Amex Credit Line Reduction& Pushing out of unwanted customers by Amex.

[Anonymous]

Here is a situation with the Amex (charge card) HHonors card that I wanted to share with the community and appreciate any thoughts about this.

We all know that Citi sold their HHonors card business to Amex at the end of 2017 and the new Amex branded cards started shipping out at the start of 2018. It is my understanding (from a Citi executive) that in the contract of sale , Amex had to accept all good standing Citi account holders i.e. no 3 week+ late payers no defaults no maxed out accounts, 670 minimum Fico's on all 3 bureaus  etc etc, EVEN if those Citi account holders happened to be on an existing Amex " black" list. At least for the 1st  10 to 12 months of Amex issuing  them a HHonors card. Thereafter Amex were free to "push out" unwanted customers, even if that customer had maintained their Amex HHonors account in good standing. How one may ask.

Well here is one unofficial method. By suddenly reducing the account holder"s line of credit to $100 above the current outstanding balance (temp authorisations included ). Even if that person happened to have $ 2K or more   of unused available credit on their card.

This is my personal experience.

Suddenly received an email from Ax informing me of a CLReduction on my acccount. They wiped out $4,500 off my unused line of credit ($13,500). I had been carrying a balance of $8,700 for the past 2 months . When Amex took over the account from Citi in Jan. 2018, I had an outsatnding balace of $5,910. Between Jan. 2018 and Sept. 2018 the balance had gone down to $3,000 at one point. Certainly nothing to panic about as I never went over 65% of usage of available credit. Not ideal above 30% usage, I know. But still unwarranted to wipe out all available CL as Amex suddenly did. Never a missed or even a late payment. On ANY accounts in my CReport with all 3 bureaus. No bankruptcies no judgements no negatives. EX 720 EX 710 TU 731.

Except for one fact. In 1989 I never paid my Amex Platinum card balance ( circa $10k) ( personal problems) and they had to close account. I know that I was on their "black list" ever since. Yes , even 28 years later.  Hence , their ability to "push me out" as an unwanted customer, now that the time element has passed in their contract with Citi.

How many agree or disagree with my theory of Amex"s "unwanted customer".  Thank you

[Remedios]

So, what you're saying is that Amex is being cautious due to high utilization because you did not pay them in the past....


I'm lost

[K-in-Boston]

I'm not sure whether this is a matter of being previously blacklisted.  Your Experian score is only 720, so with everything else being clean as you report, it sounds like you may have very high utilization all across the board.  (I was in the same boat for years.)  It's at least the case for this card.  $8,700 balance on a $13,500 card is 65% utilization.  If you were not making substantial payments on that, Amex may have been spooked that you would default - especially if you are also carrying large balances elsewhere.  And continuing to carry a large balance, paying some of it off, then running it right back up again is also a risk factor.

By balance chasing you, Amex is reducing their risk.  If this was a case of just shutting you out due to a previous blacklist, I'm pretty sure they would just close your account.

[Anonymous]

I am sorry that this happened to you, especially right before Christmas. I know it is easy to take the decisions that the credit card companies make personally, but it really isn't-it is just business. The credit card companies have a great amount of risk by lending out their funds to all of us and run monthly (or more often) risk analysis of our accounts. These computer-run formulas can look at a variety of factors: current balance; how long the balance has been revolving; credit score; overall debt (including other bank cards, installments etc) and inquiries. I cannot speak to what Amex looks at specifically, but there may have been a variety of factors in the CLD besides just being black listed from an unpaid Amex charge card from 1990. It has been theorized here in the past that Amex does not like balances revolving for long periods of time on their credit cards. 

If you have been following the stock market and other financial news you will know that the economy is starting to show signs of cooling off. The banks are looking at their balance sheets and cutting available credit and possible losses where they can. 

I know it is upsetting, but try to not dwell on it for the time being. It was not personal. Have a happy holiday with your friends and family

[Shadowfactor]

By balance chasing you, Amex is reducing their risk.  If this was a case of just shutting you out due to a previous blacklist, I'm pretty sure they would just close your account.

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I agree. The previous charge off may have increased the chances of the balance chasing but if Amex really wanted to end the relationship. They would have found some loophole and just closed the account.

[kdm31091]

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@Shadowfactor wrote:

By balance chasing you, Amex is reducing their risk.  If this was a case of just shutting you out due to a previous blacklist, I'm pretty sure they would just close your account.

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I agree. The previous charge off may have increased the chances of the balance chasing but if Amex really wanted to end the relationship. They would have found some loophole and just closed the account.

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There's no need for them to find any loophole to close an account. Issuers have the right to terminate your account with or without a reason at any time. Amex may have had to "accept" the previous cardholders, but that means nothing about keeping them. They are free to have whatever standards they want and to terminate accounts or lower limits whenever they want.

As far as the OP's issue, it's not all that surprising. Large balances being carried tend to make someone a candidate for CLD with any bank, but especially with prior poor history. Try not to take it personal OP, it's just computer based decisions that will probably be occuring more frequently as the economy slows.

[NRB525]

OP, I agree with the others that if a bank ( any bank ) wants your account closed, they will simply close it. If they are concerned about risk, they will balance chase until they feel less risk.

Can you clarify how your balances are structured. Are you carrying a base amount on the card, charging a few hundred per month and paying a few hundred per month? Or consistently charging $4,000 per month and then paying all that so that you are not paying interest?

I have been through both balance chasing and closing of accounts. Lenders get worried about high utilization.

And a point of clarification, all the Hilton AMEX cards are Revolvers, not Chargers. The Platinum is a Charger.

[K-in-Boston]

[Mod Note: Posts have been removed for violating the Terms of Service and the myFICO FSR policy.  @Anonymous the offending post was not @Priory_Man but the user he was quoting.  Let's keep any and all replies on the subject at hand.]

[Shadowfactor]

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@K-in-Boston wrote:

[Mod Note: Posts have been removed for violating the Terms of Service and the myFICO FSR policy.  @Anonymous the offending post was not @Priory_Man but the user he was quoting.  Let's keep any and all replies on the subject at hand.]

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I was just typing out a response to try to end the negative posts. You beat me to the punch 

[Anonymous]

Yes, you are correct. I meant to write revolving card and not charge card.

My usage monthly varied. But I always paid 3 times over whatever the amount charged was on that paticular month's statement.