Report: #342494

Complaint Review: American Express

  • Submitted: Fri, June 20, 2008
  • Updated: Wed, December 17, 2008
  • Reported By: Medford Massachusetts
  • American Express
    P.O. Box 981540
    El Paso, Texas

Show customers why they should trust your business over your competitors...

We've been American Express card holders since 1988. That's 20 years. We carry a high balance, but have always paid it. Just after this past Christmas (2007) Amex suddenly terminated our Sign & Travel (which allows you to pay for higher-priced purchases over time) without warning, and demanded we pay the whole thing at once.

We were taken completely by surprise, not having any expectation that we'd have to pay for everything we charged over Christmas in the very next billing period. So we paid late -- for the first time. But we did pay the entire amount, over the next two months, to get our account current again.

And Amex responded by raising our interest rate from 6.99% to 26.99%.

Now our interest amount alone is more every month than our total bill had ever been. We've called Amex, faxed them, written them, spoken to half a dozen people in customer service and the credit department, telling them we just can't make the payments at 27%, and there must be something we can do to work it out. But they are not interested. The only choice they offer is a payment plan through their credit department that requires you to pay the whole balance in six months at 10%. If the balance isn't paid in six months, you go back to the "default rate" of 27%.

We explained we couldn't possibly pay off the balance in six months at 10%, but they don't care. We've asked them what they think they will accomplish by raising our rate to something we can't pay, when we've always paid every month at the old rate. They don't care.

In short, American Express has chosen to ruin us rather than continue getting paid every month at our old rate. As I write this I have no idea what we'll do. We were more than capable of making our payments every month -- and always did -- until they cancelled our Sign & Travel without warning, demanding full payment for the month of January out of the blue. When we were late with that payment they raised our interest rate to the maximum allowed -- quadrupling it -- and are now adding that interest to the balance every month. And we simply don't have the money.

This seems almost unreal. We had always made our payments on time. But suddenly a high but manageable balance has become a noose that may well ruin us utterly, all because American Express has decided to push our interest rate to the highest allowed by law, even though we've told them we can't possibly pay it.

How can this happen? We were barely using the card. We were making payments and bringing the balance down, then we used it over Christmas, and suddenly we're on the brink of disaster, and it's all in interest payments to American Express.

Who is supposed to be overseeing the credit industry? Who is supposed to be protecting people? We didn't go on a mad spree across Europe or something, then try to dodge paying for it. They cancelled our Sign & Travel AFTER we'd used the card, totally surprising us, then quadrupled our interest rate.

What the h**l is going on in this country? 27% interest, and no way out but total ruin? Who wins that way?

Boston couple
Medford, Massachusetts
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#1 Consumer Suggestion

Amex terminated my Sign & Travel also..Reason given "The economy"

AUTHOR: Globetrekker - (U.S.A.)

I have been a member of American Express for many years..I am proud to say
that I have never been late on my account with them or any of my numerous creditors. ..My credit is immaculate A+ credit history..The other day I was advised that the extended payment portion of my account has been terminated. I called the company to inquire why and I was told by the credit department that many card members are losing this benefit and its based on the economy!
Well at this time I do not have a large balance..I will pay it off and close the account.

I think the end is near for this company!
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#2 Consumer Comment

The End Is Near

AUTHOR: Cory - (U.S.A.)

All these folks that have been living "on the edge", the end is near. With gas prices skyrocketing, same for food prices and now utility bills and everything else, you're screwed. The banks and credit card companies are losing money out the butt, so they're trying to make it up someplace.

The chickens have come home to roost. And it ain't gonna get any better. People are now "living" on their credit cards to make ends meet. That'll only go so far and put off the end for a short period of time. Read the articles about how the credit card companies are now cutting people's credit limit, sometimes, down by half.

They cut your credit limit from $10,000 to $5,000 and you have a balance of $4,000. Your credit card is now at 80% of max, thereby DROPPING your credit score even further, thereby RAISING your interest rate on your other credit cards, you're screwed.
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#3 Consumer Suggestion

What else is going on with your credit?

AUTHOR: J G Shrugged - (U.S.A.)

If you were using Sign and Travel for Christmas purchases, I can understand why they terminated that option on your bill!

Anyway, the way I'm reading the T&C for their pay over time options on the green card allow them to change the limits and the enrollment in the plan based on your credit and recent spending habits.

Since you were constantly maintaining a "high" balance, one little trigger in your credit may have flagged your account to downgrade it based on *risk*. So you paid late over two months to pay it off. Well, two late payments will trigger the serious default rate for 12 months, but now you can't afford 26.99% interest vs. about 17.49% (what your interest rate should have been in Dec 07). But if you paid the balance off in 2 months, why couldn't you keep up with the payments?

Is it because you charged it to the max again after Christmas? I don't see the ripoff here. You had a "pay in full" AMEX that they were allowing you to pay over time, something triggered them to demand it in full, you couldn't pay in time, so they raised your rate. You had a choice to stop using the card or you never actually paid the card off in full, one or the other.
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#4 Consumer Comment

More false information

AUTHOR: John - (U.S.A.)

'Amex suddenly terminated our Sign & Travel (which allows you to pay for higher-priced purchases over time)'

This is NOT TRUE as I have never signed up for any of their peripheral programs yet I can and do pay for some purchase (in excess of $300) over time. So, there clearly is another reason for the increase and demand for payment.

As for the other joker, you were admittedly late and went over the limit and they raised the interest as ALL credit cards do. Learn how credit cards work.
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#5 Consumer Comment

You're Not Alone

AUTHOR: Amexinterestrate - (U.S.A.)

American Express is doing this to a lot of people. Search this site for "American Express" and you'll see. They moved their credit operation (on paper) to a state that allows a default rate of 27%, gave everyone the choice of accepting the new terms or paying off their entire balance (ha!) then set about putting as many people "in default" as they could.

From what I've read, Amex has a lot of bad debt out there, and the market is worried about it. So they found a way to maximize the interest rate their good customers pay, to make up for the losses they expect from the bad loans.

In other words, they're making their good customers pay more, to make up for the bad loans they made. That's why people like you (and me, and many others) who have been good customers for years and have always paid on time, are suddenly getting killed with the insane interest rate. Like you I was baffled that they would do this to a good customer -- but it turns out that's exactly the point: the better a customer you are, the more likely it will happen to you. They need the people who always pay to be paying a higher interest rate.

I'm not surprised to read that it happened to you the way it did; by canceling your Sign and Travel without prior notice right after Christmas they were almost guaranteed that you'd pay late. And when you did -- ka-boom: 27%. In my case they said I paid late, charged me a late fee that put me over my limit, and whammo: I'm "in default." 27%.

Anyone who doesn't think they planned this is crazy. It's happening all over the country, to lots and lots of people. It was a plan. Make up for the bad loans they made by finding a way to charge the paying cardholders the highest rate allowable. Step 1 was move the operation (on paper) to another state. Step 2 was force as many people into "default" as possible.
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