AMEX CLI experience

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Cre
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Postby Cre » Fri Nov 07, 2014 4:45 pm

Nixon wrote:If your starting limit is $24,000, I'd get ready to submit a 4506-T for an Increase.


Is it common for credit card issuers to request an income tax return sent directly by the IRS to the card issuer?

I just remembered that my other longtime held credit card has a limit of 33K, and I never had to fill out a 4506-T. ???

AmEx asked me surprisingly few questions, and I hadn't personally applied for a credit card in over a couple of decades, so I didn't know what to expect. I will say that I have never missed a payment, and never have been late on a payment, ever, not even once, in my entire life. I've done without some things that I wanted when I was younger, but I've never bit off more than I can easily chew. However, I'm not convinced that means anything to the credit bureaus though, according to what I read.
Current Cards:
AmEx Platinum Charge: NPSL, $450 AF
AmEx Reserve Credit: $30K limit, $450 AF
Chase Slate Visa Credit: $32K limit, No AF
Future Strategy:
Near Term: Need a good MasterCard for places that won't accept AmEx or Visa
Long Term: Will downsize out of one or both current AmEx cards to reduce AFs


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Vattené
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Postby Vattené » Fri Nov 07, 2014 7:08 pm

Cre wrote:Is it possible to make these requests in writing, so that there is a correspondence trail, where the respondent on the AmEx side is on record, where proof can remain extant of lack of follow through?

I would assume there is a place you can send correspondence to via snail mail, but I don't know it off the top of my head. You could send a secure message (another abbreviation {not sure if it is on the list} = SM) on the website to leave a written trail. I have also recorded conversations on the phone. I requested a credit limit increase on my Walmart card online yesterday, but first I called a CSR on the phone to make sure I wouldn't take a hard inquiry on my credit report. I recorded that on my iPod just in case one shows up, then I will have hard evidence if I try to dispute it. Maybe I'm paranoid, but I don't trust the expertise of some of those CSRs.



Cre wrote:How does one know that 61 days is the required waiting period for making a CLI request?

This is another perk of Amex. You'll see backdating and 3X CLIs mentioned a lot. After 61 days you can request a CLI of 3X your current credit limit. They still base the decision on their estimation of your creditworthiness and income, however.



Cre wrote:Are there other requirements (beyond simply credit in good standing) to making a CLI request?

You can make a request pretty much whenever you want, though you may have to wait a minimum time period between requests. With Discover I believe it is 90 days, for example. The issuer will make a decision based on an analysis on your history with them and your credit. Sometimes they will require a hard pull, which will have a negative impact on your credit score, and sometimes they won't. It is always YMMV (your mileage my vary) in these situations - it is hard to make sense of their decisions as they differ wildly from person to person even in seemingly similar circumstances. Basically you can request all you want, but it doesn't mean they will grant it.



Cre wrote:If an AmEx charge card already requires payment in full every month, and you paid in full every month for at least four months now (61 days plus two months, according to your posts), what other factors would AmEx need to consider in order to raise your CLI? Presumably, you've already proven your ability to charge and pay on time responsibly.

Here is another rule of the credit world: credit limits (and therefore credit limit increases) don't apply to the line of Amex charge cards - Green, Gold, PRG, Platinum, and Centurion. All of Amex's charge cards have no preset spending limit (NPSL). Most standard credit cards (which let you pay over several months and charge interest) have a hard credit limit set over which you cannot spend. Not so with an Amex charge card. There is some "hidden" limit - you won't be able to go on a yacht buying spree in a month - but you don't know what it is and it can change from month to month.

To answer your question broadly, though, they consider your creditworthiness, your income, and your history with the company. You could have an 800+ FICO, but they won't keep extending CLIs if you're making $15,000 a year. Similarly, if you have a $10,000 credit limit but never charge more than $2,000 a month, they may not up it any more. They won't expose themselves to the risk if they think you won't use it / don't need it. These aren't hard and fast rules, mind you, just (some) factors that could go into their decision.



Cre wrote:I just opened a new AmEx card this week, and no where on the application did they ask me what kind of credit limit I was seeking. There was no provision to make the request. When the application was approved (online, instantaneously, scary) they granted me a 24K limit. Is it a good idea to request a CLI in 61 days?

When applying you usually (possibly always) don't get to request an initial credit limit. They will give you what they think your credit warrants. Over time they may or may not increase this limit. It can be an auto-CLI (and you just get a letter in the mail saying it's been increased) or it can be initiated by you.

And congrats on that limit - quite nice.



Cre wrote:One poster on this forum recently said that he/she requests that the card issuer REDUCE their credit limits. What is the beneficial strategy behind that? Maybe it is a good idea for the OP to leave the limit as it is, depending on why one would want to reduce the limit?

This was during a discussion about whether one can have TOO MUCH available credit, if I recall correctly. Generally, the higher your total available credit, the better. Given a particular outstanding balance, the higher total available credit the lower your utilization ratio is (which improves your credit score). The concern was whether you get to a point where you have so much available credit that you apply for a card and the issuer sees all that available credit as a risk. So the poster's concern wasn't over the credit score, but over other factors an issuer may consider in approving a credit card. You would have the option of running up a ton of debt, so the issuer could be more hesitant to give you a card. There are people here with $100,000+ in total credit card limits. It doesn't necessarily mean you are a red flag, but it does mean you could potentially get into serious trouble and expose an issuer for a new card to some risk.



Cre wrote:Is it common for credit card issuers to request an income tax return sent directly by the IRS to the card issuer?

I just remembered that my other longtime held credit card has a limit of 33K, and I never had to fill out a 4506-T. ???

AmEx asked me surprisingly few questions, and I hadn't personally applied for a credit card in over a couple of decades, so I didn't know what to expect. I will say that I have never missed a payment, and never have been late on a payment, ever, not even once, in my entire life. I've done without some things that I wanted when I was younger, but I've never bit off more than I can easily chew. However, I'm not convinced that means anything to the credit bureaus though, according to what I read.

American Express conducts financial reviews (FRs) on customers under certain situations. I can't say how often it happens (though overall it is rare), how easily it is triggered, or how much of a headache it is to go through, but I'm sure they aren't fun. They do this to verify income and assets, and may use the results to take adverse action on accounts. Obvious, basic example: you lied on your application about your income, Amex conducts an FR, you can't prove you make how much you said you did, Amex reduces your credit limit/closes your account/etc. You very likely don't have to worry about this. If $24,000 is more than you will ever use, however, you might not want request an increase on this card just to play it safe and not trigger a financial review. Not a recommendation; just a factor to consider (they never end, if you hadn't gathered by now).
-Vattené
FICO-8:
EX - 809 (11/16) | TU - 803 (11/16)
Primary Cards:
American Express EveryDay - $20,000 (10/14)
Discover it - $23,000 (2/14)
AU on Barclay Sallie Mae - $10,000 (8/15)
plus several store accounts of varying usefulness now

Cre
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Postby Cre » Fri Nov 07, 2014 8:37 pm

What a nice, thoughtful, helpful and thorough post. Thank you very much Vattene! I wish there were points that I could grant you for taking the time to explain some things I never knew, and never would have known were it not for your post. I really appreciate it, more than I can convey with these words of genuine thanks.
Current Cards:
AmEx Platinum Charge: NPSL, $450 AF
AmEx Reserve Credit: $30K limit, $450 AF
Chase Slate Visa Credit: $32K limit, No AF
Future Strategy:
Near Term: Need a good MasterCard for places that won't accept AmEx or Visa
Long Term: Will downsize out of one or both current AmEx cards to reduce AFs

flan
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Postby flan » Fri Nov 07, 2014 9:29 pm

Vattené wrote:
American Express conducts financial reviews (FRs) on customers under certain situations. I can't say how often it happens (though overall it is rare), how easily it is triggered, or how much of a headache it is to go through, but I'm sure they aren't fun. They do this to verify income and assets, and may use the results to take adverse action on accounts. Obvious, basic example: you lied on your application about your income, Amex conducts an FR, you can't prove you make how much you said you did, Amex reduces your credit limit/closes your account/etc. You very likely don't have to worry about this. If $24,000 is more than you will ever use, however, you might not want request an increase on this card just to play it safe and not trigger a financial review. Not a recommendation; just a factor to consider (they never end, if you hadn't gathered by now).


Other card issuers do the same thing, this isn't just an amex thing. Amex gets talked about more, but I don't know if they do more review than other lenders, or not. Amex are stricter about what documentation they take when they want documentation; they generally won't take anything other than IRS docs (like the tax transcript); other lenders will take things like bank statments and pay stubs.

Also, the tax transcript when asked to support a credit limit increase is usually optional. Failure to supply it means you don't get the increase, but they don't touch the accounts. An FR because they think you're doing something illegal or that they don't like (like manufactured spend) is not optional. Respond, or get accounts closed.

And, despite all the numbers you see posted on forums, I don't think Amex have a hard and fast number where they decide you need to document your income. They know lots about you, and can see what you're spending on other cards. (Or, at least, reported balances.) Given some history, and good evidence of income, they go quite a bit higher than 25 or 35 k before asking for a tax transcript.

@Cre: One of the reforms after the recent financial crisis was that lenders have to consider you ability to repay them when making a loan. Yes, it's crazy that they wouldn't, but it happened a lot. One of the consequences of that is that most lenders stop giving automatic credit limit increases to existing customers ("auto cli" in the local lingo) if they don't have evidence about income. That can be from filling out a form on the website, asking for a CLI, or just updating your file with that information. In the past, lenders would often give CLIs just based on usage and payment history, and so would give big limits to people without the income to support them.

Cre
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Postby Cre » Fri Nov 07, 2014 9:33 pm

Thank you very much for your additional and specific insights, Flan!
Current Cards:
AmEx Platinum Charge: NPSL, $450 AF
AmEx Reserve Credit: $30K limit, $450 AF
Chase Slate Visa Credit: $32K limit, No AF
Future Strategy:
Near Term: Need a good MasterCard for places that won't accept AmEx or Visa
Long Term: Will downsize out of one or both current AmEx cards to reduce AFs

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Vattené
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Postby Vattené » Fri Nov 07, 2014 9:38 pm

You're quite welcome! I was in your position not too many months ago, and I'm happy to share any information I've learned along the way.
-Vattené
FICO-8:
EX - 809 (11/16) | TU - 803 (11/16)
Primary Cards:
American Express EveryDay - $20,000 (10/14)
Discover it - $23,000 (2/14)
AU on Barclay Sallie Mae - $10,000 (8/15)
plus several store accounts of varying usefulness now

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Vattené
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Postby Vattené » Fri Nov 07, 2014 10:53 pm

Also: thanks for the clarification, flan. Amex is the only one I've ever seen anyone post about, but I am not at all surprised to learn other companies do this.
-Vattené
FICO-8:
EX - 809 (11/16) | TU - 803 (11/16)
Primary Cards:
American Express EveryDay - $20,000 (10/14)
Discover it - $23,000 (2/14)
AU on Barclay Sallie Mae - $10,000 (8/15)
plus several store accounts of varying usefulness now

thom02099
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Postby thom02099 » Sat Nov 08, 2014 9:58 am

Anecdotally, for AMEX Revolver CLI, the limit is $25K; anything above that prompts a FR for consideration. Doesn't mean that one can't go above that, just that additional documentation is needed.

One will read at "other" forums about folks starting at a CL of, say, $2-$5K and try to get a 3X CLI as frequently as possible to reach that mythical $25K limit. But the same folks seem to be terrified of the mythical AMEX FR process, so they will sometimes stop at $24,900 CLI. Go figure. There's nothing sinister about an AMEX FR. Either one can provide the documentation to support a CLI above $25K...or not. It's just that simple.

Regarding the OP and bad experience with AMEX CSR; that is truly unfortunate that the request fell through the cracks. However, I think this is the exception rather than the rule. Having been an AMEX member for longer than many of you have been alive (1976 originally), I can honestly say I've never had a bad experience with AMEX customer service.

Perhaps Travis from AMEX will see this thread and weigh in on what may have happened on OP's circumstance.
Retired, and in the process of retiring cards!
EQ = 846 EX=828 TU = 836 as of 02/2016

Cre
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Postby Cre » Sun Nov 09, 2014 2:36 am

Here's another anecdotal point about AMEX CLI that I learned over the phone today, which seems consistent with what thom02099 posted.

According to the AmEx rep I spoke with, the 3XCLI doesn't apply if the credit limit is already high. The rep did not state exactly how high was high, but indicated that my starting CL was fairly high for a revolving credit card. He said the 3xCLI in 61 days is more applicable to initial credit limits of $2,000. Hence, the 3XCLI would jump to $6,000 if approved. Or $3,000 could jump to $9,000.

So I asked him, if I waited 61 days, and asked for a 3XCLI, would I get one. He said no, not once one already was at the limit I was approved for. But then he did something else while we were talking, unbeknownst to me. He put in a charge for $30K on my account, and it went through no problem and was approved, even though my limit was only $24K. My first question was will that charge you put through effect my credit rating? He said no. Apparently the AmEx reps can put through charges to test what will get approved. This seemed like useful information to know.

So, the take away here is, yes, there is a limit to the limit, in that 3XCLI doesn't apply to CL's that are already above a certain threshold. While the AmEx rep did not state what that specific threshold is, we now have two anecdotal examples that are consistent with each other, right about the $25K mark.

The second take away is, no, there is no limit to the limit... or at least, the stated limit can be exceeded, by no small amount, at the discretion of whoever is behind the black curtain who makes these determinations on the spot. The useful information I see here is that even though one's card may have a limit, it may be possible to exceed that limit on a purchase, if approved. From this I gather that for those who actually need a CLI to use, not just to lower their percentage of utilization, there appears to be an approval methodology already in place to allow for it on a case by case basis.
Current Cards:
AmEx Platinum Charge: NPSL, $450 AF
AmEx Reserve Credit: $30K limit, $450 AF
Chase Slate Visa Credit: $32K limit, No AF
Future Strategy:
Near Term: Need a good MasterCard for places that won't accept AmEx or Visa
Long Term: Will downsize out of one or both current AmEx cards to reduce AFs

thom02099
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Postby thom02099 » Sun Nov 09, 2014 9:59 am

Cre wrote:Here's another anecdotal point about AMEX CLI that I learned over the phone today, which seems consistent with what thom02099 posted.

According to the AmEx rep I spoke with, the 3XCLI doesn't apply if the credit limit is already high. The rep did not state exactly how high was high, but indicated that my starting CL was fairly high for a revolving credit card. He said the 3xCLI in 61 days is more applicable to initial credit limits of $2,000. Hence, the 3XCLI would jump to $6,000 if approved. Or $3,000 could jump to $9,000.

So I asked him, if I waited 61 days, and asked for a 3XCLI, would I get one. He said no, not once one already was at the limit I was approved for. But then he did something else while we were talking, unbeknownst to me. He put in a charge for $30K on my account, and it went through no problem and was approved, even though my limit was only $24K. My first question was will that charge you put through effect my credit rating? He said no. Apparently the AmEx reps can put through charges to test what will get approved. This seemed like useful information to know.

So, the take away here is, yes, there is a limit to the limit, in that 3XCLI doesn't apply to CL's that are already above a certain threshold. While the AmEx rep did not state what that specific threshold is, [color="red"]we now have two anecdotal examples that are consistent with each other, right about the $25K mark.[/color]The second take away is, no, there is no limit to the limit... or at least, the stated limit can be exceeded, by no small amount, at the discretion of whoever is behind the black curtain who makes these determinations on the spot. The useful information I see here is that even though one's card may have a limit, it may be possible to exceed that limit on a purchase, if approved. From this I gather that for those who actually need a CLI to use, not just to lower their percentage of utilization, there appears to be an approval methodology already in place to allow for it on a case by case basis.


There are many other examples; it's frequent topic of discussion at MyFICO. One only needs to do a quick search over there to find a plethora of postings. Some are more "authoritative" than others...
Retired, and in the process of retiring cards!
EQ = 846 EX=828 TU = 836 as of 02/2016



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