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Amex reduced credit limits. Are we back in 2008?

Turbobuick
Established Contributor

Re: Amex reduced credit limits. Are we back in 2008?

There's been several long threads about Amex chopping credit lines. Usually a simple phone call got them restored. They chopped mine from 24K to 12K for no reason other than I was only charging 5-6K per year. Basically, I gave them the finger and sock drawered the card. They didn't want my business, so screw them, I have a better grocery card regardless. Now I charge nothing, nada, nill, zilch and we're both happy. Waiting for the "closed account notice" coming next. 

 

 

Message 31 of 61
K-in-Boston
Moderator

Re: Amex reduced credit limits. Are we back in 2008?


@kdm31091 wrote:

Amex has long had a habit of giving out large limits on cards that are not necessarily related to usage. My guess is they are rolling back on that behavior because there's no point in extending a 25k limit to someone who buys a pack of gum on a card once every six months. Combine that with the current economic uncertainy and I think CLDs are a predictable outcome.

 

I'm guessing Amex will become stricter with limits and increases, more in line with actual usage, history, etc.


This isn't a case of sock-drawered cards padding utilization.  OP has been carrying a very large balance transfer with Amex while making minimum payments and applying for new credit.  This is not an economy thing; it's a risk thing, and is what Amex does when there is high risk from a cardholder in good times and bad.

Message 32 of 61
kdm31091
Super Contributor

Re: Amex reduced credit limits. Are we back in 2008?


@Turbobuick wrote:

There's been several long threads about Amex chopping credit lines. Usually a simple phone call got them restored. They chopped mine from 24K to 12K for no reason other than I was only charging 5-6K per year. Basically, I gave them the finger and sock drawered the card. They didn't want my business, so screw them, I have a better grocery card regardless. Now I charge nothing, nada, nill, zilch and we're both happy. Waiting for the "closed account notice" coming next. 

 

 


At the same time, with you charging $500 a month, what is the purpose of a 24k limit? You wanted it to pad your utilization, I assume, which is fine, but I understand Amex's point of view too. I don't think it's that they do not want your business. It's just that it makes little sense to extend such a huge limit for such little usage. I see both sides.

Message 33 of 61
iced
Valued Contributor

Re: Amex reduced credit limits. Are we back in 2008?


@Superduper2014 wrote:

@recoveringfrombk7 

 

Yes. I was planning on paying with my own funds. 

My strategy changed when I realized the economy will get worse before it gets better and since I had excellent credit I was able to get approved for more cards and it is my own personal opinion that I much rather pay a transfer fee, even if it is $600, in order to keep cash in the bank for whenever things get worse. If things turn around fast, I will be paying them all off. 

 

Also, if things don't get that bad and we miraculously stop this virus, then the fees paid for a bal tra were just like paying for insurance in mi mind. Everyone prepares for things differently, but having gone through the 2008 financial crisis and seeing what happened to credit lines, etc I got spooked and it seems that Amex got spooked with me too. Remember some banks are not even doing HELOCs anymore.

 

It is all about managing your own risk and for now I feel like using credit and holding cash is my best strategy according to my personal circumstances. The car application was for my girl friend. Not me. 

 

Also, since this thread has started to go into a direction that was not my intention. I hope the mods don't mind I start a new thread asking what is the best way to talk to Amex and try to reinstate my CL. 


Best


Does this strategy actually consider endgame scenarios? I’m not sure it does. Let’s see:

 

- Quick Recovery: you pay BT fees as insurance against problems. Some probability of net loss.

- Slow Recovery: you carry balances to keep cash. You pay more interest in the name of insurance. High probability of net loss.

- Slow Recovery + you are impacted (lose job, etc): you burn emergency cash and also have high balances accruing interest. Game over comes much faster due to higher starting debt.

 

Basically, your strategy is only effective with the best-case scenario but you’ve convinced yourself it’s a hedge against the worst-case scenario.

 

Debt is debt. You’re Robbing Peter to pay Paul while telling Peter it’s in his best interests. You already dug the hole, and this is just the latest reason you’ve given yourself not to fill it in. Using credit as a way to hold cash is as deceptively unsafe as people believing SUVs are safer because they’re theyre bigger than cars.

Message 34 of 61
Turbobuick
Established Contributor

Re: Amex reduced credit limits. Are we back in 2008?


@kdm31091 wrote:

@Turbobuick wrote:

There's been several long threads about Amex chopping credit lines. Usually a simple phone call got them restored. They chopped mine from 24K to 12K for no reason other than I was only charging 5-6K per year. Basically, I gave them the finger and sock drawered the card. They didn't want my business, so screw them, I have a better grocery card regardless. Now I charge nothing, nada, nill, zilch and we're both happy. Waiting for the "closed account notice" coming next. 

 

 


At the same time, with you charging $500 a month, what is the purpose of a 24k limit? You wanted it to pad your utilization, I assume, which is fine, but I understand Amex's point of view too. I don't think it's that they do not want your business. It's just that it makes little sense to extend such a huge limit for such little usage. I see both sides.


Yep, their choice and I'm not placing blame, I understand it's a simple business decision. They have choices, but so do we, they won't miss me and I won't miss them. I'm "thinning the herd". As we grow older, we tend to spend less... and I'm old. I have about 10 cards of which I use 5. If the others choose to give me ultimatums, then they get the finger too. Smiley Very Happy

Message 35 of 61
Superduper2014
Frequent Contributor

Re: Amex reduced credit limits. Are we back in 2008?

@Remedios 

OK will try this thread to follow through with Amex. 

 

Should I just call them and ask what happened and start there or should I try to figure out if they sof pulled me (how do I do this), before I call and be prepared to answer about these cards I applied for?

 

I applied for this cards last week, so there are NO new tradelines or credit cards in my report to spook them with real new credit lines, for all they know I could be denied for these other hard inquiries.

 

Also, should I offer the reinstatement for a higher large payment by a certain date or is this something they offer?

 

I am interested in continuing to use my ED card until Sept to maximize the 0 percent and also to get back my limits to keep my debt to available credit ratio as it was. 

 

Please advise on how to approach this so I can call (is today Sunday a good day to call Amex or credit cards in general)

Message 36 of 61
James_A
Valued Contributor

Re: Amex reduced credit limits. Are we back in 2008?


@Superduper2014 wrote:

... I don't want to sound alarming, but I am seeing what I saw back in 2008 and I remember well.


It sounds like you are trying to sound alarming. Smiley Wink But I'm not alarmed "remembering," because 2008 wasn't terrible for everyone. For me it was a great year financially. CV-19 or no CV-19, many people will thrive in the days, months & years ahead. 

 

Hey, good luck getting that CL restored. Do update when you've gotten an answer. Pulling for you. 

Starting Score: (5/24/2018) -- FICO 08 EXP: 643; FICO 08 TU: 642; FICO 08 EQ: 677
Current Score (3/12/2021): FICO 08 EXP: 748; TU: 755; EQ: 773
2020 Goal Score: 760 across the board


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Message 37 of 61
Saeren
Mega Contributor

Re: Amex reduced credit limits. Are we back in 2008?


@Superduper2014 wrote:

@Remedios 

OK will try this thread to follow through with Amex. 

 

Should I just call them and ask what happened and start there or should I try to figure out if they sof pulled me (how do I do this), before I call and be prepared to answer about these cards I applied for?

 

I applied for this cards last week, so there are NO new tradelines or credit cards in my report to spook them with real new credit lines, for all they know I could be denied for these other hard inquiries.

 

Also, should I offer the reinstatement for a higher large payment by a certain date or is this something they offer?

 

I am interested in continuing to use my ED card until Sept to maximize the 0 percent and also to get back my limits to keep my debt to available credit ratio as it was. 

 

Please advise on how to approach this so I can call (is today Sunday a good day to call Amex or credit cards in general)


You're overthinking it. Your options are limited to what they offer you. Call them and ask them how to get the limit restored. The sooner you call, the better. They will ask you to pay off a chunk of your debt by a certain date. If you do that, limit is restored. Be prepared to be asked for a substantial pay down. By the time they get to CLD, they aren't playing around. 





Message 38 of 61
K-in-Boston
Moderator

Re: Amex reduced credit limits. Are we back in 2008?

+1 what @Saeren wrote.  Any day is a good day to call Amex; no need to call during normal business hours Monday through Friday.  

 

The inquiries are visible to Amex if they have soft pulled you on a bureau showing them. Whether new accounts exist or not, it's still a record that you have recently applied for further credit.  They pull at least monthly for Experian as an account review and to provide your score.  When there is elevated risk they may do it more often or extend the reach.

Message 39 of 61
Superduper2014
Frequent Contributor

Re: Amex reduced credit limits. Are we back in 2008?

@James_A 

Ha! Yes.. I am sounding alarming. Thanks man. I will post as soon as I talk to them. I hope to be at least the same after all of this is said and done. 

 

@Saeren I am the kind who overthinks too much. It has gotten worse as I age. Smiley Happy 

 

@K-in-Boston I will call today. Thank for all your help and putting up with me. 

Message 40 of 61
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