICO credit score as provided by Experian.

The only change occurring in my profile that caused the decrease in the FICO score was increased utilization, but that was not referenced in the notice.
Where did it reference the decrease in score? The thing you quoted looks absolutely standard Amex benchmarking your rates against those similar situated (and of course the reference group can change if your score does)

Agreed. We've seen plenty of DPs about Amex raising interest rates to "come more in line with public offerings," but I too fail to see where they specifically say it was due to a decrease in FICO score. The timing of this may have made it *seem* like it was due to your drop in score, but they've been going around raising rates to match the market on everyone.

Re: Amex APR increase due to FICO score decrease

ladybug2016 — Mon, 02 May 2022 22:07:51 GMT

Thanks for sharing @SouthJamaica !

Sorry about this, but great that it wasn't a card you had a large balance on. I received a similar letter late last year when my Fico decreased due to utilization, and then received a follow-up letter that they "changed their mind so disregard previous letter" which I found pretty funny. Maybe you'll receive the same when they feel guilty. 🙂

@SouthJamaica wrote:
I was recently notified that the APR on one of my Amex cards has been increased 2 200 basis points, from 19.49% to 21.49%, based solely upon my FICO score. (distinct from the .25% raise to 19.49% generated by the Fed's credit tightening). This despite the fact that my payment record with Amex has been pristine, for decades.

To me, this is just one more illustration of the importance of maintaining one's FICO scores at optimal level at all times, not just when making a major credit application.

Many people are fond of saying "Finances > FICO". This is an example of "FICO = Finances"

Re: Amex APR increase due to FICO score decrease

CYBERSAM — Tue, 03 May 2022 18:36:46 GMT

@CYBERSAM wrote:
@SouthJamaica wrote:
I was recently notified that the APR on one of my Amex cards has been increased 2 200 basis points, from 19.49% to 21.49%, based solely upon my FICO score. (distinct from the .25% raise to 19.49% generated by the Fed's credit tightening). This despite the fact that my payment record with Amex has been pristine, for decades.

To me, this is just one more illustration of the importance of maintaining one's FICO scores at optimal level at all times, not just when making a major credit application.

Many people are fond of saying "Finances > FICO". This is an example of "FICO = Finances"
@SouthJamaica ~~So by that rational, they should lower my APR given my score have improved over 70+ points since I got my AMEX!~~
~~CITI, Disco and FNBO has reduced my APR but never AMEX!~~

I stand corrected! After reading Remedios post, I decided to give it a go with AMEX and they did infact reduced my APR from 24.24% to 20.49%

@SouthJamaica Seems they hate carrying balance, especially if the payment is around minimum amount! Just reduce your UTI and in few months get your APR back and then some!

Re: Amex APR increase due to FICO score decrease

FireMedic1 — Tue, 03 May 2022 19:35:48 GMT

@SouthJamaica"Your APRs for purchases and balance transfers are lower than the APRs on the same or similar card products currently offered by American Express for Card Members with similar FICO scores." Looks like AMEX has buckets (scorecards) like FICO. Wonder what it takes to get back to where you were or lower than before APR.

Re: Amex APR increase due to FICO score decrease

Credit12Fico — Tue, 03 May 2022 19:41:29 GMT

@SouthJamaica wrote:
@7774x wrote:
@babygirl1256 wrote:
Wow . . . glad to know . . . thanks for posting that information. I'll make sure I keep my card utilizations down and my FICO score high. I've been doing well for the last year and keeping FICO above 800 except for EQ . . . but that score should improve once the last adverse $400.00 (paid) CO purges on 12/1/2022!!!
Amex rate hikes look at utilization,increasing credit & Amex payment patterns..i.e late ...
Reason(s) for Our Decision
We made this decision for the following reason(s):
Your APRs for purchases and balance transfers are lower than the APRs on the same or similar card
products currently offered by American Express for Card Members with similar FICO scores.
Your FICO credit score as provided by Experian.

You should tell them to lower the APR for those other card members in order to make it more fair