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June 29, 2006
Cutting off Amex
Dear American Express,
I’m cutting you off. Or perhaps I should just cut you up.
Nonetheless, I’m done with your parlor game called Guess Your New Interest Rate! For the third time in 1.5 years, you goosed mine to 29.9%. I have been faithful to your tied-to-the-tracks 14-day payment window. I’m nowhere close to exceeding my credit limit. Lord knows your reason this time. Crooked stamp?
I know I can call your 800 number and negotiate my rate back down. Again. (And that incessant beep going off every 15 seconds…OK, we get it! The conversation is being recorded.) But we're past that, bitches.
Something is causing you to play this game. Wall Street? Revolving debt did drop $1.5 billion in March. Not good for revenues. A Wall Street knife to your throat is scary.
A computer simulation guessing that people like me won't notice our rates have tripled? That might be it. I'll admit it -- you got me for a few months with 29.9%. I didn't notice. Joke's on me, right?
So Amex, I'm cutting you off from your gilded allowance. We've been buddies for 20 years, and your idea of loyalty is to jam a 9mm in my ribs. Quaint like the mob.
As a jilted ex, my name is revenge: a bill paid in full. Every month, no matter how much it hurts. It'll be sweet.
For you fellow Amex'ers, check your rate. The card is a player.
Regards,
Ben McConnell
Cardholder since 1986
Update: Howlin' Hobbit points us toward this Newsweek story about more credit card company shennanigans (practically a category unto its own for the Consumerist). Newsweek quotes the publisher of an industry newsletter, whose comment made me laugh out loud, and I don't mean that in a digital way: "The average American household includes four and a half Visa, MasterCard, American Express and Discover credit cards, and you do everything you can to be nice so customers will use your card rather than your competitor's."
Update 2: In the comments, Peter Kim of Forrester says the research firm "asks consumers to rate financial services firms annually on 'customer
advocacy.' Credit unions and USAA tend to come out on top. Traditional retail
banks and credit issuers consistently come out near the bottom." Makes sense given that both entities are in business to serve customers first.
What I didn't mention in my post is that I had included a letter with my Amex payment (that paid off the balance). It was a snark-free version of this post. An automated letter arrived from Amex yesterday saying it was bringing my interest rate back down to earth. How long that will that last? We'll see. Not long is my bet.
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I thought it was just Chase.
It JUST happened to me with their card. I've had it for almost 10 years, and they have given me some $12k in cheap credit (4-5%/yr).
I haven't used the card, since I maxed it out on relatively cheap money, and just pay what's due each month.
Last month, I called to see what was available, and used that amount to pay for a broken window on my RangeRover by vandals.
Two days later, Chase notified me I had gone over the limit, even though I had called first, and the entire $12k is now at 29.9%.
When I asked for a supervisor to explain, they tried to put me through, but came back and said, "they won't let me put you through - you'll have to pay this rate for 6 months and then they're reconsider your rate."
I have perfect credit with them.
I will pay off the card, and never use Chase again.
Good for you, Ben. Don't Let 'em screw you!
I was actually a fan of Amex for years. Never a problem. Until recently. Sad to hear that Chase is doing the same kind of stuff.
It's that bankruptcy bill the credit cards got passed awhile back -- it's harder for consumers to get out of credit card debt, so the credit cards don't lose as much money, so interest rates are going down just like AmEx and co. predicted.
"Goosed" means "drastically reduced", right?
Dan -- That bill was a monumental sweetheart deal for the credit card companies, about as anti-citizen as they come. Great point.
I didn't realize Webster's had such a straightforward definition of goosed: "to poke between the buttocks with an upward thrust."
It's Chase, MBNA and probably many others. First of all, I have yet to see one of the so called notices that they say they send. And yes, in both cases, I didn't notice it until several months had gone by. The bankruptcy bill has much to do with it and sweetheart deal is exactly right. The second most egrecious part of it is the explanation after you ask them if you have ever missed a payment on anything with anybody. No, but we are concerned that you might. Oh, why is that? Because you are close to your credit limit. Isn't that why they call it a credit limit? Have I ever given you any reason to believe that I wouldn't pay the bill? No, but you might not, so we will triple your interest rate. Call us back in 90 days.
And the most outrageous part in my opinion is that we wonder why low income people don't pay off their debt. They can't because with the interest rates they are given, 29% and up, their debt becomes impossible to pay off no matter how hard they try. The wealthy are the ones with the $100,000, no interest for a year, 7.9% thereafter offers.
When I first read this post, I thought, "man, that sucks." Then yesterday, Citibank reminded me of this post - they reserve the right to raise my rate to "Prime + 23.99% or 28.99% - whichever is greater."
This week, that equals 32.24%.
Forrester asks consumers to rate financial services firms annually on "customer advocacy". Credit unions and USAA tend to come out on top. Traditional retail banks and credit issuers consistently come out near the bottom.
The issue really isn't rising rates. Fed raises rates, cost of borrowing increases, firms need to adjust policies accordingly. The problem here is that the companies have done little positive lately for customers...if ever.
I have had an American Express card trough Costco. Costco stated that by getting the American Express through Costco I would get a two percent (2%) rebate on the dollar amount I charged. They started charging me finance charges higher than the rebate. I callled AmEx and got rude response. I am going to surrender my AmmEx card, but only after I collect over $150 in rebates due me. If I surrender before I collect the rebate due me AmEx advised that I would forfeit the rebate due me. Word for the wise is to stay away from American Express.
THis blog made me look at my card member agreement from AMEX they can move your rate it says if you pay late 3 times or if you go 30 days past due EVEN if you have a return payment they will up your rate. Also it says you will have that rate for 12 months. So they lowered it for you? Well no other card co would probabley do that if it happened more thatn once... HUM maybe it would have worked it you would have paid correctley. AS FAR AS ME I AM sticking to it!! DON:T LEAVE HOME WITHOUT IT!!!
I am an artist who sells my work at art festivals. I accept credit cards and my proscessor fees for my merchant account are .22 cents per transaction plus 2.09 percent that the visa and mastercard siphon off of the total of each sale (that total includes the tax). I was pretty sure that I was getting a fantastic rate on my transactions. But I found it extremely difficult to near impossible to figure out my monthly statements. They seem to be intentionally complex and indecipherable. But it did seem like a huge cut was being taken out of my profits. I called and was told that when someone uses a card that is connected to ANY type of REWARDS program (Costco cards that give you a percentage back, Borders Visas, Amazon Visas, any card that says they give their customer a reward of some type for using it) that I was being charged an additional 2.89 percent. That means that I'm paying 5 percent of my total sale to visa and mastercard so they can appear to be giving something to their customers for "FREE"!!!! I find this totally unbelievable. If anyone out there is famillar with the intricacies of this practice I would love to know more about how these companies get away with being so backhanded.
