Saturday, October 11, 2008

Still Being Stupid About Credit

It was only a matter of time. American Express is now scaling back cardholder credit and even closing accounts based on who they received their home loans from, and what stores they shop in, pointing out that these factors may be indicative of default risk. Not quite "fair enough," but I can see the logic here.

“Our credit experience with customers who have made purchases at establishments where you have recently used your card.”
“Our analysis of the credit risk associated with customers who have residential loans from the creditor(s) indicated in your credit report.”
Reasons American Express gave a cardholder for lowering his credit limit.
But this is the one that kills me. "Spokeswoman [Kim] Forde said American Express would not divulge any of the 'establishments' where a cardholder’s shopping might trigger a review." Meaning that you could go shopping at the wrong places, and suddenly find that your plastic isn't any good.

Why aren't we hearing about a mass exodus of American Express cardholders? Visa, Mastercard and Discover should be lining up to poach disaffected AmEx cardholders, and advertising around this night and day. Unless, of course, they're doing the same thing themselves. Didja read the fine print in your contract? No? Sucker!

But aren't we all?

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