People everywhere are experiencing the “credit crunch.” Some people have been feeling the effects of the credit crunch for several months while others are just beginning to feel it. Credit card companies have begun to take drastic measures in determining someones credit worthiness.
Have you ever heard the adage “guilt by association?” American Express customers have now been linked into that category. American Express is now limiting cardholders’ freedom according to where they live, shop, etc.
Customers are completely outraged. American Express customers around the country have recently noticed lower limits and tighter restrictions. Some customers are now having to consider closing their businesses. Without the freedom to purchase products for their business, many people might have to close their doors.
American Express has sent letters to people with AmEx cards notifying them of the changes. These letters include several reasons why the changes have been implemented. Among these reasons are, “Our credit experience with customers who have made purchases at establishments where you have recently used your card.” Another reason has been, “Our analysis of the credit risk associated with customers who have residential loans from the creditor indicated in your credit report.”
This is the first time that such limits have been implemented, although rumors of such limitations have been around for quite some time. American Express is completely defending their position on the issue. AmEx has decided to monitor credit risks. This includes monitoring credit profiles, income, credit reports from all three credit bureaus, payment history, etc. However, the major credit card company is also considering factors that have recently arisen from the struggling economy.
It does seem surprising that a major credit card company is taking such drastic measures to monitor credit risks. The lack of credit risk monitoring is a major contributor to the current crisis facing our economy. However, restricting someones account because they shop at a particular store or have a loan with a particular lender seems a bit unethical.
A troubling economy has led to drastic measures being taken by everyone. What will this lead to next? This is certainly a major issue for a country that lives primarily on credit. Our country is being forced to learn how to live without credit, or at least as much credit.
This is so true- I just got off the phone with Amex- they now have a new department called Credit Operations – they are the ones that get to handle all the frustrated callers whose credit limits have been changed.
I am in a tricky situation as out of frustration on the lack of information of reducing my credit limits, I had asked Amex to cancel the cards- however once I realized that the rebate cheques that were due to me – will no longer be available – I asked the cards to be reinstated (I had a good sum in rebates) – surprise- they cant do this.
So I am in a double whammy- Amex set the credit limits – they reduced it – affecting my credit scores – NO FAULT OF MINE – as I pay all my cards in full…
I am not sure where to go & what to do now – I will end up loosing over 300$ – may be amex bottom line will shore up by such trickles….
this is what is called DAY LIGHT ROBBERY.