American Express says it has changed its discriminatory policy, but don't be fooled

The New York Times just released an article that I believe will resonate more than any other concerning the discriminatory actions of American Express.  The article says that American Express has decided to change its policy, but the disconcerted company refuses to go into detail about the changes and what specifically it meant by “Other customers who have used their card at establishments where you recently shopped have a poor repayment history with American Express.”

I commend American Express for finally addressing the situation and publicly pledging to make immediate changes. However, this type of elusive discrimination calls for a full investigation of their behavioral analytics. There must be a strong and clear legal deterrent not only for American Express, but also for all companies that engage in such insidious practices.  

Read the article for yourself.  Let me know your thoughts.  I’ll have more on this later.  Something tells me that some major retailers or government officials called American Express within the last two days.

Comments

[J.S.Smith]

AMEX lowered my credit limit November 2007, maybe one of the one's in the first wave of reductions.

I had a limit of $12k then they took it down to $10k. At the same time they removed my no-preset limit on my other AMEX and put a limit of $1k on it. I never paid late, and paid in full. I called and was told there was nothing they could do, that my spending behavior raised red flags to them. The rep on the phone was nice as could be and even seemed baffled by it, especially when she reviewed my history with them. She attempted to get a manager on the phone to reverse the decision but after she put me on hold for a bit she got back on and said he refused to speak to me and that his suggestion was to close both of my accounts. It was a week later I received the emfamous letter of my spending habits and establishments.
I was furious, but I didn't close my accounts, still have both 1.5 years later. I didn't want to give them any satisfaction. But I did change some automatic charges to my bank account and stopped using them altogether. I didn't want them making money off of me, but I did like the rewards program. It is the best of any card company.
Though, I just realized I fell into their trap. After time I kind of forgave them and started using them again recently, rewards are addictive. I think I will stop again now.
I feel sorry for AMEX that they are in such financial trouble that they have to take such extreme measures. I don't feel sorry for them in the way they are going about it...you don't bite the hand that feeds you. If I don't pay late and pay off frequently then leave me be and let me earn money for you!

[Tania Fischer]

As a long time customer of American Express let me share my frustration and disappointment in the way this company has been treating me in recent months.
Let me give you a little history as to what type of customer I have been and why it is that I am feeling taken advantage of. In recent years I have held 2 different accounts with you a Cash Rebate card as well as a One card. Back in November of 2008 we had a family emergency and I was going to be using my Cash Rebate card in New York to pay for funeral expenses. I had a $0 balance on the account (with the intentions of not to use this card unless there was an emergency) since this card hadn’t been use for quite some time I decided to call customer service department to inform them of this and tell them that I would be using up the entire $2,000 available on it. They agreed to let it go through and that I would have no problems, well that did not happen. I had to call back another 2 timesand finally I was informed on the last call that it would not go through because my credit line had been dropped to $500 and that there was nothing thhey could do for me. We are talking about a FUNERAL. I have since canceled this account as I feel I cannot count on American Express so why should you have me as a customer.
In February of this year I received a letter from this company informing me that my credit line on the One card was being dropped due to a high balance, to many requests for credit and having to many accounts open at the same time (I only have 3 credit cards left pay them all on time and in full). I have since checked my credit report and can tell you that the above statements are not true. I have not requested any type of credit in over a year have brought down the balances on all my accounts, especially yours. I feel that due to the fact that I paid a large sum to my One card your company realized it was a good moment to cut me off, as you have probably done with many customers in recent times.
In summary I feel that I am being mistreated in light of the countries economic crisis and that I am not being analyzed on an individual basis but am paying the piper for all the other customers that are struggling just as everyone else is. I am writing this because I can no longer trust American Express with my credit needs.
My husband and I have been customers of American Express and American Express Financial advisers (now Ameriprise Financial) BIG SCAM!! and in every instance have always been handed the short end of the stick. We have lost thousands of dollars with all your companies and have struggled due to your unfair practices and mishandlings.
As soon as I possibly can I will pay off my insignificant debt to you and will find other institutions to handle my credit and financial needs. Remember that your are not the only players in this game and that other institutions would be happy to have me as a customer.

[Steve Futrell]

Ok we just gave American Express over 3 Billion Dollars of our tax payer money and they just cut off my credit card (which had a 0.00 balance) for what they say is a bad credit report...I just pulled my credit report which showed no late payments everything paid off and no history changes in the last year...Someone needs to check into American Express. Something very fishy is going on over there. We should be treating them the way they are treating there loyal customers and get our 3 Billion back...Send a complaint to your Senator and Congressman and the News like I did...Also has anyone noticed that the CEO is Kenneth Chenault and there is a post on here from Kenneth Chenault...Posted by: Kenneth Chenault | January 31, 2009 at 07:40 AM

hmmmm......

[Linda]

FYI...if you call AMEX, make sure you do so from a land line. Also, ensure that they do not have your mobile/cell number. The latest revision to their Service Agreement states that YOU authorize them to make phone calls and/or send text messages, including, but not limited to account transactions or servicing, as well as OFFERS OF AMEX PRODUCTS AND SERVICES. You also agree to PAY ANY FEES or CHARGES YOU INCUR FOR THESE INCOMING CALLS OR TEXT MESSAGES from AMEX without reimbursement.

[Shirley]

AMEX is getting to me too. They used to be the "elite", but they are now mistreating their customers and I am "also" looking into transferring this balance over. I no longer recommend this card/rave about them like I used to.

[Kenneth Chenault]

Drat! Caught lying again! We need to fire our incompetent PR outfit.

[An AMEX Victim]

I had a legal argument with AMEX over my Platinum card not over payment. AMEX platinum charges more than $300 annual membership fees,in my opinion, for nothing. Without notifying me they cancelled my card causing me a major embarrassment when my charges were declined and I couldn't understand why. Then they cancelled my AMEX Costco card although I had no dispute with them over that card, and doubled (!) the interest rate, making the neighborhood loan shark's interest rate appear reasonable...I Wrote the chairman whom I met once socially. I received a boiler plate answer. I can no longer trust their business judgment and moved more than $11 millions in deposits held by their subsidiary, which were under my control. More to move soon. I also advised my clients to think twice before doing any sort of business with AMEX. The sad thing is that these thuggish business practices didn't help much because they begged for more than $2 billion in government aid.

[Linda H]

Thank you for a wonderful smart well designed place to talk about credit cards. I've been paying ours off every month for over twenty years and only keep one card. It makes me supremely happy to not have paid an extra dime to these people. I get the card for "free" at this time. I have been suspecting that they will soon start charging me because I don't pay interest to them although of course they get plenty of money from the merchants. Anytime a small business asks me to please pay cash I do. Greed has made the banks crazy.I'm pretty much prepared at my age to simply have no card at all if they don't start playing fair. When I was young and poor I did it and now that I am well off it would be fun to try it. FYI, when I first got a credit card my interest was 12% back in the early eighties.My elderly mother had a card that tried to charge her 88% just last year for a small debt. I paid it for her of course and made her cancel the crazy thing. Thanks again.

[Linda H]

Thank you for a wonderful smart well designed place to talk about credit cards. I've been paying ours off every month for over twenty years and only keep one card. It makes me supremely happy to not have paid an extra dime to these people. I get the card for "free" at this time. I have been suspecting that they will soon start charging me because I don't pay interest to them although of course they get plenty of money from the merchants. Anytime a small business asks me to please pay cash I do. Greed has made the banks crazy.I'm pretty much prepared at my age to simply have no card at all if they don't start playing fair. When I was young and poor I did it and now that I am well off it would be fun to try it. FYI, when I first got a credit card my interest was 12% back in the early eighties.My elderly mother had a card that tried to charge her 88% just last year for a small debt. I paid it for her of course and made her cancel the crazy thing. Thanks again.

[Linda H]

Thank you for a wonderful smart well designed place to talk about credit cards. I've been paying ours off every month for over twenty years and only keep one card. It makes me supremely happy to not have paid an extra dime to these people. I get the card for "free" at this time. I have been suspecting that they will soon start charging me because I don't pay interest to them although of course they get plenty of money from the merchants. Anytime a small business asks me to please pay cash I do. Greed has made the banks crazy.I'm pretty much prepared at my age to simply have no card at all if they don't start playing fair. When I was young and poor I did it and now that I am well off it would be fun to try it. FYI, when I first got a credit card my interest was 12% back in the early eighties.My elderly mother had a card that tried to charge her 88% just last year for a small debt. I paid it for her of course and made her cancel the crazy thing. Thanks again.

[Troy Davis]

I also have an American Express horror story I'd like to share.

In Nov 08 I received a letter stating the revolving credit feature of my Platinum card had been suspended due to a high balance and low payments. I immediately objected based on the facts that I had only charged what American Express had approved and I had made all the minimum payments on time. I was told I would need to pay down the balance on this account for the revolving credit feature to be considered for reinstatement.

In Dec 08 I paid off this account in full by transferring the balance to a Bank of America card that offered 0% interest. When I contacted American Express in Jan 09 to confirm the full payment had been received, I was told the annual fee of $450 would be waived as a courtesy for my inconvenience. I should have known better.

When I contacted American Express again in Jan 09 I was told the revolving credit feature on my account would not be reinstated due to the high balance on my Bank of America account, and that there was no record of the offer to have the annual fee waived.

American Express seems to be in a state of panic due to recent dramatic drops in quarterly profits. They seem to be willing to try anything to save their business. Unfortunately, this comes at the expense of their customers. I for one will not tolerate this type of disrespectful treatment and have canceled all of my American Express accounts.

[KateM]

As a student, I am a low income, high debt borrower. Obviously it is not the best of times to have a ratio like that, however, when first starting out at college, American Express offered me a credit card and I gladly accepted. Four years later, with a perfect Payment History, they gladly took it back and canceled my account. With more than four years of student loans against my name and low income coming in, my perfect payment history meant nothing to AMEX.

As a former AMEX customer, its frustrating that perfect payment history means nothing because they canceled my card.

[Barbara]

Kevin,

thanks for this article. I thought something was foul when last year I was relocating to a new state, living in a hotel for 5 days a week for a month in addition owning a home--I was late paying the Amex bill because I was waiting for a sign on bonus. I was trying to pay my hotel bill and 100 dollars shy of paying the whole thing the hotel cashier said the charge wouldnt go through. I thought that was strange and paid the rest in cash. I returned home one weekend to find a letter saying my cards with Amex had been cancelled. A Gold card and an optima. I don't know what they thought--but I still think it's strange especially since by the end of the same month my bill was paid. All my bills were paid. I haven't protested really...I probably should. Perhaps it was because my new job is with a direct competitor so I let bygones be. But I agree with the readers --we should be able to stop them from damaging our credit scores. that's really not fair.

Barbara

[Charles]

Why not join a Credit Union as you will get treated fair and also get more respect for them then you will from any bank or Credit Card company.

[Brian Pellin]

The reason banks are reducing the credit limits is that before this recession, they would package the amounts receivable from their customers into Debt Obligations, and sell them on the secondary market for high returns. They did the same with Residential Mortgage Backed Securities, Subprime Loans, Auto Loans, CDO's, CMBS's, etc.

Now that people can't pay their bills because of job layoffs, there is no market for these Debt Obligations, so banks have less money to offer their cardholders. Everyone shares the blame in this.

[Brian]

Doug- thank you for your input. I wholeheartedly agree: Pay cash.

[Doug Stewart]

Every body knows that the best way to beat the banks is to not borrow money. If you make $600/week, spend $599 or less. Pay cash. If you want to buy a new car, save for it first. If you don't have a lot of money, buy a used car. If you want to take a vacation, save first, travel later. Do this and everything will be alright, I promise.

[Virginia Davis]

Dear Sir/Madam

Like many Americans that find the economy squeezing our pocket books, I am even more overwhelmed when my credit card companies arbitrarily raise interest rates to painfully high amounts on existing balances. Recently I was raised to an interest rate of 23.85% on my Washington Mutual credit card, which has now been taken over by Chase. This occurred during a time when my credit score was rising into the higher range of “average”. I have never missed or been late on a payment, and I always pay more than the minimum payment due.
When I spoke to two supervisors in the credit card department of Washington Mutual/Chase, I was told that they “are unable to negotiate interest rates.” They said that they monitor their client’s accounts constantly and “IF” an offer for a lower interest rate comes up, I will be contacted. This is a joke. I have never received an offer for a reduction in interest rate on an existing balance. Usually the only offers for lower interest rates come from competing credit card companies trying to lure me away from other companies. They offer misleading rates which jump tremendously when the honeymoon is over
After reading online comments at numerous sites, I find myself almost feeling lucky to be asked to pay “only” 23.85% on this Washington Mutual Credit Card, because for some are going even higher. This interest rate is more than 10% above any other card I hold. I fully expect to hear from other companies that just haven’t yet gotten around to raising the interest on my other cards. They want to get their shot in before new rules take effect in 2010. It’s like telling a criminal that he’s going to have to stop stealing in 18 month, so he better get to it.
I was told by one supervisor that I had received a notice that this raise would occur if I didn’t “opt out” by a date that has now passed. We check our mail carefully and if we received such a notice it must have been very well hidden in the fine print.
These practices by banking companies have to be regulated and controlled before 2010. I am hopeful that The Credit Cardholder’s Bill of Rights: Balanced Reform, will pass and take effect quickly.
Please do all that you can to help those of us that find ourselves at our wit’s end in this very tough economy. The very companies our tax dollars have been given to without restriction are now gouging us for every cent they can. Only Congress has the power to stop them.

Thank you,

Virginia D. Davis

[Annoyed future former AMEX customer]

Thank you for taking the time to post this information. I too received a similar notice, except it was related to people who had the same mortgage company. My limit was lowered to an amount very close to what the balance was (a 35% reduction), which caused me to be over my limit by the end of the month. Needless to say, I am taking steps to cancel my card, as I have many others to choose from.

[June Bug]

Just read about your site in the NY Times; thanks for your efforts. AmEx changed their terms of service on me in November. My green card statements used to have a "New Balance," and expect me to pay the entire amount. Now the bills have "Minimum amount due"; they allow me to pay the bill partially, so they can collect more fees. I didn't fall for it, and still pay the entire balance.