I just brought this up buried in another thread where someone received a large CLD from Amex on an account that they weren't using heavily enough for Amex. We've seen probably 3-4 of these reports in the last several weeks where a CLD was issued due to not using enough of the current limit.
I'm wondering here if "high balance" may be a factor at all. Perhaps Amex looks at one's high balance relative to the credit limit and uses that ratio in part. In order to try and determine if this may be a factor, it would be great to hear from those that have had their Amex CL suddenly reduced due to not using enough of it with the following information:
- What was your pre-CLD CL
- What is your current (post-CLD) CL
- What is the high balance on your account listed on your CR
- When was this high balance from (6 months ago, 12 months ago, etc)
- If your high balance was from > 12 months ago, what was your highest balance during the last 12 months?
I think we talk about spends a lot, but not all spends are created equally. For example, take two different people that spend $6000 on their Amex card in total over the course of 12 months:
Cornelius spends exactly $500/mo on his Amex card with a $10000 limit. This works out to $6000 over the course of the year.
Rupert spends only $5/mo on his $10000 limit Amex card for 11 out of 12 months of the year, but spends $5945 on it in 1 month. This also works out to $6000 over the course of the year.
Assuming these two individuals pay in full every month, Cornelius may possess a $500 high balance on his CR where Rupert has a $5945 high balance. When thinking about these two identical spends, there's no reason that Cornelius "needs" a $10k limit on a $500/mo spend. Amex could cut him by 50% to $5000 and it would still be a perfectly comfortable limit for him. On the flipside, if Amex were to cut Rupert's limit by 50%, he would not have been able to make $5945 in purchases on a $5000 limit without making extra payments; Rupert "needs" the greater limit more than Cornelius, even if it's just in 1 cycle out of the year.
Of course this is just all thinking out loud and it's possible that high balance plays no role at all in Amex's CLD considerations, but I think it's fair to believe that it may. Perhaps if those 3-4 people that have seen large Amex CLDs lately stop by this thread they can share the numbers I requested in the bullet points above and we can analyze a little bit more the potential impact of high balance on Amex CLDs.
