paying down balance = CL cut?

American Express forum. Talk about AmEx credit cards like Blue, Gold, Platinum, Centurion, and more.
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Cucumber
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paying down balance = CL cut?

Postby Cucumber » Tue Mar 03, 2009 1:31 pm

Can one of the Amex people on here tell me if this is true??!

If you pay down your credit card balance then American Express will cut the credit limit closer to the amount of the new balance. Then if you don't larger payments Amex will shoot your interest rate up. If both of these happen it sounds like a lose/lose situation for the cardholder!!

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The Fuzz
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Postby The Fuzz » Tue Mar 03, 2009 11:07 pm

It doesn't happen in every case, but depending on other things that are happening in your credit profile, it can happen. AMEX is trying to reduce the amount of money that people are carrying, as any bank would like to do. For the majority of American Express' fifty years in the credit card industry have been with charge cards that did not allow you to carry a balance. Their entry into this arena some twenty years ago has done nothing but devalue the brand that used to be so elite and exclusive. Now with the economy going to hell in a handbasket, American Express is trying to lower the lines of credit that they gave out a little too generously in the past. People who are having their line of credit reduced as they pay down the balance are people who really don't need to have that much credit. They are people with very high debt to credit ratios and are high risks for the company. Reducing their credit is good for the business.

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Postby Floppster » Wed Mar 04, 2009 5:52 pm

As Fuzz already explained American Express is trying to get back to the roots of their card business... the charge card. American Express who is often referred to as a company who only deals with the wealthiest people made it easier to get Your Name on their card. Especially with releasing all their blue bundles they opened up their market share. Since the economy is going downhill they try to get rid of their "risky" clients which is why they have offers such as

American Express Will Pay Worst Customers $300 (AXP)

Due to the fact that they went into the CC business back in 1987 with the Optima card they hurt themselves quite a bit. Now they try to get back to where they come from.... High and wealthy :)
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indianamom
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Postby indianamom » Thu Mar 19, 2009 6:22 pm

I have heard this elsewhere too. My high balance is probably the only reason my B of A credit card limit has not been cut yet. That's my guess at least.

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shiftk
 
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good

Postby shiftk » Sat Mar 28, 2009 2:32 am

its a really valuable post



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