topic Re: American Express FR in Credit Cards

American Express FR

Anonymous — Tue, 23 Oct 2012 00:18:04 GMT

Hi everyone,

I am an 18 year old college student (and a longtime lurker of these forums) who just passed 6 months of credit history at the beginning of this month. I currently have a Chase Freedom with a $500 limit and a Citi Forward with an $800 limit. I recently applied for the American Express Green (I was hoping to apply for the lower-AF, easier-to-get Zync, but the online application told me that the card has been discontinued). After watching the wheel spin for ~45 seconds, I was instantly approved with NPSL. Fast forward a week later, and I recieve an email from American Express:

Dear **********,
We were unsuccessful in contacting you today concerning your American Express account(s). In reviewing your account(s) it has been determined there are financial documents that you would need to furnish in order for us to complete our review. It is important you contact us within 7 business days to discuss the documents that are needed.

Please be advised there is currently a restriction placed on your account(s) and no further charges will be allowed until this matter is resolved. Also, failure to contact us could result in your account(s) being permanently cancelled.

We look forward to continuing our relationship and providing the services necessary for your continued success.

Sincerely,
American Express Account Service

I have not yet activated my card (I didn't recieve it until after I got this email). Since I was under the age of 18 last year, I do not have any 2011 tax returns (which is what I'm guessing they want from me). What should I do?

Re: American Express FR

gijoe4500 — Tue, 23 Oct 2012 00:20:21 GMT

Contact them, and find out what it is they are wanting. And hope for the best.

Re: American Express FR

Anonymous — Tue, 23 Oct 2012 00:23:24 GMT

What income did you state on the application? I take it you weren't employed part time during the age of 15-17? What income do you have now? Last but not least the income you stated on the app, does it match your current income your able to prove?

Re: American Express FR

Tommy5746 — Tue, 23 Oct 2012 00:26:09 GMT

Did you put down your ACTUAL income? What you actually make a year?

Re: American Express FR

Anonymous — Tue, 23 Oct 2012 00:26:45 GMT

I stated the scholarships I recieved (I earned a full ride to the public university I attend) + what I expect to make from my on-campus job by the end of this year.

Re: American Express FR

Tommy5746 — Tue, 23 Oct 2012 00:34:08 GMT

@Anonymous wrote:
I stated the scholarships I recieved (I earned a full ride to the public university I attend) + what I expect to make from my on-campus job by the end of this year.

Then provide proof of the scholarship and a recent paystub.. IF that will suffice for them.. however, im not so sure the scholarship info is going to work..

Re: American Express FR

Anonymous — Tue, 23 Oct 2012 00:39:26 GMT

Alright. If it doesn't suffice for them, will by credit report list the AMEX account as "account closed by credit grantor"? Currently, no Amex tradelines show up on my credit report. I'm just trying to figure out if I should close the account now vs taking the chance that they might close it.

Re: American Express FR

navigatethis12 — Tue, 23 Oct 2012 00:37:29 GMT

I am no expert but I do not know if you can count the scholarship if it only pays for your tuition. I know if it gives you more than just for tuition you can put it, but otherwise it is not really income, since the money can not be used to pay the card off. Money you expect to make is not guaranteed and they want to see actual evidence of some form of income. As someone else stated, the best thing to do is contact them and see what kind of documents they would accept.

Re: American Express FR

Anonymous — Tue, 23 Oct 2012 00:59:31 GMT

The scholarship was for tuition, room, board, books, and a small amount for personal expenses.

Also, if they do close the account, will I lose 2012 backdating, since the card was never activated?

Re: American Express FR

Tommy5746 — Tue, 23 Oct 2012 01:08:28 GMT

@Anonymous wrote:
The scholarship was for tuition, room, board, books, and a small amount for personal expenses.

Also, if they do close the account, will I lose 2012 backdating, since the card was never activated?

You were approved and then they pulled the FR so it will most likely show up on your report as card closed by credit grantor if they dont accept your income.

Re: American Express FR

Anonymous — Tue, 23 Oct 2012 01:31:26 GMT

FIRST AND FOREMOST I AM NOT A CPA/TAX PROFESSIONAL!!!!!

Based on the application itself:

Include income from all sources including employment, retirement, investments, rental properties, etc. Alimony, child support, or separate maintenance need not be revealed if you do not wish to rely upon it.

In my opinion, scholarships could be considered...although you would have a hard time proving scholarship income since you did not file last year. Scholarships can be considered income, in fact most furnish you a 1098-T form for tax purposes at the end of the year. The only real official proof of income that can be considered by a financial institution are IRS forms.

Now as far as my recommendation! Explain to them your situation, see what they say. If they say they do not recognize scholorships (which they should) or if they can't do anything since you didn't file last year (more probable) then I'd HIGHLY SUGGEST looking into obtaining a co-signer. If you fail this FR, you have a HIGH chance of being blacklisted never being able to obtain an American Express card for quite some time (or possibly even your entire life). My two cents. Good luck

Re: American Express FR

navigatethis12 — Tue, 23 Oct 2012 01:39:32 GMT

@Anonymous wrote:
The scholarship was for tuition, room, board, books, and a small amount for personal expenses.

Also, if they do close the account, will I lose 2012 backdating, since the card was never activated?

The amount for personal expenses may be the only part they would accept. The money you get for everything else really can not be used for repayment, and I am not sure why other lenders say scholarships are acceptable. Again, I am no expert and do not want to scare you. Only they know what they will or will not accept. For all we know they may just want a bank statement.

I am unsure about the backdating, but if they close it because you have no income it would say closed by grantor. Of course, if they say what you have is not good enough, you can just cancel the card on your own. I very much dislike that they do this after they approve people, but oh well.

Re: American Express FR

llecs — Tue, 23 Oct 2012 02:33:47 GMT

If closed, it will say "closed by credit grantor" but that's not a bad thing.

Re: American Express FR

migliogiorni — Tue, 23 Oct 2012 02:45:19 GMT

What is it with all these FR's from Amex lately. Never hear a peep about other lenders doing FR's, but amex does it religously. Amex is ruthless and know what your signing up for folks.

Re: American Express FR

Revelate — Tue, 23 Oct 2012 03:36:03 GMT

@migliogiorni wrote:
What is it with all these FR's from Amex lately. Never hear a peep about other lenders doing FR's, but amex does it religously. Amex is ruthless and know what your signing up for folks.

Close to same incidence rate as AA's from other lenders, simply Amex is admittedly more intrusive about it.

It's a legimate question for Amex to be asking in this case for some sort of income verification with an 18 year old. I mean no offense by that statement, it's just a reality given the current legal issues regarding issuing cards to young adults, and generally most freshman don't have much in the way of income during their first semester.

FWIW pretty much all the FR's I've seen that have had details posted about it were absolutely legit (people blatantly lying on their application); this is one of the few that I've seen where the income in my mind is plausible, but Amex may have a different definition of it. It'll be interesting to see what documents they ask for in this scenario, it could be as simple as providing two paystubs and the scholarship letter... and that's right in line with any other lender's inquiry for income verification, without the full monty FR which is decidedly less fun.

Re: American Express FR

navigatethis12 — Tue, 23 Oct 2012 03:41:26 GMT

Revelate wrote

It's a legimate question for Amex to be asking in this case for some sort of income verification with an 18 year old.

I had not thought about that. Under the new laws, anyone under 21 is supposed to provide income verification before obtaining a credit card. If you have a co-signer I do not believe that you need to provide anything. So any other lender would probably require the same thing .

Re: American Express FR

youngandcreditwrthy — Tue, 23 Oct 2012 03:45:25 GMT

This really sucks.... You prob are going to get it canceled on you... The auto system prob approved you and they caught it. It's prob because you are <21 that they did this. So unless you can provide substantial income for your age...or get a cosigner, don't count on Amex. I hate that this happens, but Amex seema legit in some cya action :-/ Best of luck !!

Re: American Express FR

Revelate — Tue, 23 Oct 2012 03:48:51 GMT

@youngandcreditwrthy wrote:
This really sucks.... You prob are going to get it canceled on you... The auto system prob approved you and they caught it. It's prob because you are <21 that they did this. So unless you can provide substantial income for your age...or get a cosigner, don't count on Amex. I hate that this happens, but Amex seema legit in some cya action :-/ Best of luck !!

Nah, when Amex airstruck the Zync, presumably they didn't want to leave qualified students out in the cold. Much like Chase does with their $500 Freedom even though it's not a student card; also, Amex can stick whatever internal limit they wish on a card. From that standpoint since they're largely profitable on transactions, I don't know why they wouldn't offer some charge card for students. Now that I think of it, I think it's a mistake for Amex not to be marketing to them as they desperately need a foothold in the younger generations and the college educated are a good place to start, but maybe there's something I'm not seeing.

Re: American Express FR

cashnocredit — Tue, 23 Oct 2012 03:59:51 GMT

@navigatethis12 wrote:
Revelate wrote

It's a legimate question for Amex to be asking in this case for some sort of income verification with an 18 year old.

I had not thought about that. Under the new laws, anyone under 21 is supposed to provide income verification before obtaining a credit card. If you have a co-signer I do not believe that you need to provide anything. So any other lender would probably require the same thing .

It's widely believed that if you are under 21 you have to provide income verification. In fact you only have to provide a written statement of personal income and/or assets that indicate an ability to make minimum payments on the card. Check out the CFPB's rulemaking on this. It's not nearly as restrictive as one might think. They are also addressing the issue of non-working spouses and increasing the flexibility to encompass funds normally availalbe. For instance, joint checking where the paychecks of the working spouse are deposited into the joint account.

Re: American Express FR

Anonymous — Tue, 23 Oct 2012 04:21:10 GMT

Under the new laws, anyone under 21 is supposed to provide income verification before obtaining a credit card. If you have a co-signer I do not believe that you need to provide anything. So any other lender would probably require the same thing .

That's interesting, I did not know that. Chase never asked for any documentation whatsoever, but perhaps that's because I already had a checking account with them. Citi was a bit of a pain: they needed a signed SSA-89 form, a copy of my social security card, a copy of my driver's license, and proof that I would be enrolling in college in the fall. But neither lender has ever asked for financial documentation or tax returns. And Citi asked for the identification papers before they approved me, not after the fact. Perhaps each lender interprets the CARD Act differently.