Amex - Change in Terms - No Over the Limit Fee

[Want2BDebtFreeNow]

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?

[Anonymous]

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..

[Want2BDebtFreeNow]

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......

[Anonymous]

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@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?

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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."

[Anonymous]

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

[jorin]

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. 

[Jazzzy]

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...

[Watchmann]

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

[jorin]

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...

[Anonymous]

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?