american express lowers my credit line?

[look 171]

Got a email from them saying that my credit card limit has been lower due to what reason I will never know. It is my business card. What the deal? Anyone experience this, is it credit bs that bad out there that they have to lower limits. My credit is great, really great. We are never really late with payment and only a few times in my whole life. I owe a few hundred on all of my cards combined. do I really have to owe a whole lot of money to drive up my limit? I really don't need to have high limits to run my business, but I am just pissed.

[Porsche-O-Phile]

I thought the whole reason to have AmEx was because there is no credit limit?

Credit markets are crashing and will continue to for a while. It's becoming "use it or lose it". As things go downhill economically, people depending on their lines of credit to keep solvent are going to get shelled. It's simply a case of the credit lenders trying to cut their losses preemptively. It's a not-so-subtle way of them saying "we think things are going to get REALLY schitty and we don't want to be the ones left holding the empty bag when everyone starts borrowing off their credit lines to stay afloat, then defaults".

They don't trust you. But I wouldn't take it personally - likely they don't really trust ANYONE right now...

[Cdnone1]

I had a similar experience.
I own a Company in Canada and we use the Amex card for all our business. The Company regularly puts 25K-50-K a month on the card.
Last month we had $40,000.00 on the card and missed the payment by five days. Amex called me the first day it was over due at my home in LA as the card is guaranteed by me personally. They told me the card ha been frozen already and when could they expect payment?
Now i understand that we where over due but this was the first day and we have had far larger amounts over due by a few days with out any action by Amex.
Our Bank in Toronto had put a hold on a large check (or cheque in Canada) for a few days and I explained this to Amex and we paid $25,000 towards the bill the first day it was over due as good faith.
Amex called me everyday and twice on the fifth day even though it had been paid but had not hit their account yet.
I think they are really worried because for the first time in their history they are having a problem with high profile and high end consumers defaulting.
It makes sense from their business point of view.
Also their stock is down from mid 60's to mid 20's

Steve

[Rich76_911s]

American Express announced weeks ago that they were going to cut credit limits on half of all their customers.

Amex, as I understand it, is the only credit card company that does not repackage the debt and sell it off. Visa, Mastercard, etc repackage it and sell it off. Just like the Banks who packaged Mortgages together and sold them off. So Amex has a higher risk in its portfolio and is looking to decrease their exposure.

[RRico]

Amex did this to my business account also in the past week.
So it looks like its an across the board policy change.

[campbellcj]

This is sad to hear. We spend around $20K / month on Amex between business and personal and have always gotten very good service from them. You'd think they would not cut limits on those with a clean, longstanding record of paying promptly. If they do it to us we will have to immediately take our accounts elsewhere.

[aigel]

Banks curretly also close or reduce home equity line of credits. Even borrowing against a 401k isn't going to bring the funds it used to!

This is a very bad spiral. Businesses will suffer, putting more people out of work. The people out of a job can't borrow from credit cards or HELOC. They likely will have trouble paying their mortgage, even if their house isn't under water. This will further send house prices down ... you get the picture ...

George

[look 171]

I think I shouldn't be upset now that its happening to some of you as well. For a moment there, I was thinking about going back to visa or something. Changing card is such a PITA.

[Porsche-O-Phile]

It's a vote of "no confidence" in the economy the way I see it.

[techweenie]

15 months ago, B of A cut the 'headroom' on all my credit cards by a total of over $30K. Probably cost me 80 points on my FICO (which, fortunately, I could spare). I think by being ahead of the curve, B of A was smart, even though they pissed me off... a lot.

My business line of credit is with Wells, and is unchanged, so far.

[JeremyD]

I hate AMEX - I had a run in with them 20 years ago and it still pisses me off. I only have 2-3 companies I have said that I will never do business with as long as I am alive - AMEX is one of them.

[legion]

Funny, my personal credit cards have all been bumped significantly in recent months.

[onewhippedpuppy]

Originally Posted by aigel

Banks curretly also close or reduce home equity line of credits. Even borrowing against a 401k isn't going to bring the funds it used to!

This is a very bad spiral. Businesses will suffer, putting more people out of work. The people out of a job can't borrow from credit cards or HELOC. They likely will have trouble paying their mortgage, even if their house isn't under water. This will further send house prices down ... you get the picture ...

George

Remember when people actually paid for things? Like, with money? Lenders being more conservative is not a bad thing, it's the slap in the face that many Americans need. Returning to conservative (i.e. smart) lending practices is better for everyone, except those that are mortgaged to within an inch of their lives. Our addiction to debt has to stop, but no matter how you cut it things will be ugly for a while.

[RKC]

Our company card limit was (and remains) $200,000 per month. We had no limit until one month we put $350,000 on it in 2005, and we got a lot of calls and had to send them our annual reports.

They just called out of the blue last August to request more financial info. Maybe it is related to their troubles. Good thing most of our reserves are in CD's, I guess....

[pwd72s]

Originally Posted by legion

Funny, my personal credit cards have all been bumped significantly in recent months.

Mine too...I believe they keep hoping that we "deadbeats"...those who pay in full every month...will fall into the trap of paying their crazy interest rates.

[aigel]

Originally Posted by onewhippedpuppy

Remember when people actually paid for things? Like, with money? Lenders being more conservative is not a bad thing, it's the slap in the face that many Americans need. Returning to conservative (i.e. smart) lending practices is better for everyone, except those that are mortgaged to within an inch of their lives. Our addiction to debt has to stop, but no matter how you cut it things will be ugly for a while.

I didn't say that lending practices were good. But this thread is about good customers getting their credit lines chopped. This is because there is no credit available - even for low risk customers!

You may underestimate the possible magnitude of the "ugly for a while". The financial system is going down very fast and US credit cards are another 500 billion dollar bail out around the corner. This will seriously affect every one of us, including the many people that have zero credit card debt. How long can governments around the world keep pumping money into the system? And where is that government money coming from?

George

[onewhippedpuppy]

Originally Posted by aigel

You may underestimate the possible magnitude of the "ugly for a while". The financial system is going down very fast and US credit cards are another 500 billion dollar bail out around the corner. This will seriously affect every one of us, including the many people that have zero credit card debt. How long can governments around the world keep pumping money into the system? And where is that government money coming from?

George

You're preaching to the choir my friend. That's the real tragedy here, those who were responsible will ultimately foot the bill, and we will all suffer together.

[epbrown]

Originally Posted by onewhippedpuppy

Remember when people actually paid for things? Like, with money?

Remember when everyone wore oilskin breeches and carried gold coins?

I dont rack up numbers like the OP but I do use my AMEX for everything - it's convenient to not have to carry lots of cash and I just clear the balance every month - no interest, no hassle. Credit is like any other tool, you can use it properly or abuse it.

The sucky part is government involvement. If my neighbor loses all his tools being careless, that's tough. When he steals my tools to replace them, that's theft. But if the government takes my tools to replace his - that's "policy."

[Vintage Racer]

Citigroup mailed me a notice that they were lowering my credit limit. I could care less. I have never charged anywhere close to the limit and have never failed to pay the balance every month.

And I am having a much better year that Citigroup is experiencing.

http://finance.yahoo.com/q/bc?s=C&t=1y

American Express isn't exactly increasing shareholder value.

http://finance.yahoo.com/q/bc?s=AXP&t=1y

[MFAFF]

Originally Posted by aigel

I didn't say that lending practices were good. But this thread is about good customers getting their credit lines chopped. This is because there is no credit available - even for low risk customers!

George

But for a CC company you are not a 'good customer'.. you are a very poor one. You use their services responsibly (no going over the limit and having extraordinary charges levied)...you always pay it off in full (so no interest)..in short you are probably 'costing them' money or not making then enough profit.

The ideal CC customer (private that is) is a person who regularly 'adds' 50% of their credit limit per month to the total whilst keeping an outstanding debt of between 30-40% of their limit on the card.. enough interest to make good money off them but just covering the credit long term...

The 'good side' however it that being a 'poor customer'...results in two different responses... one CC company threatens to cancel my account becasue I do not use it enough (true it is a 'spare' card should I lose one..so spending on it £0 usually and has been for a few years) the other looks after my 'interest' (well theirs actually) by calling me if there are transactions on my card that our out of the ordinary, recently it has 'saved' be something like $5000 bucks as somebody 'stole' a postal delivery on its way to me...and used the details so gained fraudulently. They called, asked me I had done such and such (spending money in a Ford garage.. arrrgggghhh the insult) and refunded me the money...it was a bit tough to argue when I had spent a few ££££ in a Porsche shop the same day a couple of hundred miles away...

But nonetheless the credit limit does go up and down almost without logic.. the fact its something like 10X my monthly spend means it does not bother me but it does happen..