Amex screws someone over

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scorch
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Amex screws someone over

Postby scorch » Sat Jan 31, 2009 11:44 pm

Anyone ever heard of behavioral scoring or behavioral analysis? Well it seems to be this new thing lenders seem to care about when determining credit risk. A business owner recently opened an Amex Blue card and had a HUGE CLD out of the blue because of where he used it.

ABC News: 'GMA' Gets Answers: Some Credit Card Companies Financially Profiling Customers

The guy now has his own website as a way to protest what happened to him.

NewCreditRules.com


DGenerateKane
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Postby DGenerateKane » Sun Feb 01, 2009 1:12 am

....WTF? How can that even be accurate?

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Mogul of Pineapples
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Postby Mogul of Pineapples » Sun Feb 01, 2009 4:36 am

Here's another link - Credit Cards: American Express Judges You Based On Who Holds Your Mortgage, Where You Shop

(sidenote thanking The Fuzz for telling me about this article)

Personally I've also suffered a similar credit line problem with American Express which I talked about here - http://creditcardforum.com/american-express/379-credit-allocation-between-personal-business-amex-cards.html. I was not able to resolve this problem and I have a strong suspicion that part of the criteria is the location/zip code I live in, which is one of the most expensive in the country. Although I do not have a mortgage they seem to blanket the negative towards anyone in these high-risk areas regardless.

The peculiar thing is American Express has publicly admitted doing this in the form of the reasoning on there letters, only to go back and now deny they do it, despite admitting it on paper.
Disclosure: I am a moderator/paid staff of this site, which does have advertising relationships with some credit cards that are discussed and linked to. Regardless, anything I say is my honest opinion.

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Cucumber
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Postby Cucumber » Mon Feb 02, 2009 12:41 am

American Express using shopping patterns to lower credit limits and up interest rates is soooo wrong!!! This was on Good Morning America too. I saw something else about this on a blog and they listed Starbucks, Amazon, and Ruby Tuesday as 3 places that were recurring as places that American Express was classifying as risky. :eek:

I think I might stop using my Amex card as long as this is going on. This is too messed up. I buy at such a wide variety of places depending what part of town I'm in and I am honestly a zero risk and have zero balances.
OBAMA
Stop talking crap about him!

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The Fuzz
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Postby The Fuzz » Mon Feb 02, 2009 4:33 pm

AMEX isn't the only company doing this. Many, and probably most, banks use this information to determine risk these days.

I don't know what they are talking about when they say that AMEX has told their people to say that we never used that method. Here is the verbiage from the actual communication that was sent out.

"- Previously American Express had also used “where you shop” as a reason to reduce credit lines. It was never a determining factor by itself and it was confusing to Cardmembers because it was not about specific merchants and so we have decided to stop using it."

Nowhere in the communication does it direct anybody to deny using that method as A FACTOR in deteriming line of credit allocations. We may have used it in the past as one of multiple things that decisions were based on, but it was never the sole factor. It is the general misinformation and uninformed nature of most Americans when it comes to credit that causes this kind of panic when they hear something they don't understand. So much more goes into 'credit' than just paying your bills on time. How much of your bill you pay, what kind of bill it is, how long you have had the bill, and what other kids of bills you have all play factors in your credit rating. Believe me... It is far more complex than anything you are going to read in the terms and conditions of your credit card application. Credit is truely a multi headed beast and it is constantly changing.

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The Fuzz
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Postby The Fuzz » Mon Feb 02, 2009 4:43 pm

Something else to note is that first story doesn't say what his other reasons were for getting the line of credit cut. Sure where he shopped might have been one of them, but what were the others? FICO score drop? High debt to credit ratio? Too many inquiries? Or maybe he just isn't utilizing the credit he has access to and American Express doesn't want to put more money at his finger tips than he really needs access to. You could give me a million dollar credit limit and I wouldn't use it. I don't need more than a $4000 or $5000 line of credit because I pay my card off every month. If in the past two years he has proven that he doesn't spend more than $3800 per month, then why does he care what his limit is? If he really needed a limitless credit card then he should have gotten a charge card.

People put way too much emphasis on their line of credit. My credit score is near 800 and my Blue card has a $2000 credit limit on it. It is because I don't ever spend more than that much on it. Having a $50,000 line of credit would be nice to brag about, but seriously... What good does having something like that do you? So you can get into debt up to your eyeballs without maxing out the card. Good for you. LOL Having a high line of credit does nothing for your credit score and it isn't an indication of what your credit really is. Ideally your line of credit shouldn't be any higher than what you charge and pay off every month. In this economy it is a very very very wise idea to not carry any balances. It is even wiser if you are trying to build a high FICO score.

Ok, I'm off my soapbox now. :)

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Postby 1bootcamp » Tue Feb 03, 2009 1:42 am

It's one of those things you know that you hate but what can you do. It's not that shocking they do it.



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