Mike 03
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Mon Nov-24-08 04:18 PM
Original message |
Credit Card Insanity, American Express and my Mother |
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Edited on Mon Nov-24-08 04:20 PM by Mike 03
Okay, this is getting ridiculous.
My parents have an American Express card. They probably have the highest FICA score possible. They pay all of their bills, in full, every single month.
Today my mother received a letter telling her that her limit had been reduced. I was so aghast that I failed to ask her by how much. But I know her limit was $10,000. That is not all that high. My Chase limit is $20,000 and I'm not special, just responsible.
I can understand someone who misses payments having a card cancelled or a limit reduced.
In this crazy environment, I can even understand someone who makes the minimum balance payment only, even if he/she makes it on time every month having a card cancelled or a limit reduced.
But why would they cut the limit on someone who has only a moderately high limit and is a perfectly safe credit risk? To reiterate, she pays her entire balance every single month and has never had a late payment in her almost 70-year life!
God damn, this whole bail out process is really beginning to make me furious. I am ashamed I was ever for it or had some confidence in Paulsen and Bernanke.
This is complete horseshit. I'm fed up, and too angry to type.
ON EDIT: Just in case anyone missed it, American Express was granted the rights and obligations of a bank about two weeks ago so it could go to the Fed trough and borrow from the TARP.
God damn, sorry, I'm so pissed I can hardly see straight.
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Cronus Protagonist
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Mon Nov-24-08 04:19 PM
Response to Original message |
1. It's the Mormon backlash! |
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They're lowering the limits of liberal parents!! OMG!!
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EFerrari
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Mon Nov-24-08 04:20 PM
Response to Original message |
2. They did that to my mom, too. First reduced her limit |
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and then, pulled her card. They said she had too much debt although that has remained pretty constant for the last 15 years. She was very upset.
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Warpy
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Mon Nov-24-08 04:24 PM
Response to Original message |
3. They're limiting future liability |
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which is a prudent thing to do. How likely is your mother to run up $20,000 in credit card debt? My guess is that her monthly balance is well under $5000 even in extraordinary circumstances.
She wasn't singled out. The companies are lowering limits across the board.
If she wants her limit raised, I feel sure that with her payment history, she will be allowed to do so.
A lot of people who pay the minimum are going to find out their limit has been lowered to the point they're going to have to consider paying it down in order to have any credit card wiggle room, at all.
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Pithy
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Mon Nov-24-08 04:24 PM
Response to Original message |
4. AMEX is really struggling right now |
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AMEX is cutting many, many people's credit limits right now. They have a very funky risk management algorithm that no one on the outside can quite figure out, but basically they're looking at everyone's spending habits, where they shop, what they buy, who they have their mortgage with, and what part of the country they live in.
For example, if your mom lives in Cali in an area where foreclosures are rampant and she has her mortgage with Countrywide, she will flag higher for risk than someone who lives in Kansas and has their mortgage with Chase.
They also are looking at how much each person's average daily balance is. If a person is only using a third of their current credit limit on average, AMEX is cutting many of those CLs to what they've actually used in the past to reduce their risk even further.
AMEX just sought and got approval to be considered an actual bank, which will help them get government bailout money. Their stock has tanked in the last month and they are really hurting. Tell your mom it's not personal - it's happening to many, many people on many different cards, and it's usually not based on FICO scores at all.
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Sequoia
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Mon Nov-24-08 04:24 PM
Response to Original message |
5. Someone I work with said that happened to his mother too. Maybe |
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credit card companies hate mothers.
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ColbertWatcher
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Mon Nov-24-08 04:29 PM
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6. I'm not even going to pretend to understand the motivation for credit card companies. n/t |
Horse with no Name
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Mon Nov-24-08 04:29 PM
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7. It's not about HER creditworthiness |
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It's about theirs.
It will be important to remember this in the coming months when even the best credit is being denied.
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TygrBright
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Mon Nov-24-08 04:38 PM
Response to Original message |
8. Then WHY do these ****heads keep trying to push one of their damn' cards on ME? |
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Last week I got TWO shills for Amex.
Yeesh, I've NEVER had an Amex card. I recently closed a VISA account since I hadn't used it for years. We're down to two credit cards, one we never use and one we use once a month and pay off in full every month.
Why do these idiots waste their time with me?
We're not rich, our credit rating isn't bad but isn't perfect, we have a mortgage and just enough income to pay regular expenses and keep a little for when the water heater goes out or something.
And they're STILL trying to push credit we don't want on us.
Nuts. They're nuts.
Nuts, I tellya!
exasperatedly, Bright
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HamdenRice
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Mon Nov-24-08 04:40 PM
Response to Original message |
9. They're afraid to admit they have no money to lend you |
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so they just raise fees or cut off credit.
But the credit card system relies on them selling bonds that are a lot like the mortgage backed securities that caused the housing market crisis, but they're called "credit card receivable backed securities."
The banks haven't been able to sell them for months, so they can't replenish the supply of money that enables you to make credit card purchases.
They won't come out and say it because they're afraid there would be a run on the company.
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Speck Tater
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Mon Nov-24-08 05:20 PM
Response to Original message |
10. Some weeks ago I read that AMEX was going to cut EVERYONE's limits. |
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I can't find the article now, but I recall they gave some reason having to do with keeping their possible liabilities under control in uncertain times.
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man4allcats
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Mon Nov-24-08 05:24 PM
Response to Original message |
11. I did business once with American Express many years ago. |
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They canceled the card even though I paid on time every time. I called to ask why, and a very rude person at their end of the phone said it was because I was an irresponsible deadbeat. They have actually had the nerve to solicit my business again. They will never get it.
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skeewee08
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Mon Nov-24-08 05:27 PM
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12. Certain Zip Codes are being targeted by |
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Financial Institutions. They are concerned with the high foreclosure rate so even if you have a 800 FICA never been late in your credit life, if you live in a high foreclosure area your limits will be lowered or account closed because of the risk.
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Thu Apr 25th 2024, 08:13 AM
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