Amex Decreasing Unused Limits!

[Gmood1]

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@Anonymous wrote:

It would seem to me that Amex should tackle the root cause of their "problem" here, which isn't people with high CLs that aren't [significantly] using them, but rather giving them out in the first place.  To me, it's like they're creating the problem in the first place and then seemingly fixing their mistake.  I say mistake here because the issue is them giving greater limits out to people like me that are using less than 1% of their current limit.  Rather than doing after the fact house cleaning by issuing CLDs, why not work on the formula or criteria required for CLIs and design them to make more business sense? 

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I believe some here, forget the percentage of people that even know about a 3x CLI is very very small. If you haven't researched it or know someone that comes to this site. Chances are you have no idea it even exists. BBS yours and my Amex credit limits are a drop of water in a large pond, when compared to the 113 million plus Amex cards issued worlwide.

[redpat]

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@Anonymous wrote:

It would seem to me that Amex should tackle the root cause of their "problem" here, which isn't people with high CLs that aren't [significantly] using them, but rather giving them out in the first place.  To me, it's like they're creating the problem in the first place and then seemingly fixing their mistake.  I say mistake here because the issue is them giving greater limits out to people like me that are using less than 1% of their current limit.  Rather than doing after the fact house cleaning by issuing CLDs, why not work on the formula or criteria required for CLIs and design them to make more business sense? 

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I don't think they will change that.  By giving a cosumer a instant CLI most creditors want to see more usage from that increase without them having to jump through hoops to get an increased CL.  It is much easier to roll them back for none usage and they could careless if they lose that customer because they weren't making money on them in the first place.

BBS, watch out for your limit.........It will be more for me, lol!

I used to run some big biz and personal spend on CSR w/ a 50k limit and now it's in the SD, I will completely understand if that limit gets reduced.  Unless Chase goes 5x airfare, 4x dining and grocery it will remain there.

[Anonymous]

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@Anonymous wrote:

Actually banks issuing credit look at the 15-30% mark historically.
That means if your only using $400.00 on an average credit line of 16K, your only using about 1.5% of your available credit.If ey stay nhat percentage they are losing tons of cash even with a high risk credit ;lone.
Think about itmlike this if you charge only about $400.00 per month, and mostn likely pay the balance off, it removes a larger profit gain, even if most of the accpunts end up in a chargeoff.
The reason I say this is if they reduce your available credit lines, and placed them just one account differential it would add some 32 more accounts at $500.00, the nubers would say they are most likely quadruple their return amng the 32 versuses your high credit line.

I think a high crredit libe is damaging over all, it stagnates economic growth if it's not being used, and deprives investors,  companies and State/local, and Federal goverments of needed monies.

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Amex gets 2/3 of 9bil income from interchange fee. With a 3% per swipe, assuming 100mil cards out there, its about $2000 spending per year per card. Thats less than $200 per month.

Average credit limit is about 8k, no doubt amex's average credit line is probably higher, but either way, 200/8000 comes to 2.5%. I don't see any legit reason to say spending 400/month on the card is not enough. I mean, Its doubling the average, what can amex realistically demand if this is not enough?

High credit line of 15k stagnates economic growth? lol, you will have to provide more data and research for that bold statement.

[longtimelurker]

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@redpat wrote:

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@Anonymous wrote:

It would seem to me that Amex should tackle the root cause of their "problem" here, which isn't people with high CLs that aren't [significantly] using them, but rather giving them out in the first place.  To me, it's like they're creating the problem in the first place and then seemingly fixing their mistake.  I say mistake here because the issue is them giving greater limits out to people like me that are using less than 1% of their current limit.  Rather than doing after the fact house cleaning by issuing CLDs, why not work on the formula or criteria required for CLIs and design them to make more business sense? 

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I don't think they will change that.  By giving a cosumer a instant CLI most creditors want to see more usage from that increase without them having to jump through hoops to get an increased CL.  It is much easier to roll them back for none usage and they could careless if they lose that customer because they weren't making money on them in the first place.

BBS, watch out for your limit.........It will be more for me, lol!

I used to run some big biz and personal spend on CSR w/ a 50k limit and now it's in the SD, I will completely understand if that limit gets reduced.  Unless Chase goes 5x airfare, 4x dining and grocery it will remain there.

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This, and GMood1's comment as well.  My guess is that for the great majority of users (i.e. those who do not frequent forums like this), those that are aware a CLI is even possible are going to request only when they have a real need (e.g. before a major purpose).   So the issuers will see the CLI at least partially used, at least once.    Whereas here getting CLIs is seen as an essential part of life and proof that you are loved by the issuer!

[UpperNwGuy]

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@Gmood1 wrote:

Sorry to read this happened to you OP. What I'm not understanding is, why is it so difficult for some of you to allow your balances to report?

It's really not hard to do. I have Amex cards that go months without any use at all. The limits haven't been reduced as yet.

Let your balances post and then pay the bill. It's really that simple. 

From what I've experienced over the last few years of obtaining CC's is, your credit limit exposure isn't necessarily tied to a single lender's spend. When they do AR's, their system is scanning your revolving spend across all of your CC accounts not related to them. If you're not reporting the spend. Those other lenders may see you as not a viable customer that uses CC's often.

For some reason, folks think they're accomplishing more by paying the balances before they report. I'm almost certain, the majority of the members here with fairly high exposure are allowing their balances to report. You'll always have a few outliers, but in general that seems to be the case in this forum IMHO and experience.

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Wise words.

[Anonymous]

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@Anonymous wrote:

It would seem to me that Amex should tackle the root cause of their "problem" here, which isn't people with high CLs that aren't [significantly] using them, but rather giving them out in the first place.  To me, it's like they're creating the problem in the first place and then seemingly fixing their mistake.  I say mistake here because the issue is them giving greater limits out to people like me that are using less than 1% of their current limit.  Rather than doing after the fact house cleaning by issuing CLDs, why not work on the formula or criteria required for CLIs and design them to make more business sense? 

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I am 100% in agreement here. It’s not a good business decision to give someone large limits and then pull them back later for seemingly no reason. As we have seen, customers tend to take this personally and won’t hesitate to close their accounts for this behavior and quite frankly I don’t blame them. I use two Synchrony cards and have the full knowledge that they could CLD me one day and I have thus chosen to accept that risk vs the rewards that they give me but the average consumer is going to see their limits slashed and flip their lids. If it’s such a risk to Amex and it costs them so much money, they shouldn’t give them in the first place. 

I mean seriously, if someone started off with a $2500 line and only averaged $50 a month of charges, what is the expectation when you give them that 3X CLI to $7500? Do they honestly believe that suddenly people will spend more? 

[kdm31091]

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@Anonymous wrote:

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@Anonymous wrote:

It would seem to me that Amex should tackle the root cause of their "problem" here, which isn't people with high CLs that aren't [significantly] using them, but rather giving them out in the first place.  To me, it's like they're creating the problem in the first place and then seemingly fixing their mistake.  I say mistake here because the issue is them giving greater limits out to people like me that are using less than 1% of their current limit.  Rather than doing after the fact house cleaning by issuing CLDs, why not work on the formula or criteria required for CLIs and design them to make more business sense? 

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I am 100% in agreement here. It’s not a good business decision to give someone large limits and then pull them back later for seemingly no reason. As we have seen, customers tend to take this personally and won’t hesitate to close their accounts for this behavior and quite frankly I don’t blame them. I use two Synchrony cards and have the full knowledge that they could CLD me one day and I have thus chosen to accept that risk vs the rewards that they give me but the average consumer is going to see their limits slashed and flip their lids. If it’s such a risk to Amex and it costs them so much money, they shouldn’t give them in the first place. 

I mean seriously, if someone started off with a $2500 line and only averaged $50 a month of charges, what is the expectation when you give them that 3X CLI to $7500? Do they honestly believe that suddenly people will spend more? 

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I understand what you're saying, and to me it is possible that they could tighten up on CLI policies as well as doing these CLD. But time will tell, I don't want to make anyone panic. Just saying we could see CLI policies change since the majority of us around here going for the 3x CLI don't really "need" it and aren't going to use a large portion of it.

[Anonymous]

I would be all for them actually tightening up their CLI process honestly. If someone is never using more than 30% of their limit, they don’t need an increase. I would rather be denied increases than have limits slashed later. It’s not a scary thing when you get denied a CLI but if you suddenly log in or get a letter and see your credit limit has been slashed, I don’t know about you but the first thing I would be doing is pulling all of my credit reports to see what happened. 

[Anonymous]

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@PDXoriginal wrote:

The days of free flowing credit are coming to an end. Companies started tightening their belts last year and it is only going to continue. People are getting behind and they don't want a repeat of 2008, they are identifiying potential loss points and shrinking them.

Banks are going to look at overall avalible credit, and the number of open cards. If you are not utilizing your avalibe credit or can demonstrate you are a good "candidate", they are going to remove that potential loss point.

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I don't see that happening.  My last two Amex cards came with initial limits of $30k.  And this is in the last couple of months.   I have gotten huge limits from every card I apply for.  And have had no reductions from anyway even from cards laying dormant for over a year.  And I never carry a balance.  

I think we are at an all time high in credit card debt. Amex is more conservative lender than a lot of other issuers.

[Anonymous]

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@simplynoir wrote:

I'm actually curious if this is going to be a trend from AMEX going forward what exactly do they look at. Does AMEX take the entire credit profile into consideration or is this on a card-by-card basis?

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Amex considers all your cards with them as one account.   I don't think I would see it as a trend. OP says they never used more than 5 percent of their limit and the limit of the card was high compared to their income.