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.
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 | |||
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* Establishments are based in the Atlanta, Georgia area unless otherwise indicated. National or international companies are not marked.
Greetings! I’m Kevin D. Johnson, a business owner who has recently assumed the role of consumer advocate and internet activist. Atlanta, Georgia is my home.
Upon returning from my wonderful honeymoon in Jamaica in October 2008, I received what I thought was an ordinary American Express bill, but to my surprise it was a disappointing letter informing me that my credit line was reduced by about 65% for a highly suspicious and discriminatory reason. Considering my excellent credit score and pristine payment history, it just didn’t make sense. However, what does make sense are the unfair and insidious policies that I have uncovered when asking why. It is time to change them.
I created this web site to document and share my challenging journey to change what is wrong, unfair, and unjust in the credit card industry. The ultimate goal of this web site is to inform consumers of ways to stand up for themselves against treacherous business practices and to educate consumers about how to improve their credit. Finally, I hope to encourage a more open dialogue with credit card companies about their policies–good and bad.
I am proud to say that this blog's unyielding demand for change led to an important 
How does American Express feel about its own strategic partners (such as Costco) that issue Amex cards? Hypothetically, if Costco customers had a poor payment history, would Amex put Costco on the list?
I'm not sure that American Express can release the list of "bad" merchants. One subtle reason is that an official list might give unfair advantage to its own strategic partners. The more obvious reasons are stated on this site.
On another topic, I use a credit card (not Amex) to make small purchases at McDonalds; I just don't carry cash very often. We try to pay off every card in full every month, so we don't continue to pay for last year's Happy Meal. Of course, credit card companies don't like consumers who pay down their cards either... Credit cards are like the cool popular kids and the rest of us are band geeks. :)
Posted by: MaDa | January 31, 2009 at 10:25 AM
I found this site from the NY Times article.
I have also experienced "interesting" actions by AMEX. Last month, I thought I noticed a small credit limit reduction on my account when I went online to make a payment, but I received no notification from AMEX about it. When I noticed the credit limit reduction again this month, I called them about it and got the same speech from the customer service rep that was Kevin's letter.
The following week, I received a letter from AMEX notifying me that they decided to reduce my credit limit from $22,000 down to $16,000 based on “info from credit bureaus, your history with us and other factors.” Hmm...AMEX apparently decided to send me a letter because I called to question the credit limit reduction on my account.
I admit I have a high balance, but I have excellent credit and I've never missed a payment on anything. I have a feeling my AMEX credit limit will continue to disappear while I continue to make payments. Fine. If that’s the way AMEX wants to play, then I’ll play too.
As soon as I pay off the balance, I’m closing the AMEX card. It may be tough, but I refuse to do business with a company that has such shady business practices and intrusive and absurd data collection policies.
The credit cards companies make a lot of money from us. I’m going to stick it back to them where it hurts—-their bottom line. I’m not using credit cards anymore. I’m using cash or my debit card for all transactions.
Thank you Kevin for speaking up and creating this website. You're obviously working hard to confront the credit card companies for their wrongful actions and policies. We need leaders like you to help expose how much power these companies have over us.
Posted by: kathryn | January 31, 2009 at 08:28 AM
Hmmmm. AMEX may have a point - it appears you
1/ picked up a "geisha" for some "island romance" for a "quick trip"
2/ bought some safeties at sheetz
3/ then drove to swept away couples resort for a private party
4/ in lieu of room service, ordered out some cheesecake
Posted by: Kenneth Chenault | January 31, 2009 at 07:34 AM
Just read about you in the NY Times--thanks for bringing this issue to the light!
I think it may be a combination of factors that reduced your line of credit, only partially influenced by the "establishments" you patronize, but that was the reason that Amex decided to use as an excuse. Probably an analysis of your spending patterns lead them to draw conclusions about your credit worthiness.
I don't pay cash for anything, never carry a balance, and have not seen any reductions in my credit limits.
This reduction in credit lines for people is all a scam to get people to go over limits so they can hit them with those outrageous fees and interest payments.
Posted by: Karen | January 31, 2009 at 07:03 AM
Kevin,
Thanks for sharing your story. It's unbelievable ... but sadly, believable.
I typically pay for all my transactions, including "under $5 fast food" charges on credit cards, so I can better track my budget using Quicken. I used to use my debit card, but the downloads don't show the merchants name, while the credit card downloads do. Guess I have points against me for my efforts at tracking my budget.
When I do use my debit card, I choose "debit" instead of "credit", because stores I like to keep in business (like Trader Joes) pay less of a merchant fee for debit than credit.
Posted by: adriana | January 31, 2009 at 06:55 AM
Hello Kevin-Sorry this happened to you-I looked at your list and I couldn't imagine how any of these charges could indicate your ability to repay-I often use the card for small purchases as I don't prefer to carry cash-Good Luck
Posted by: Clark | January 31, 2009 at 06:52 AM
We are in this mess because people are living beyond their means and it is about time that credit card companies are adjusting limits to more realistic levels
Posted by: joe | January 31, 2009 at 05:42 AM
wow, you eat at some crappy restaurants.
Posted by: dvtn tll | January 31, 2009 at 05:21 AM
Beware: Look at your cash advance limits every statement. There lowering cash advance limit but not the cards limits. Going over this limit could cause all your cards to get a higher interest rate. Thinking you could go on a trip get cash from a card in emergancy suprise you my not be able to get it!
Posted by: Robert | January 31, 2009 at 05:01 AM
Kevin: Come on, isn't it obvious? Red Robin? Ruby Tuesday? Dave and Buster's? Applebee's? Cheesecake Factory? McDonald's Chik-Fil-A? and above all... Paschal's? You're on a one-way trip down the heart disease highway and Amex is afraid you won't be around to pay your bill. Although I have to admit no sentient human being can resist the lure of Paschal's fried chicken. But it's not your credit score they're worried about, it's your cholesterol level. You gotta cut back on the sat. fat, dude!
(OK, gallows humor, but how else to deal with the faceless megamonolith that is Amex?)
Posted by: Joel Snyder | January 31, 2009 at 03:49 AM
Island Romance, Swept Away Couples, etc., could of given AM the wrong impression, if they didn't know it was part of a resort/vacation, so that could be an honest mistake. But WALMART, even being a reputable company, must have a higher default rate than other stores, due to the large array of customers it does have, many on the lower income ladder, thus increasing the odds of not making payments, etc. I also wouldn't discount the "race" issue here, as a possible motive by a credit card company to justify its actions. If they know your spending habits, and everything else about our life, they must know our race also.... Overall though, I still think its general spending habits, how much you owe, available credit (to much available actually lowers your credit score, due to the potential of using it all, etc.). Most people don't know that, and its better to cancel all those cards you are not using.
Posted by: Paul Fineberg | January 31, 2009 at 03:45 AM
I cancelled my Amex card years ago after they switched most of their so-called "customer service" positions to India. Many of my colleagues did the same thing. Besides, I don't see any benefits with the Amex that aren't available with Visa, Master Card or Discover.
Posted by: Mike L. | January 31, 2009 at 02:28 AM
Air Jamaica? K&G? You are black and they figured it out.
Posted by: Johnny Brazil | January 31, 2009 at 01:49 AM
American Express is a dirty, dirty company. I am going to cancel my card and never use them again.
Posted by: John | January 31, 2009 at 01:21 AM
I don't know about American Express's credit policies, but there are a few points that strike me. First, using a credit card for a meal at McDonalds isn't a sign that your flush with cash. There was a study done that analyzed the correlation between personal net worth and the amount of cash a person carries, and the correlation is very high. So if you don't have enough cash in your pocked for a meal at McDonalds, that's probably a good sign that you might be tight. The purchase at Zales is probably also problematic, since it was probably a diamond ring at a high price. This is not generally a very expensive, one-time items which could take a while to pay off, but it also indicates that your household expenses are about to go through through the rough because your on the verge of getting married. I believe that Zales is the culprit.
Posted by: ken | January 31, 2009 at 01:14 AM
Maybe they thought Geisha House (a restaurant, I presume) was a massage parlor!
I was a very loyal Amex Platinum customer for many years overseas before a unsatisfactory resolution involving their customer relations and corporate people wasn't worth the piece of plastic in my wallet. So I no longer am an Amex card-holder and have done just fine with personal and corporate travel without them.
Posted by: S.L. Herman | January 31, 2009 at 12:56 AM
This crap has been going on for years. US Bank ran the same scam on me years ago. Raised my cc interest rate from 8.99% to 22% "because of issues related to my credit report"......Huh? My FICO was 749! lol
Sp I closed the account, cut up the card, kissed USB goodbye and wished them all the best. I will never EVER knowingly engage in business with immoral and unethical enterprises. I'll be adding Amex to my list of businesses to avoid.
Posted by: adc | January 30, 2009 at 09:00 PM
I'm glad American Express is doing this. A few years ago they started handing their card out to just about anyone, including deadbeats who didn't pay their bills as agreed or went bankrupt. In my opinion, those scum should never be extended credit for the rest of their lives.
I enjoy carrying a card that sorts out the riff-raff. American Express always has been #1 and always will be #1. Hopefully with the closing of all of these accounts, it will once again only be in the wallets of the select few with prime credit.
Posted by: EliteCreditCardUser | January 30, 2009 at 08:11 PM
Cathy,
Slashing your limit like that is downright NASTY!
12K to 1K!? They are judging you based on lender statistics?
I use bank pre-paid cards for my dental, medicals, health and fitness programs (business plans) because back in 2007, the credit card companies were analyzing all credit activity according to media reports...
None of my credit card lines have changed. This whole situation sucks mostly because I feel my private purchase activity should be, well, PRIVATE. Hence, I buy inconvenient low balance prepaid cards ($500).
The most wicked thing is that one can't really carry around $5,000 in cash because the largest bill is $100. So instead we have these high line credit cards which record personal behavior minute by minute to be looked at and analyzed and then reviewed by those with enough power to make it happen. These same make decisions like parents to unruly children as to whether our spending habits are the same as yesterday based on statistics that don't even apply to us... ARGG!
In the same moment, our government wants us to spend more on trinkets and stuff? With what? And, why? So we can be reviewed more and have our lines of credit dropped?
Posted by: PrePaid Cards | January 30, 2009 at 07:29 PM
Medical and Dental will get you, possibly taxes. (So why were they promoting paying federal taxes with the card???)
I want to know which mortgage lender doesn't have high foreclosures. They slashed my limit from 12000 to 1000 because 'others with my mortgage lender had higher delinquency rates'. They wont tell me who is an acceptable lender though. (Yes, I asked.)
I closed my card and am giving my routine monthly spending to other companies. I hope they fail.
Posted by: Cathy | January 30, 2009 at 05:46 PM