Bell Curve The Law Talking Guy Raised by Republicans U.S. West
Well, he's kind of had it in for me ever since I accidentally ran over his dog. Actually, replace "accidentally" with "repeatedly," and replace "dog" with "son."

Saturday, May 02, 2009

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.


Raised By Republicans said...

I have to wonder what the over head is on a credit card company. I mean, do they really need a 30% rate to make a profit on someone who is a reasonably average credit risk? Sheesh! Especially when the prime rate is in the low single digits.

The best revenge is to just stop using the credit cards. Let them know that they have price themselves out of the credit market.

Bert Q. Slushbrow, Sr. said...

As someone who uses credit cards for every last thing I can and who also pays them off every month (I haven't carried a balance or been late on a payment in about 15 years) I wonder if the motivation here, with people like your friend, isn't to get rid of them. People like myself actually only cost them money (in rewards and whatever costs there are in maintaining and processing my account). We can't be good business for them so perhaps they are trying to get rid of us.

The Law Talking Guy said...

Cancel any cards you dislike. This is the only leverage we really have. You can also write letters if you are treated badly. Letters often get results that phone calls cannot dream of. For the 10%-30% thing, write your Senator. They need to hear that this matters.

As for the reduced limit on the credit card- just call and ask to cancel the card. They may give you inducements to stay (they can be weird like that). If they ask you why you are canceling, say "poor customer service." Then write a letter complaining of the poor customer service.

As consumers, we need to inch away from credit. I say "inch" because it is, of course, difficult to do quickly.

Btw, I have been an AmEx customer for 15 years and never found the service anything but terrific. I have found them in general to be polite and helpful in all things. I have been a booster of AmEx generally for this reason, which is why i will pay the annual fee. If this changes, however, be assured that I will treat them the way Chase treated you: as if history did not matter at all.

USwest said...

I'll start canceling once I have my mortgage. Consumers are damned if they do, damned if they don't.

Raised By Republicans said...

When I got my mortgage the same bank offered me a new credit card with a much much lower interest rate than my old one. So I shifted the balance over to the lower rate card and paid most of it off. When I get the mortgage you might want to ask about them giving you a new low rate card too.

The Law Talking Guy said...

You got your mortgage with a bank? How quaint. Most of us have our mortgages sold and resold repeatedly.

The Law Talking Guy said...

FYI, if you have a Capital One credit card, that actually *lowers* your credit rating (unless the credit rating is so bad that you can only get a Capital One card). Other cards work the same way. Here's how to tell. Pull a copy of your credit report and see if the credit report lists your card as maxed out even though it's not: Capital One cards always do that.

This is why credit rating agencies should be heavily regulated by the federal government, as should the uses of their data. It is un-American for private companies to collect data on private persons, keep it secret from those persons, but have nearly dictatorial power over the lives of those persons in all credit decisions.

Also, credit rating agencies - aside from being heavily regulated - should be required by law to do all of the following: (1) give you all the data about you FREE as often as you ask for it (2) automatically give you a copy of anything they send any other person who makes an inquiry (3) not be allowed to give data to any person absent a specific request (i.e, no ongoing rights for lenders allowed). All credit rating info sites that sell you your own data(!) should be banned, including the falsely named "" which actually charges you for an ongoing membership after the first 30 days, so it's as free as a storage facility with "one month free rent" on the front of it, i.e., not free at all.

At least California forbids the use of credit reports in employment decisions! Some states don't even do that.

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Anonymous said...

American Express is the very definition of EVIL. Don't apply. I f you have an account, close it. If they screwed you, massively complain, and fight back and spread the word. American Express needs to be taken down.

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Steve Flemming said...

Add me to the boycott of AMEX.

A "member" since 1991 I had charged an estimated 500,000 dollars and paid off the balance for the last 21 years.

No due a divorce and no fault of my own my credit is shot and they cancel my card.

Love to know how to hurt AMEX back.

Mark Olivier

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