Comments on: “American Express has lost its mind”

By: Rich

Rich — Sun, 01 Nov 2009 22:51:25 +0000

To all you folks that are pissed off at your UNSECURED credit card companies I have one simple suggestion. Don’t pay them. What can they do besides ruin your credit for awhile. Remember the “loan” is unsecured. After you miss a payment or two I’ll bet you see the rate come DOWN.

By: ed

ed — Wed, 19 Aug 2009 22:46:00 +0000

BofA is doing the same thing…When I called them to inquire why the increase in interest rate, they told me that “everybody’s doing it”. I told them that I have a 760+ credit score, used their card exclusively for the last 20 years, spend close to $40k/year on the card and last year paid almost $500 in fees and interest (did a lot of international traveling…those exchange fees can build up fast!) I said that with the minimum plus prime they were going with would bring my interest rate to 23%! I asked if there was any negotiation…she said “no”. So I said that I will be leaving…she said “good luck, everybody’s raising their rates”. I went to my Credit Union an they offer a MC at 7.5%, fixed…and they aren’t planning to raise their rates…I asked…
I didn’t cancel the card…that wouldn’t be smart! I have 20 years of credit history with that card…cancel the card and your credit history disappears with it!
I still have the card…I just don’t use it. Instead I use my Shell mastercard (1% back on all purchases) and pay it off monthly…So there BofA! And I was overjoyed when the BodA board members ousted the BofA president from the board! Yay!
Ed

By: larry bradley

larry bradley — Wed, 19 Aug 2009 11:27:56 +0000

Amex issues both charge cards and credit cards. I got the same notice for my Amex Hilton credit card. The Delta Sky Miles card is also a credit card, not a charge card. So Amex is misleading in their response. In any event, card companies have lost billions by being stiffed by consumers filing bankruptcy etc and there are using their better customers to make up for this. I really don’t care what the rate is since I never carry a balance. The card is merely a convience tool for paying for stuff.

By: Stephen - NYC

Stephen - NYC — Wed, 19 Aug 2009 02:58:07 +0000

To SirWired:
As you know, there is a difference between “3% and 3 percentage points.” As a math major, it always bothers me when I hear or read that something increased 3%, but in reality it was increased 3 percentage points. To use the percentage rate increase even if it applies to percentage values is perfectly fine.
Here in NYC, the city’s portion of the sales tax recently got jacked up from 4% to 4.5%. It increased half a percentage point. Or you could say that the city’s portion of the sales tax rate increased by 12.5% (0.045 – .040 = .005 & .005 / .04 = 0.125).

By: Capt. Joe

Capt. Joe — Tue, 18 Aug 2009 15:20:47 +0000

The AMEX card may have been the ‘traveler’s card’ once, but no longer. I spend a lot of time in the Caribbean and most stores and restaurants won’t take it. Only the businesses which cater almost exclusively to tourists (like around cruise ship docks) take AMEX in the Caribbean. Business owners I’ve spoken with tell me the card is unusable for most businesses because AMEX is too expensive for them. Among the complaints: AMEX is slow to reimburse businesses, they charge business higher fees than Visa or Master Charge, and, as with retail customers, the international exchange rates they use always handsomely err to the benefit of AMEX. My advice is if you’re going to leave home, don’t take the American Express card with you as most of the stores and restaurants you go to won’t take it. It will just be useless weight you’re carrying around.

By: ronald phillips

ronald phillips — Tue, 18 Aug 2009 14:58:12 +0000

It seems to me this is becoming normal for businesses to punish their existing long standing and loyal customers by these impulsive changes to business rates and expectations. I personally think that if I realize that all of a sudden a “new” customer gets a better rate or deal than me, a long time loyal customer, then I leave. Phone companies do this too. They suck new customers in with rates that I would really like to have and they should offer me if I’ve been with them awhile. Credit card companies should be the same way. My credit is stellar and yet they still dare to piss me off when these shenanigans? Well, then it’s time to find a new credit card, a new bank, and be a ‘sought after’ customer again…

When did companies lose their way? Burying increases in their rates with bogus fees, exposing me to their screwed up business models by making me pay additional fees along side the normal price of admission, for facets of a service that used to be covered in the “price of admission”.

Filing fees, administrative fee, service fee… Now, we have to contend with credit card companies who have grown fat from years of american consumer gluttony and now can’t afford to eat and gorge themselves on the bounty that comes with the “good times”. Instead of leaning up and returning to a leaner lifestyle, they are gunning down their customers with devious obstacle courses and mazes that instantly penalize wrong turns and mistakes, sloughing off the largesse to satisfy their sickening appetites…

I’m pro-business, pro-capitalism… But the banking and service industry have become insatiable pigs and threaten to suck the life out of what used to be a normal symbiotic relationship between merchant and customer. Now merchants treat me like I’m a dependant, penalizing me for asking them to perform a service.

If a credit card company or any other business is treating you like a second rate inconvenience, leave ‘em… leave ‘em twisting in the wind. And while you are at it… make sure you tell a few people. Thank you Elliot for giving the traveling consumer a voice…

By: Dave

Dave — Tue, 18 Aug 2009 14:44:00 +0000

Hi! If you’ve kept your Amex for Costco, get a Costco Amex! No points, no miles, instead get cash back – 3% on gas and restaurants, 2% on travel and 1% on everything else. No fee. I don’t remember the interest rate as I never pay it.

By: What You Can Do About Rising APRs?

What You Can Do About Rising APRs? — Tue, 18 Aug 2009 12:01:03 +0000

[...] hand, it seems incontrovertible that APRs are going up. For some evidence of this trend, look here, here, and here. The question is, what can you do about [...]

By: Guaranteed Credit Cards Now » Blog Archive » What You Can Do About Rising APRs?

Tue, 18 Aug 2009 00:59:00 +0000

[...] it seems incontrovertible that APRs are going up. For some evidence of this trend, look here, here, and here. The question is, what can you do about [...]

By: Carrie Charney

Carrie Charney — Mon, 17 Aug 2009 22:53:07 +0000

I only keep my AMEX card for quarterly or so trips to Costco. Wonder if Costco will lose business over this.

By: brian from nodebtworldtravel.com

brian from nodebtworldtravel.com — Mon, 17 Aug 2009 22:50:01 +0000

All the credit card companies are doing this – dropping credit limits and raising interest rates on perfectly good customers who pay on time or pay off cards completely. $53K to $1K is ridiculous and an insult. I’ve had cards drop by a large percentage also. EVERYONE is deemed a risk by credit card companies nowadays.

By: Jeanne

Jeanne — Mon, 17 Aug 2009 19:26:05 +0000

Please forgive the following question: Is American Express about to go belly-up? Sorry – I know that sounds like a very silly question. But it seems to me with such a major restricting of credit out-flow to so many customers, and a substantial raising of their fees, that it sounds to me like they’ve got a serious cash-flow problem. Maybe I’m just not understanding what’s going on? (Probably my ignorance.) Any thoughts out there?

By: Rocky

Rocky — Mon, 17 Aug 2009 17:16:53 +0000

AMEX dropped the limit on my Starwood AMEX from $53,000 to $1,100 overnight. This despite being a “member since 1993″ and regularly charging and paying off thousands of dollars on the card. (According to my records, about $600,000 in purchases.)

By: Nicole

Nicole — Mon, 17 Aug 2009 16:40:08 +0000

I have to questions Amex’s response that not all customers are getting the letter. I have a regular Amex card, not platinum (I refuse to pay a fee for any card) that I pay in full each month, but I got a letter with the following fee increases.
APR for Cash Advances: Prime + 21.99% = 25.24% (currently)
APR for Late Payment: Prime + 23.99% = 27.24% (currently)
legalese: this rate will apply “unless a higher rate applies”.
Late Fees: $19 if previous balance is less than $250
$39 if greater than $250

These rates are ridiculous. What happened to “usury” laws? It occurs to me that Amex is really trying to punish anyone who might make an occasional mistake or late payment.

By: Elisabeth Osmeloski

Elisabeth Osmeloski — Mon, 17 Aug 2009 15:36:09 +0000

Same here, loyal SkyMiles AMEX card holders with large available balances, got slashed by a total of over $40K in several cycles, in addition to the rate hikes, which I agree should have never been allowed by this grace period, of course they were going to hike them while they could!

what they did on one of our cards was lower drastically to just barely above the current balance, which hadn’t yet been paid off for the month, then a few months later, when that balance was much lower, they dropped the limit drastically again. Quite frankly, I’m lucky I was floating a small balance there for a short period.

What this credit slashing effectively does:

1) lowers the available credit to debt ratio for customers, effectively hurting cardholders in good standing with good credit scores, since that is still a factor in computing the scores. While AMEX claims they are doing this to prevent people from getting into further credit trouble in this economy, it’s actually having a negative impact, particularly by hurting those who can actually afford to put money back into the economy (responsibly).

2) With such high limits on our cards, we’d previously been able to put major purchases ($10-20k) & book high ticket item travel as well (some used for my small business -hopefully i can transition to a business account & get a higher limit, but I doubt it b/c the appeals ‘process’ to get our limits higher was a dead end) and then balances paid off, to earn mega-miles on Delta. Great, since we live in a Delta hub city. Now, that perk of being a SkyMiles member and Platinum AMEX holder is effectively gone.

Delta and other Travel partners of AMEX should put some pressure on them, because I could see this potentially hurting the leisure travel market even further when consumers aren’t able to take advantage of the great deals offered by AMEX partners.