topic Re: Another myth buster for Amex PIF theory in Credit Cards

Another myth buster for Amex PIF theory

Fico2Go — Sat, 12 Jul 2014 02:11:34 GMT

My wife has five revolvers. 2 are AMEX. 1 Retail/1 Citi/1Chase.

Past two months she went over Amex limit by 100% once and maxed out a couple times. The other cards had $0 balance.

Both her Amex are used heavily. One has 80% UTIL and a second above 60%.

Just recently she received an auto CLI just right after her 180 day mark. This was on the card she had recently gone over limit.

It was nice and unexpected.

Tnis morning both her Amex are near max out. So we attempted to 3X CLI and she was approved instantly.

The point I"m making is there's more to getting AMEX CLI than paying off all balances and leaving 1 TL under 10% util. Btw, she has been carrying balances on AMEX for a few months.

My theory is that AMEX uses internal scoring more than anything else. They haven't been SPing her for months. The most recent SP was just before the auto CLI. This leads me to think that AMEX will SP on new accounts and for auto CLI. As for CLI request it's likely based on internal scoring.

Any data to support or diffuse my theory?

Re: Another myth buster for Amex PIF theory

kr3st00 — Sat, 12 Jul 2014 02:42:05 GMT

That's honestly incredible.

That's awesome to hear. I love hearing stories like this. It gives us all hope!

Re: Another myth buster for Amex PIF theory

Fico2Go — Sat, 12 Jul 2014 02:47:49 GMT

@kr3st00 wrote:
That's honestly incredible.

That's awesome to hear. I love hearing stories like this. It gives us all hope!

Well she didn't have a need for CLI so I suggested that the time to requiest CLI is when you doesn't need it. In the worst case she would get denied. Then we'd just wait another 90 days to try again.

Re: Another myth buster for Amex PIF theory

Anonymous — Sat, 12 Jul 2014 03:09:11 GMT

wow

Re: Another myth buster for Amex PIF theory

robbulous — Sat, 12 Jul 2014 05:19:52 GMT

That's honestly incredible and it goes against everything I've read here. I guess it truly is YMMV!

Re: Another myth buster for Amex PIF theory

score_building — Sat, 12 Jul 2014 06:56:24 GMT

Amex is spendcentric and your DW has used their cards heavily, not much to see here, PIF is one of the more reliable and responsible of a variety ways to maintain a strong Amex score, not the only way.

Most lenders, including Amex, will reward a cardholder who routinely pays >10% of outstanding balance each statement period...Amex doesn't love protracted revolving of balances generally speaking, if they determine the risk outweighs the rewards. A general rule of thumb is quite different from a myth or urban legend...Congrats on the CLI.

Re: Another myth buster for Amex PIF theory

takeshi74 — Sat, 12 Jul 2014 13:50:00 GMT

CLI's have never been based solely on usage. Usage can certainly play a part but no credit decision is ever based solely on a single factor. It all matters.

I've received CLI's with balances over 10% (but under 30%).

Re: Another myth buster for Amex PIF theory

Fico2Go — Sat, 12 Jul 2014 13:57:18 GMT

@takeshi74 wrote:
CLI's have never been based solely on usage. Usage can certainly play a part but no credit decision is ever based solely on a single factor. It all matters.

I've received CLI's with balances over 10% (but under 30%).

It's possible also that the criteria used to approve new apps could skew towards <10% util on one card whereas approval for CLI might more or less base on loyalty and useage.

A good example might be when your Util ratio is > 30% with one issuer while all other card ratios are close to or equal to $0. Which would make sense.

Re: Another myth buster for Amex PIF theory

Open123 — Sat, 12 Jul 2014 14:59:10 GMT

Amex's preference for PIF is something that is accepted "in general," not a universal truth. For instance, Citi & Barclay prefer people carrying balances, but this is true "in general," and not in every case.

In other words, generalities are neither proven nor disproven, unlike a hypothesis. For example, in general, males are physically stronger, taller and run faster than females; just because the 100 Meter Woman's Gold medalist or Ms. Olympia is faster and stronger than most men *does not* invalidate, that, "in general," males are taller, stronger and run faster.

If I assert a hypothesis, such as, Amex CLIs cardmembers who carry a balance more than 13 months. In this case, your wife carrying a balance greater than 13 months without suffering a CLI would refute the aforementioned hypothesis (which must be true 100% of the time, unlike generalities). This, would be a "myth" or "truth" buster, refuting and disproving a working hypothesis.

So, in general, many find Amex's spendcentric model to favor PIF cardmembers, while Citi/Barclay's interest revenue model will tend to favor those who carry balances. An exception in these issuer's general practices neither refutes nor disproves the general characteristics of each issuer's chosen business model.

*Edited* PS - Amex is the *ONLY* CC I know of based primarily on a spendcentric (however, with the ED cards, they seem to be diversifying towards some interest based revenue) business model, though Chase comes close.

Re: Another myth buster for Amex PIF theory

Fico2Go — Sat, 12 Jul 2014 14:56:00 GMT

@Fico2Go wrote:
@takeshi74 wrote:
CLI's have never been based solely on usage. Usage can certainly play a part but no credit decision is ever based solely on a single factor. It all matters.

I've received CLI's with balances over 10% (but under 30%).
It's possible also that the criteria used to approve new apps could skew towards <10% util on one card whereas approval for CLI might more or less base on loyalty and useage.

A good example might be when your Util ratio is > 30% with one issuer while all other card ratios are close to or equal to $0. Which would make sense.

Another data point for those in the planning is her EQ Fico is currently 653.

Re: Another myth buster for Amex PIF theory

Fico2Go — Sat, 12 Jul 2014 15:05:02 GMT

@Open123 wrote:
Amex's preference for PIF is something that is accepted "in general," not a universal truth. For instance, Citi & Barclay prefer people carrying balances, but this is true "in general," and not in every case.

I don't believe a company the size of AMEX would operate business on "generalities." They like any major corp has a system of doing things. Perhaps their system favors PIF but in this case what would be the outlier to allow CLI for high balances and relatively low fico scores? In this case my app guess is telling me that Amex is using internal data for CLI approval since any HP of fico scores and reports would reveal a high UTIL, low AAoA, 10 INQs, etc...

We all are trying to understand the "system" that each uses so that we can optimize our experiences with them.

Re: Another myth buster for Amex PIF theory

Open123 — Sat, 12 Jul 2014 15:16:25 GMT

@Fico2Go wrote:
We all are trying to understand the "system" that each uses so that we can optimize our experiences with them.

Amex's is a spendcentric business model.

Re: Another myth buster for Amex PIF theory

Fico2Go — Sat, 12 Jul 2014 15:44:01 GMT

@Open123 wrote:
@Fico2Go wrote:
We all are trying to understand the "system" that each uses so that we can optimize our experiences with them.
Amex's is a spendcentric business model.

Maybe a better question might be, "What kind of payback model does AMEX want?"

What kind of customers does AMEX want enrolled in their spendcentric model?

How interested are they in members in paying back? In full? in partial? in duration? how long?

What does they want their members to spend on?

These are the kinds of questions we are trying to nail down.

Re: Another myth buster for Amex PIF theory

score_building — Sat, 12 Jul 2014 16:57:36 GMT

As previously posted most issuers (major, regional, and local) respond favorably to card holders who pay back >10% of outstanding balance each month, since this will basically result in a VG+ repayment score.

The questions posed in response to PP seem to reflect a limited understanding of what a spendcentric model is. In any case, we do know that Amex advanced algorithms are used to evaluate ALL lending decisions and are unlikely to be 'nailed down' by conjecture. FTR, Amex uses EX, not EQ.

Re: Another myth buster for Amex PIF theory

B335is — Sat, 12 Jul 2014 19:01:19 GMT

OP congrats. I don't think this is necessarily ground breaking news though. There's many other factors involved in Amex CLI like new accts, income, ability to repay, does OP have mortgage/car loan, etc...

It is a good reminder that many of us get caught up in these common myths, but for the most part high util when requesting CLI doesnt usually increase chances. Its also a good reminder that ymmv is usually a good rule of thumb when online.

Re: Another myth buster for Amex PIF theory

Ubuntu — Sat, 12 Jul 2014 21:14:59 GMT

@robbulous wrote:
That's honestly incredible and it goes against everything I've read here. I guess it truly is YMMV!

+1 The goes against everything I've ever read abount Amex and pretty much all issuers in general. Maybe not back in the 90s or the early 00s but for recent times it's just amazing.

Re: Another myth buster for Amex PIF theory

Fico2Go — Sun, 13 Jul 2014 03:35:20 GMT

@Ubuntu wrote:
@robbulous wrote:
That's honestly incredible and it goes against everything I've read here. I guess it truly is YMMV!
+1 The goes against everything I've ever read abount Amex and pretty much all issuers in general. Maybe not back in the 90s or the early 00s but for recent times it's just amazing.

It's interesting that in October 2013 she apped and got approved for one AMEX card. The BCP with limit of $2000. Two months later approved for the BC for $7500. BAck then her FICO scores were averaging 710. Now 6 months after the BC approval her score is 653 and she received instant CLI to $20,000.

AAoA is slightly over a year. Total credit history is 3 years.

Re: Another myth buster for Amex PIF theory

Fico2Go — Thu, 17 Jul 2014 04:39:45 GMT

Just wanted to update everyone.

Yesterday was the due date for the sixth statement since getting approved for my BCP. Well today recevied an email saying my BCP cl had been auto increased to 11K.

So it seems the time of my auto increase conincides with the time when my wife received her auto increase of right around the due date of the 6th statement.

Btw my util ratio is 47% across 5 of my 7 revolvers. If this trend continues next month will be my 6 month for 3X CLI.

I'm in no hurry to need a cli so I think I'll leave the util ratio right about the same for next month and see what happens. In the worst case I'll just wait another ninety days to try again.