Boycott American Express

In advance of the "Credit Card Holder's Bill of Rights" now moving through Congress, every credit card company on the planet is suddenly ratcheting up the fees and raising interest rates, in hopes of grandfathering them in. It has become an epidemic of porcine proportions. Congress needs to put a new provision in the Credit Card Holder's Bill of Rights to reset rates and fees back to where they were in January 2009.

For example, this week I got a note from Bank of America informing me that they were raising all my credit card fees and--get this--that any transaction "processed" overseas has now been defined as a "foreign" transaction, with a minimum 3% surcharge of course, even when the transaction is entirely in USD and all goods and services purchased were in the US. They provided no explanation.

Another example: last week Chase suddenly raised the interest rate on a friend's credit card from 10% to 30%. My friend called several times to find out why, and finally some manager "explained" that he had been five days late on a payment earlier this year. Although this was the only time he had ever been late in almost ten years, the manager explained that since his account had formerly belonged to Washington Mutual before the merger last year, Chase is now treating him as new customer with no credit history.

But the worst credit card company in the nation right now is American Express--and that's saying a lot. Yesterday I got an letter from American Express reducing my credit limit to $1000. No reason was given for the reduction, just some boilerplate about "difficult choices" and "difficult economic times." I have never missed a payment and never carried a balance on this card--never. It is just a slap in the face. You can bet I will never use that card again.

And I am hardly alone in finding American Express especially nasty, even in such a crowded field of nastiness. LA Times columnist David Lazarus wrote of similar experiences with American Express all over the country in his most recent column: American Express' risk-cutting poses its own risks. Lazarus notes that American Express received $3.4 billion in government bailout and now, "turns the screws on long-standing customers and seems determined to show as many as possible the door."

As Congress finally is moving to protect consumers from this kind of fraud and abuse, the recently-bailed-out credit card companies complain that such regulation will prevent them from extending additional credit with reasonable rates and fees. Of course, any reasonable rates and fees will not be affected by the regulation. This crap has got to stop.