Amex jumps the gun

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Amex jumps the gun

Postby teaguejb » Sat Jul 25, 2009 1:20 pm

I got a letter a couple weeks ago stating that my 4 month old Amex clear account had been canceled. The letter stated it was because of 1)length of time accounts have been established; 2) high credit utilization; 3) a derogatory record or collection account; 4) length of time since derogatory record or collection account too short.

1) I assume this one meant other credit accounts. My oldest credit account (a citibank mastercard) is nearly 14 years old. Not sure why they would have a beef with this.

2) I normally maintain about 10-15% balance on my credit cards. I just had an unforeseen emergency expense, so at the time the account was canceled, my credit utilization was about 30%. Is this really over the line?

3) I checked my credit report with Experian (the reporting agency indicated in the cancellation letter) and there is no public record or collection account. However, I did catch something back in May that was an error that has been removed since that time.

4) public record or collection account.

I believe all of this happened because I was one day late paying my statement due July 2. I never pay late, but because this is a new account I guess it just slipped through the cracks. The whole point of the clear account is that having a minor misstep like a payment being a few days late or going over your credit limit by a few dollars (which I never did...never had a balance more than 10% of the credit limit) is not supposed to be that big of a deal. So, instead of charging a fee, Amex decides to close the account?

I sent Amex a very thoughtful letter explaining why I think they had made a mistake and requesting they reverse the account cancellation. I just got a response letter. It really is very curt and does not acknowledge the thoughtfulness of my letter to them. It says nothing except "we are not going to reverse our decision."

Does anyone here think this account should have legitimately been canceled? If not, why are they purging me? Nothing about the financial environment has changed since I applied for the account except credit card reform legislation. Nothing about my credit situation has changed except the one unexpected expense and resulting slightly higher credit utilization. I have used the account about a half-dozen times in the four months I've had the account.

I'm a little ticked-off about this. Maybe you guys will clue me in about something that has precipitated this. If so...perhaps I will apply for another Amex card sometime in the future. If not...I'm going to come down hard on Amex on all of these forums and I will never do business with Amex again.

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sorry about your run-in with amex

Postby jeffysdad » Sat Jul 25, 2009 2:13 pm

I'm absolutely no expert on these things, but I think your paying late is what tipped things; then they pulled your report and added any negative details they could find to rationalize what they wanted to do in the first place: close your account.

I wouldn't worry about it; get another account with someone else.

However, you should be working at paying off your debt as fast as you can. I don't know your circumstances, but do the best you can. When you don't owe anyone anything then you are in a position of real power in dealing with cc companies, banks, etc.

About 10 years ago I had more than 35k in cc debt. I thought I would always be in debt; it just seemed like such a fantastic amount that I would never pay it back. Then I snapped out of the denial and buckled down and paid it all off, in full, always on time, always at least min. payment over about 2 years. It never occurred to me to do seek charge-off, etc. I've always had stellar credit because of this and now when I read about people having accounts pulled, etc., I realize that I could be in that situation if I had let that debt roll.

When you get yourself in an unassailable position with regard to your credit you will enjoy getting on the phone with those dirtbags at amex and making them squirm. Good luck
American Express: Blue Cash Preferred (groceries, 6%; gas, department store, 3%); Gold Delta SkyMiles (Delta Air Lines, 2 miles/dollar, free checked bag).
US Bank: Cash+ (utilities, phone, internet, restaurant, 5%; drugstores, 2%).
FIA Card Services: Fidelity Amex (everything, 2%); Fidelity Visa (everything, 1.5%).
Chase: Freedom (rotating, 5%); Amazon (, 3%); PriorityClub (IHG hotels, 5 points/dollar); Sapphire (not in use).

*All cards are registered with PriorityClub IDine program for 8 points/dollar at participating restaurants.

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Postby AnthonyBarone » Mon Jul 27, 2009 2:29 pm

Do you have a scanner or a camera you could use to post a picture of this letter? I know from the guy that runs this site that employees from these companies watch the credit card forums on here to try and keep tabs on bad publicity. I would say you ought to show it for what it is on here and maybe that will get Amex to straighten up their act.

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