Point of action to fight back against AMEX's recent abusive customer practices!

[cascadiance]

I've been reading other threads here and other places of people talking about the same experiences I've been having with AMEX, where they are abitrarily trying to limit their debt liabilities by hacking away at people's credit limits to the point it is just a small amount over what they owe or making it a pretty small amount if they owe nothing, and jacking up their interest rates to the point that people's credit ratings are being hit hard as well as their ability to use these cards in any effective way without incurring fees.

http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=4955802&mesg_id=4956375

Companies like Costco, have exclusive arrangements with AMEX, that doesn't allow them currently to accept credit sources other than cash or debit cards, which basically makes them hostage to these practices that AMEX is engaged in, causing many people to also stop shopping at Costco. They have at least a couple of years on this contract, which might really put them in trouble.

Here are some links that describe these problems...

Kevin Johnson, an entrepeneur who has experienced some of this first hand has his own web site documenting all of these problems with AMEX... I've been in contact with him on the issue with Costco. He was the one that noted to me that Costco's hands are currently tied with a contract that forces them to only take AMEX cards.

http://www.newcreditrules.com/

Here are other links that document this problem...

- AMEX's "dumping" of its customers appears to be tied to this report of them losing massive amounts of money...

http://www.newcreditrules.com/newcreditrulescom/2009/02/american-express-profit-drops-79.html

- More people complaining of credit limit cuts and other abuses by AMEX

https://www.wesabe.com/groups/9-paying-it-off/discussions/2506-anyone-have-their-credit-limit-cut
http://www.ripoffreport.com/reports/0/424/RipOff0424097.htm
http://www.my3cents.com/showReview.cgi?id=47418

Now companies like AMEX are "converting" themselves into banks to qualify for the bailout moneys and turning around and screwing us taxpayers after stealing from us through the government our money...

http://www.huffingtonpost.com/arianna-huffington/the-credit-card-debt-cris_b_169657.html

...For their part, the bankers have tried to cloak their behavior with corporatespeak. A Citibank spokesman called the rate hikes the result of "severe funding dislocation," and said, "Citi is repricing a group of customers in our Citi-branded consumer credit card business in the U.S. to appropriately manage these risks." An AmEx spokeswoman chalked up its rate hike to "the cost of doing business."

Making such pronouncements particularly galling is the fact that many of the banks summarily raising interest rates and piling on the penalties have received billions in bailout money. Our money. We gave Citi $45 billion, Bank of America $45 billion, JPMorgan $25 billion, AmEx $3.4 billion, Capital One $3.6 billion, and Discover $1.2 billion. In fact, American Express, Capital One, and Discover all converted to bank holding companies to make themselves eligible for bailout funds.

Yet that money seems to have been delivered with no strings attached. Banks cash their bailout checks, then turn around and gouge their most vulnerable customers. Priceless.

Now, I don't know if we can retroactively have congress change the terms of these money bailouts, but I've written my senators and congressmen already to see if this can be done. I'd like to see them say that IF these companies want our money to be delivered to them, that they must either cancel or renegotiate any of these "exclusive" deals that they have with these other companies like Costco, so that companies like Costco (and their customers) aren't held hostage to these companies abuses and problems.

I'd like to:

a) determine if it is still possible for our congress to put these rules on companies like AMEX as a part of their conditions for receiving bailout funds.

and

b) set up an online petition here that would be copied to our congress people when people sign up to ask (no make that DEMAND this condition) be met before any more bailout money is handed out to these banks.

Anyone else on board with me? I think its time that the PEOPLE tell our government how to free us from these bums!

[phantom power]

1. We could all just quit using credit cards. Or use them less.

[DJ13]

3. .....or stop paying on them if they already screwed up your credit

...by reducing your available credit, or changed your payment date to force you into being late.

[napi21]

2. AFAIK this is not only AMEX. All the CC co's are doing this. I haven't

been able to tell what criteria they are using, if any. It hasn't happened to me, but I have received one letter from the co. that providid a cc that I really never used. I had it for over 20 years and kept it because it had a fairly large credit line and I looked at it as a safety net. The letter stated that they were canceling my card due to inactivity. I didn't bother to call them because I really didn't need their card and I simply cut it up. I guess all cc co's are trying to limit their liabilities, AMEX included.

[cascadiance]

10. For me AMEX has been the worst culprit lately...

Even my MBNA Visa (which is properly harnessed with timed monthly payments on a 0% interest transfered balance), isn't messing up if I make no mistakes in paying them monthly at all.

My Commerce Bank VISA has been great from me for MANY years, and still keeps me at 12.9% interest. They are going to be my primary card to use for day to day expenses from this point forward.

Now, I have no doubt (as noted in some of these articles) that other banks also (Citibank, etc.) are also engaged in similar chicanery now. They should ALL have their contracts looked at. I was just speaking for one I know about (the one with Costco, which I shop at frequently and want to keep doing so because Costco itself is a decent company. If there are other similar contracts that are screwing other companies with cards like Citigroup, etc. then they should be made to renegotiate them as well (and that way companies can make their own rules that companies like AMEX need to follow like limiting credit limit changes, or interest rate changes, or have them in breach of contract in the future if such abuses are found to have happened). That way, other companies aren't going to get strangled by these banks too, which they are already being strangled by through other means.

By all means, not just AMEX. If others have knowledge of other similar contracts that other cards have that make it hard to do business with other vendors, by all means put them down here. We should include them in any petition to increase the sense of need for action by our congress critters.

[yy4me]

12. How do you still have MBNA cards? Mine was converted to

Bank of America when they merged. I had MBNA for about a million years and never had cause to complain.

I have had no problem with B of A but do not trust them not to start playing around. The new envelope deal is annoying, next think, they will start charging if you pay by mail.

I wish I could just switch to another company but now that I am unemployed, I cannot ever get another card with just SS income.

I'm stuck. My husband dumped his AX card years ago when he finally realized that giving them $50.00 a year in order to give them even more money was rather counter productive. You had to pay in full every month so what was the point?

[littlebit]

4. My girlfriend worked for AM EX for several years.

We were talking about this last night. She was telling me that this is really nothing new. They have been doing this for years. It is just coming to light now because of the bailout.

[glinda]

5. They should be made to lower interest rates back down as many have raised them.

[zipplewrath]

6. What are the abuses?

They are trying to get a few of their highest risk card holders (folks with large balances and little activity) to pay off their balances and terminate their accounts (since they have little activity anyway). Some, are having their credit limits reduced to near their balances to ensure they don't run up any new debt. Basically these are people who are in over their heads or are in danger of defaulting. I guess I don't see what's wrong with encouraging these people not to get into worse shape.

[Earth_First]

8. You haven't been paying much attention have you? n/t

[cascadiance]

9. Read the links... It is purely an EXCUSE they are using (about "high risk" holders)...

Many people are having these newer practices happening to them, regardless of how they've been using their cards.

In AMEX's book now ALL of their customers are "high risk" card holders, since just about any of us could be screwed with a job loss, home foreclosure, or some huge medical emergency, etc. When they jack up their interest rates too, that is another problem...

This is what has been happening in the home sales market where more and more people are made in to "risky" customers, by MARKET CONDITIONS, not by their own irresponsible behavior.

For me, yes, I had to put a few more thousand on credit cards when I had to make a move recently. My car loan just got paid off, and in normal times I would just pay that down over time. But right now, by companies like AMEX and others that are doing this, they are making it that much harder for people to adapt to their circumstances of layoffs, foreclosures, or even just moving jobs, etc.

These cards are doing it... Because they CAN, without adequate legislation to protect us and regulate their practices... They are doing what previously were described as what "loan sharks" did before...

These bailout funds are the place where we can put new rules on them where the general laws (and existing contracts) are currently keeping them from answering for the abuses they are engaged in. That is why we need to communicate to our congress folks what it is we perceive they can do to keep these companies from getting out of control with us if they want OUR money to help them with their misguided business practices.

[zipplewrath]

11. Not my experience

I just got my third offer for a platinum card. One of the references you pointed to had a comment by a person who tried to get the $300 and was refused because he didn't qualify. They are definitely targeting people. But what they seem to be doing is limiting their ability to increase their debt. Some of the other cards are jacking up the interest, but I wasn't aware that AMEX was doing this to people whom they wanted to terminate their balances. AMEX seems interested in terminating accounts that are in danger of defaulting. The most dangerous thing they could do is offer to allow people to terminate without paying off the balance. That would record itself as a default, not something just anyone would want to do. I'm sure some folks are being targeted erroneously. But predominately I suspect it is people carrying balances who are not using their cards much. Those are the folks who would be hurt the most by being forced to payoff balances. But as far as I could read AMEX was only trying to limit their ability to accumulate new debt. Insulting maybe, but hardly abusive.

[cascadiance]

13. I think the problem is that more and more people are caught in this now...

Just google "AMEX fees credit limits", and you'll see a slew more of articles just like this one. This isn't "business as usual" any more than the banks foreclosing on MORE people was "business as usual" either. Banks have foreclosed on bad debt since we've all probably been born. The problem is, the ways they are taking advantage of borrowers and structuring the rules in their favor is what's creating a massive mess that's affecting more than just the "fringe bad debtors". I would contend that though credit cards have always taken corrective action against bad debtors, that now they are expanding that to a LOT more people now than they used to. Now whether there are a lot more people who are threatened with financial ruin and NOW fit in to the category of bad debt from the current economic slowdown might fit your case, but it is another example of how the economy is spiraling out of control, and how companies like AMEX need to be monitored to take their share of the burden along with everyone else.

I myself don't have a home mortgage, just paid off my car loan, and have less debt than I've had in the past (even though I had a spike on one of my cards to a) handle moving expenses in an interstate move, and b) paid off some emergency plumbing bills that ultimately my landlord paid for where I used to live), I don't have any more problematic debt than I've had in the past, and have kept my accounts up-to-date in terms of what I owe on them. I'm guessing there are many out there like me, who they are using any kind of excuse (one late payment, some big expense of someone's) to go after them with, and make their situations worse. Like many have said, part of your credit score is your credit to debt ratio. Well if they say your credit score is getting to low AFTER they've trimmed your credit limit, then well DUH! THEY were the ones that created that situation, not the customer.

Credit card companies like AMEX are in trouble. Partly due to the effect of the economy on their customers, and partly due to them mismanaging things like bonuses and salaries which should be cut now in their case, especially for the CEOs who DO NOT deserve them in these times, but who get them "because they can"!

[zipplewrath]

14. There is no "business as usual"

You're right, that it isn't appropriate to describe anything going on right now as "business as usual". Especially in the banking industry, they are all trying to start to work to new business models. In the transition, you will see actions like AMEX is taking. I understand your point about AMEX needing to understand its role in the current conditions. I also understand they are in somewhat of a pickle. They behaved irresponsibly and gave credit to a whole lotta folks that they probably should not have extended lines of credit. Now, that those folks need that credit more than ever, they are being encouraged by the federal government to reduce these lines of credit so they can qualify as banks eligible for bailouts. The TARP was badly handled by the previous administration. Some congress critters specifically suggested that connections be made between the funds and lending. These suggestions were ignored and now we are seeing the consequences. The current administration needs to think through issues like you are describing and make sure that their desire to make banks more responsible doesn't result in burdening the most needy first.

[Mugweed]

7. Why do they keep sending me applications?

Also, many of my wife's credit cards with $0 balances were canceled by the holders without notification. It changes her credit rating by changing the credit-to-debt ratio.

I also have recently had my payment due date changed without notice, but caught it in time.