It's Official...Your Credit Lines Are In Jeopardy

I went to the grocery store the other day and used my AMEX card as usual and it was declined. I download all of my credit card transactions into my Quicken account every day and I knew I had several thousand dollars of available credit on that card. Thinking it was a fluke I used a different card. Last night (yes I go to the grocery store pretty much every day!) it happened again.

Just now I called AMEX to see what the problem was and found that they had reduced my credit line down to what I had outstanding. Poof, thousands of credit line dollars, gone. Being my argumentative self I contested it with the young man who claimed it was because of a negative credit report from Experian. Well, I also subscribe to a service that alerts me to any changes in my credit reports and/or FICO score on a daily basis. And nothing has changed.

He transferred me another person in another department that again tried telling me it was because of my credit report. I have had this card since 2003, never been late with a payment, actually in over 30 years my credit report shows I have never been late with any payments. So of course I pointed that out and asked exactly what in my credit report were they referring to. He just kept repeating the same memorized line over again so I told him I wanted to speak to his supervisor.

A woman got on the phone and repeated the same information. But when I pressed her she said that it had nothing to do with my personal credit report that AMEX and other financial institutions were reducing credit lines based on the current negative economic environment and it had nothing to do with my personal credit. They would not budge.

My husband Googled AMEX and found this article from June in the NY Times:
http://www.nytimes.com/2008/06/21/business/21credit.html?_r=1&oref=slogin which talks about AMEX and other credit cards reducing lines of credit across the board. And it doesn't matter what your credit score is or how much you make, if you carry high balances or own a lot of property and therefore have several mortgages on your credit report you're going to see your credit lines reduced. If it hasn't happend to you yet, be aware that it probably will.

Now you'd think that with the current economic conditions requiring banks to tighten their belts that they'd be encouraging credit worthy people to carry balances so they can collect interest. I mean, they've got to do everything they can in these tough economic conditions to tighten their belts and cut costs to keep AMEX financially sound, right? Especially since the chairman and chief executive of American Express, Kenneth I. Chenault, received compensation valued at $53.2 million in 2007, nearly double the $27.3 million he received in 2006. http://www.nytimes.com/2008/02/26/business/26amex.html

Oh? Wasn't it the mismanagement of these same financial institutions that created this current economic mess? But it must be tougher now to manage them, so the top management really need to take more money from their struggling companies in order to compensate them for the terrible job they did in the first place!

1 comment:

Anonymous said...

I also have an AmEx. I use it over Visa b/c of the rewards. If they lower my limit, I'll simply close the account. Glad you are getting this information out there though!