AMEX keeps dropping my limit

Anonymous · ‎04-03-2008

I've got two accounts with them. I've got large balances that I put there at fixed low rates. I started close to the limit, and now, every time I pay (I pay a lot more than the minimum), they drop my limit to right above my balance.

This has been going on for a while now, and I feel that I'm getting stuck in a loop here.

They check my credit, adjust my limit, my credit drops, which is reason to again drop my limit etc.

What am I going to do about this? Should I just call and ask them to stop? Anyone else have this issue?

I've got balance elsewhere too, what about paying the minimum on amex, (so that they cannot drop my limit all that much), pay off all other balances, so that my score increases, and then save a chunk of money and send a large lump to amex, hoping it will get me over some arbitrary score that amex uses as cutoff for limit reduction?

Thanks

redhed1026 · ‎04-03-2008

They've been doing this a lot to members lately. You can see that if you search the forums. Amex is a strange company to deal with. They often lower the limits over and over, and it is usually based on something they see on your credit report. Have you had any recent baddies? They also don't like when they see high util or maxed out cards. Have you tried calling them and ask what the deal is? Sorry that you are going through this. It's just another sign of the times we are going through with the credit crunch and such.

Anonymous · ‎04-03-2008

i have no bads at all. But overall UTL is about 50%. I have two almost maxed out cards, The AMEX accounts. It's just frustrating. I keep paying, and they basically max them out. (I don't use these for purchases or anything).

Anonymous · ‎04-03-2008

I think you should call them and ask them what's going on, and explain to them what you explained to us. The first person to answer the phone may or may not be able to help you, but maybe someone up the chain (an account specialist?) can.

Good luck.

Anonymous · ‎04-03-2008

hdj wrote:
I've got two accounts with them. I've got large balances that I put there at fixed low rates. I started close to the limit, and now, every time I pay (I pay a lot more than the minimum), they drop my limit to right above my balance.
This has been going on for a while now, and I feel that I'm getting stuck in a loop here.

They check my credit, adjust my limit, my credit drops, which is reason to again drop my limit etc.

What am I going to do about this? Should I just call and ask them to stop? Anyone else have this issue?

I've got balance elsewhere too, what about paying the minimum on amex, (so that they cannot drop my limit all that much), pay off all other balances, so that my score increases, and then save a chunk of money and send a large lump to amex, hoping it will get me over some arbitrary score that amex uses as cutoff for limit reduction?

Thanks

Unfortunately, AMEX is "chacing your balance". They are positioning themselves to close your account once the balance is paid off. I think the advice you have gotten is correct--you should call them to alleviate their concerns. If you are at or have ever been above 50% utility (combined credit utility or Amex utility) that is a major red flag for Amex. They don't "actually" want you to use the credit that they give you. So, if you are using that much it means you need credit, and if you need credit it means you have no liquidity....meaning Amex is exposed. It's a very tough position to be in, especially when you are trying your best to do all the right things. It's really frustrating...but don't let it get you down. Just prepare for the worst with Amex and make sure you have your bills in order.

Anonymous · ‎04-03-2008

I agree with the above poster. This is classic Amex chasing your balance. Be prepared for them to close your account. This *might* be avoidable by calling and explaining your situation, but I would plan for an account closure.

Anonymous · ‎04-03-2008

Thanks for the heads up. If I can't get them to stop what they are doing, I guess it would be best to close the account myself, rather than having them do it? (As soon as I can pay it off of course)

Besides it's impact on UTL, please remind me again why it is bad to close accounts? (these two AMEX accounts are my youngest ones, does that matter at all?)

I'm working hard to get out of debt entirely, and be in a position where I cary no more than 10%, and that being no more than a few $100. I don't really mind losing these accounts, as I won't need them in the future.

One more question, This "chasing my balance", besides its impact on UTL, does it have other consequences?

Thanks

Anonymous · ‎04-03-2008

No real other side effects other than util that I know of.

However, you might be able to talk them out of it if you call.

Anonymous · ‎04-03-2008

You should call them and if they are not willing to stop chasing your balance then you know they are trying to get rid of you so you should absolutely close the card as soon as you've made your last payment.

As far as what is bad about closed accounts... honestly, if they are screwing you there is nothing bad about closing them before they cancel your card. Generally, when you close an account you affect your UTL(which AMEX is already screwing you on) and your diversity of accounts (but if you have other CCs this is not a big deal). It will not affect your age of accounts or payment history because it will still appear on your CR for 10 years.

eta: changed the 7 years to 10. thanks cheddar.

Message Edited by dizzier on 04-03-2008 08:06 AM

Anonymous · ‎04-03-2008

@Anonymous wrote:
You should call them and if they are not willing to stop chasing your balance then you know they are trying to get rid of you so you should absolutely close the card as soon as you've made your last payment.

As far as what is bad about closed accounts... honestly, if they are screwing you there is nothing bad about closing them before they cancel your card. Generally, when you close an account you affect your UTL(which AMEX is already screwing you on) and your diversity of accounts (but if you have other CCs this is not a big deal). It will not affect your age of accounts or payment history because it will still appear on your CR for 7 years.

Wow. Great scores. I'll get there someday...