Beware: These stores could harm your credit! (Part II)

American Express is tight-lipped about the following statement I received in a letter notifying me of a credit limit reduction: “Other customers who have used their card at establishments where you recently shopped have a poor repayment history with American Express.”  The implications of such a statement are alarming. 

On Jan. 21, the executive’s office dodged all direct questions I asked.  Some of these questions included: What does the statement mean? What are the “establishments”?  Every question was deliberately dodged during the thirty minutes I spoke with the representative.  Her voice quivered with suspicion and self-incrimination.  After the cordial conversation, I gave up. 

Since American Express won’t tell me which establishments are bad, perhaps you can help me.  Below are all of the businesses I have patronized during the time that I have had the card from Dec. 2006 to Jan. 2009.  Which do you think are the bad “establishments”?

Possible Bad Establishments

Air Jamaica Amazon.com Applebee's (Gastonia, NC) BP (Ashland, VA) BP (Owner Aziz Dhanani) Boston Market (Boston, MA) Brinks Home Security Cactus Car Wash Chateau Elan Winery Cheesecake Factory (Cambridge, MA) Chick-Fil-A Chicago's Nancy Pizza Citgo (Baltimore, MD) Citgo (Greater American Food Atlanta) Dave & Busters D & K Clothing Donor Town Square Ed Voyles Honda ESPN Zone Exxon Mobile Figo Five Guys Fogo De Brazil Geisha House Hershey Park (Hershey, PA)

Island Romance K & G Men's Store Kyles Friendly (Greensboro, NC) Leadership Atlanta LeBlanc Plumbing Mahogany Restaurant (Washington, D.C.) McDonald's Moe's Southwest Grill Opera Paschal's Restaurant Quick Trip Quizno's Red Robin Ruby Tuesday Satellite Radio XM Sirius ServPro Sheetz (Boston, MA) Sonsie Restaurant (Boston, MA) Spirit Airlines Starbucks Swept Away Couples Resorts United States Post Office Walmart Zales

* Establishments are based in the Atlanta, Georgia area unless otherwise indicated. National or international companies are not marked.

Comments

[Marilyn]

I, too, had my credit limit with AMEX reduced from $5000 to $1000 a few months ago. I discovered this while making a purchase that was under the credit limit. I called to find out why the charge was not approved and was told that my credit limit had been lowered.

A couple of months ago I applied for an increase online to $5000, which was denied. An error message said it couldn't be raised to more than $3000. So, I put the request in and it was accepted.

Go figure...

[Janet G]

I had the same thing happen to me recently. I am a college student and it was a visa card, my first card and ive had it for over a year now. I had a $1000 limit and stayed pretty close to that limit but i never missed a payment or made only minimum i paid much more than minimun. Recently i decided to pay off $900 of my card and i got dropped to $500!! Its rediculous! If i didnt know that closing my account would lower my credit score even more i would. From now on its minimal use of that card and im paying it off immediately so they cant make a damn penny offa me! These credit companies are absolutely rediculous! I never got a warning or anything!
How do i fix this? Can anyone help me?

[Diane Keith]

I had been a Platinum Card holder since 1982 and had spent hundreds of thousands on trips, house remodeling and just about everything else. Amex was my card of choice. Can't quite figure out why.......Maybe it was the color or the fact that it cost plenty to own. Did it take on a perceived value? My credit line was unlimited and I paid each month in full.

Then I received THE LETTER. Due to changes on my credit report I was being reduced down to $1700 a month from unlimited. I immediately called customer service to no avail. I then wrote a letter to Mr. Chenault 's office, questioning their sanity and complaining to them that the credit limit they imposed would hardly keep my three cats on Fancy Feast. They must have enjoyed that comment because I received a call soon after from the office of the CEO. They expressed regret but suggested that I look at my credit report.

I then called Amex customer service again and canceled my Platinum Card and exchanged it for a nice free green card. No fees for at least a year and immediately saved $395. Why would Amex want to loose $395 from me and thousands of others? Why, especially since I had never been late since 1982.

Oh, by the way, I redeemed all my reward points. Could there be a trust issue? You betcha........

Posted by: Diane January 6, 2010

[al]

all this happend to me with amex but there not the only that sticks it to you chase cards also i have credit with them had high line of credit they reduces them on all of my cards with them and my apr rate are at 3.99 up to 12.99 now im afraid that they are going to raise my apr rate, and not only one of my chase cards has a apr. rate of 6.99 for the life of my balance my payments were 2 percent of my balance they raise to 5 percent of my balance i called them to change it back they said they would only if i agreed to a 7.99 percent not for the life of the balance but for 2 years and i ask them if i didnt pay it all back in two years what would the rate be they couldnt tell me so i said no and now that they lower my line of credit so it looks like im right at my credit limits and that not good so that they can raise my apr. rate i have good credit i dont know what this will do to my credit i want to close them i can hopefully keep the rate i have to pay them off what do you think thanks kevin

[les]

I truly hope American Express takes the tube. We had their gold card (were offered Platinum), Blue, Business and Business Line of Credit for 30 years and never paid one stinking day late and first had the line of credit cancelled and later Blue reduced and now this month the gold put inactive til they get our payment because they said they notified us it was reduced to $1,000 which we didn't get and our bill is $1034. No telling what they have done to our credit score--for no reason. They truly are a bunch of Morons!!

[Tim Carson]

I, just like everyone else here, an also a victim of "American" Express attacking my FICO scores. No need to go into the details, other than they had absolutely no reason to cut my limits by 88%. It did make my FICOs go from around 777 down to about 702, just because I trusted my AmEx Blue.

What I don't understand is why we all just sit here and let them get away with this.
If we found out some thief hacked into the FICO system and lowered our scores, we would do something about it.

Here "American" Express is doing exactly the same thing and getting away with it.

As everyone knows, lower FICOs = Higher Interest on everything from cars to home loans.

Is the best we can do is to pay them off and keep the card open?
(Closing it would hit your FICOs even more)

Has America truly turned into a country of sheep?

[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!

Places I Shopped:
Publix (double points)
Post Office (double points)
Car wash (sometimes it doesn't work after you pay and AMEX makes disputing easy)
AT&T (double points)
Gas Stations (double points)
Neiman Marcus
Nordstrom
Saks
Walgreens
Lowes
Home Depot
BeachHouse (restaurant)
Lilly Pulitzer

But I always paid these in full. Strange.

[Kathy]

Credit card companies are definitely making judgements about where you shop. Recently my husband tried to use our Chase visa card and the charge was declined. He called Chase to find out why.They told him there was a flag on our card for the simple reason that I had charged a purchase at Wilsons Leather.

[Bob]

I used to have several Amex cards in the 1989-1991 time frame. I was fired for challenging my boss and ultimately ended up filing bancruptcy. Since then I have paid cash for just about everything. In 1997 I had a VA homeloan, that I ended up at the right time and then paid cash for my new car and putting 25% down on a new home. Since the bancruptcy I have worked on the basis of "If you don't have the money, don't buy it."

I have lousey credit scores because I do not have any credit. I cannot even get a simple $700 treadmill. I cannot get an AMEX card on my own even if I wanted to.

Thanks for telling your side of the story - I hope Congress can outlaw this practice or severely curtail it as I use debit cards at most of the locations you mentioned.

[KC]

@ Kevin: or you just don't carry cash.

[KC]

Interesting comments, but I received an email from AMX indicating that my interest will be lowered by 1 percent.

[Richard]

Another weird American Express story. Like the others my card was cancled without warning. My first indication was a card refusal. It was cancled because of an incorrect credit report (mine score is 713) examination on American Express's part. Everything in the letter that I eventually got was wrong. I called to dispute the matter but was told that there was nothing they could do (wrong again). They told me to just apply for another card which I did. It was gladly issued (what the hell sense does that make). I have not activated it. The only reason I have an Amex card is the Delta Airline points. This causes me to fly on Delta so if no points I will not be flying on Delta.

[Carole]

And what about those of us who pay our bills on time, pay more than the minimum, and are STILL getting letters saying our interest rates are going up? Someone needs to do an investigation on HSBC. I have had more problems with them than anyone else. I unfortunately had to use my credit card for medical bills when I became ill suddenly, and then my company's disability insurance company screwed up my claim leaving me with no income for over two months while I filed an appeal. I won the appeal, but those two months were a living hell. I've always paid more than the minimum and never paid late, yet they want to raise my interest rate from 12.99% to 24.99%. I told them to close the account and I will pay off the balance at my present interest rate. They just got a huge chunk of our tax money, and now they want more. Just how much money do these banks want??

Thanks for bringing this to the forefront, Kevin! I hope Oprah has you on to talk about this!

[ASH RED]

I am cancelling my Amex cad. Let us boycott Amex for a while and run them out of business.

[morgan]

I know many people who work in the banking industry, and they say that racial profiling is EXTREMELY common when looking at fraud. They get alerts that say things like "phillipinos are prone to gambling debts" ect, ect. They are forbidden from saying things due to non-disclosure agreements. I would not be surprised if they are looking for shopping patterns that indicate race, and giving or removing credit based on that.

[Ella Hates Frivolous Answers to Important Questions]

All of you who are so shocked because you had perfect credit for 20 years with AMEX or Discover or anyone else, and they cut your credit lines: Wake the hell up, ya bunch of rubes! THEY LIE AS A WAY OF DOING BUSINESS.

They are just using any god-damned excuse at all to reduce their liabilities, folks. Everyone is getting their big credit lines reduced right now. It's got little or nothing to do with you. Given the collective level of moral turpitude these credit card companies have at the leadership level, I wouldn't put it past them to have made the whole story up just to reduce the total number of complaints they have to deal with--if you feel ashamed because you went to a store that makes you "a bad credit risk" you are less likely to mount a vigorous protest against them.

No, just because you use a credit card at McDonald's or Starbucks or Walmart doesn't mean you are poor or a poor credit risk, morons. It's all just a big hoax, and you have just spent the last few minutes trying to rationalize why you were caught in it.

[Johnny]

Are you making an accusation of racism or not? Your list of merchants probably contains a "black" profile--Air Jamaica, K&G.

[Liz Smith]

Zales is definitely one of the places. We've had our Amex card (always paid perfectly on time) for 10 years; the only place on your list that we patroned was Zales, and the credit line was instantly slashed 60%. (It was a sale priced Christmas present for me... Guess that teaches Husband not to buy things on sale...) I shared the story with my 900 Facebook friends, my infinite MySpace pals and Blogspot. Many of my friends have stopped using credit cards altogether out of disgust.

[Chris]

OK, so this is the same AMEX who advertises endlessly. Hey get your card and build up points for a free trip! Or some new fancy company gets a plum card. What? You mean after chasing to jump from a gold to platinum level I have to reach now for not only the elusive Black card but for some other damn color? This is the same company that voluntarily continued to raise my personal credit limit ON THEIR OWN? The same company that charges 100’s of dollars in annual fees for their business cards? The same card that actually ISN’T accepted everywhere. The same card that takes spending tens of thousands of dollars before I can cash in my points for a measly $500 plane ticket? The same company that misleads companies by not distinguishing between a charge card and a credit card…and really not being supportive of small business, because after 3 years as a client there is still no such thing as “OPEN” or “no spending limit” despite running 100’s of THOUSANDS of dollars through them. These cards are supposed to be a tool that we can use personally or for business to keep things moving…for fronting our liquidity before we have cash in hand – to keep the wheels of the economy turning.

So they charge an annual fee, impose huge interest rates and penalties, arbitrarily reduce credit limits without a two-way discussion, are not friendly to small business and are not accepted at every place I need to conduct business, apply for “bank” status to get MORE of our money…what part of this does not sound like the profile of a thief?

Anyone want to go back to hand writing checks at every checkout? Maybe if the banks stopped getting their little percentages from every transaction that their cards produce for them they might change their tactics.

Sorry this has turned into a rant, but this seems like a good forum for all of us to blow off some of this steam…

[TH Williams]

There was a time, years ago, when the credit card companies actually did not mind that some card holders defaulted on their balances. They used that bad debt and fraud loss as a corporate tax write-off. I learned that after I created a new Fraud Desk for my employer, one the largest credit card issuers at the time.

I got really good at studying new account and purchase history reports. I created a set of rules and made them a part of a computer program I used. In weeks I made a major impact on the number of fraudulent new accounts and also reduced the number of bad debt accounts. We created Fraud Desks at every credit processing center. When the corporate accountants found out what I had done they immediately closed down all the Fraud Desks at every office. I was explicitly told that I was messing up an important part of the business tax strategy; bad debt write-off.

How times change, now businesses are worried about Bad Debt again. Funny that the rules and clues to identifying bad debt that I developed have nothing to do with what businesses a person patronizes. To this day those rules and clues sit unused in a manila folder in my home office cabinet.