Talking from recent experience. I am a new Amex holder (Zync) - 1 1/2 months to be extact and have been FR. After speaking with the representative of what caused this - I just bought a new vechicle and had inquires. Now I knew about this practice thanks to the forum, I still do not like the way it is handled. Charging is suspended. What happens if I was on a cruise and this was the only card I took to use for vacation! Sending in the documentation is not that bad...they tell you what to fill out (you do only have 5 days to comply). I did not have to pay any fees to the IRS and never heard back from them until they sent an email stating they put a $3000.00 spending limit on my card and that this will be reviewed at a later date to see if it will be lifted. The process itself was painless....but it did take 3 weeks to complete. Did I think it was invasive...not really, credit card companies always ask for your income..Amex just calls you out on it. I was concerned as last years income was about less than what I stated (new income from new job). I was not asked to explain this or provide current paystubs which I was willing to do. Only thing I learned from this - I will ALWAYS carry a back up card.
+1 on that. AMEX is just doing it's due diligence to protect itself. However, I always carry a back up card in the event an FR is triggered. I used to use my AMEX PRG heavily and have dropped off spending signifigantly on it and pushing on using my Chase SP instead due to this remote possiblity. If they were to FR me, I'd comply but I'd be a bit miffed. I PIF and have never missed a single payment and an FR would be a kick in the pants.
I was finacially reviewed after spending $2000 on a new card. The income I put down was 35000, although they had it as 42000 somehow. So charging 6% of your income is somehow risky to them? The first charge I did with PNC was 4 or 5000, I cannot remember. They did block it at first because of the large amount, but when I confirmed it was me they let it go through. To date I have spent more than stated income with them and they have not said anything. With Chase and FIA I charged up to the limits on all of the cards I have with them multiple times and not a peep came out of them. FIA never even blocked the large purchases. I know every lender is different, but a financial review when others do not even care is a bit odd.
Technically speaking taking that $35000 number, while that's roughly 6% of your annual gross income, that's not the way Amex likely factors it. They almost certainly divide your estimate of post-tax income by 12 from eons ago as charge cards are all term one month (probably applies to their revolvers too but that's just a pure swag). Ballparking that's what $5K tax burden assuming single / nothing fancy?
So by napkin math, $30000/12 = $2500, and as such you spent 80% of your monthly income. I can see Amex's potentially raising a flag on that one.
CS: this sort of example is what I meant by my probably screwing up somewhere: if my expenditures outstrip my reported income or come close to it in a given month, Amex may have an issue with it expecially as I don't have any history with them to date. Going to have to see frankly, but hopefully I don't blow it this month, even though I'm of the opinion it's not a big deal, I'm a little on edge that I'll trigger it even with $2500 spend at a monthly post-tax income of roughly $6800 reported.
Should've pushed that bedding purchase till next reporting statement.... this forum does wonky things to my head sometimes .
For what it's worth, not everyone even gets the possibility of a financial review.
In my "first marriage" to AmEx as it were (we have a very off-again on-again relationship ), they closed my card with 11 months of perfect payment history and offered no chance of financial review. At the time I had no new baddies on my report in those 11 months, so whatever they saw I didn't see it. I specifically asked them if I could voluntarily have them review my finances....and they said no dice.
Their loss in the end, since a month later my first annual fee would have come due.
So far, the "second marriage" has come with no FR and zero hassle. But if they were to want to FR me, I'd probably comply. The quality of their customer service and card benefits is sufficiently high that I regard the relationship with them as one well worth working to maintain.
If I got the same shenanigans from the likes of Credit One, Capital One, or even BofA, I'd kick them to the curb and find another lender. The quality just isn't there, and I'm not going to work for it.
I thought we had pretty much got confirmation from Amex long ago that FR's are random by system kind of like Bankruptcy in United States... Only what 3% I think is what was said after Housewife NJ people got audited.... did we really ever hear before that of someone getting audited and then almost arrested for it? no... without reading on this forum I don't think most of us would think any differently about an Amex FR
we were on number 4 before sara called and closed the cards and told them to shove it! every 6-7 months it would happen, the wanted hers, mine, ours. her's again etc.... always some complaint from their end.! chase has never jacked with us the way amex did
Every 6-7 months??!! Aren't they just requesting the same information from the IRS then? That seems redundant if they already requested the transcripts to keep requesting the same information...no matter how many times they get them the information would be the same I ws hoping that once I went through it I wouldn't have to for awhile (if ever again). Anyone else been FR'ed more than once??