American Express Writes Down $275 Million Because You Can't Pay Your Bills

American Express stock fell 7% after saying it would have to write off $275 million, thanks to more and more customers not paying their bills. What is probably happening is that people can’t tap their home equity so they’re going to the next easiest line of credit, credit cards, and failing to pay their bills there as well. In Walden, Thoreau talks about how early New Englanders would make their first homes by digging a cellar in the ground and putting a roof of saplings and bark over the top of it. My, that would make a mighty fine recession shelter.

American Express Warns About Earnings [NYT]

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  1. Sudonum says:

    Don’t look at me, I paid my AMEX bill

  2. chiieddy says:

    And I pay my mortgage!

  3. cmdr.sass says:

    I’m Spartacus

  4. nursetim says:

    I don’t even have an AmEx card, so my hands are clean.

  5. Juliekins says:

    I pay my AMEX bill in full each month (I’m a deadbeat) AND my mortgage. NYAH!

  6. Imaginary_Friend says:

    I pay both of my Amex cards off in full each month, too. Don’t hate the player, Amex… why don’t you save a few bucks by NOT hiring Martin Scorsese to direct and star in your stupid commercials.

  7. MercuryPDX says:

    I have two cards but only use them for real emergencies (aka never).

  8. Parting says:

    I guess the mortage problems are catching on. If I couldn’t pay the minimum on my credit card, I’d be desperate.

  9. stinerman says:

    @FitJulie:
    You pay your mortgage in full each month? How many houses do you own?

    :-)

  10. CumaeanSibyl says:

    @cmdr.sass: I’M SPARTACUS

  11. Imaginary_Friend says:

    For the record, I love Martin Scorsese. I just think it’s ridiculous for companies like American Express and the GAP to waste millions of dollars on celebrity endorsements, and then act surprised when their companies are hemorrhaging money.

    Memo to Big Businesses: If the product/service is good, people will buy/use it, irregardless of which celebrities whore themselves out for you. We’d rather you spend your money making your products less expensive and more useful to us consumers. KTXBAI.

  12. JustAGuy2 says:

    @Imaginary_Friend:

    That may be the case for you, but overall, it’s not. Don’t you think the companies have tested this? Run the focus groups, studied the data?

  13. timmus says:

    Won’t anyone here admit to not paying their bills? I hate it when a story like this gets posted and all we hear is a round of golf claps for everyone’s punctual bill paying record.

  14. Mr. Gunn says:

    timmus: Those people are probably not the sort that would read the Consumerist. Go ask at the FatWallet forums if anyone just goes out and pays full price for something at a store.

    /just paid mine 26 minutes ago, before I went the gym

  15. magus_melchior says:

    “In Walden, Thoreau talks about how early New Englanders would make their first homes by digging a cellar in the ground and putting a roof of saplings and bark over the top of it. My, that would make a mighty fine recession shelter.”
    … or a fine pitfall, depending on how good the roof blends in.

  16. UnnamedUser says:

    @TIMMUS …
    Those who don’t pay their bills don’t come to this forum! Folks who read and post here are the choir. We are preaching to one another.

    Some would say we are playing [Transactional Analysis term] the game of “Ain’t it Awful”. Frankly, I like the game from time to time.

    Seriously: I really quite concerned where the detritus of the Mortgage Meltdown will settle. Recession, Depression, Deflation, Inflation, Civil Insurrection — Anything is possible. In any case, we live in interesting times.

  17. Rusted says:

    What Amex? What mortgage?

    @timmus: I always pay my bills. Learned a long time ago bad things happen to those who don’t

  18. whydidnt says:

    I actually don’t see how this is newsworthy, except on the business pages. American Express made bad decisions in granting credit to people who couldn’t afford to pay them back. They are now taking a loss because of those decisions. The people who aren’t paying will most likely suffer damage to their credit, so both parties are punished by their bad decision. Isn’t that how it’s supposed to be?

    From a business standpoint, AMEX makes money by lending to people and charging interest on what those folks borrow. This is their business, and like any business they have to manage that risk. Why don’t we see news that a drug company is writing off millions of dollars because the drug they were developing causes birth defects? It’s the same concept they invest in their business with the hope of making money, but sometimes they make bad decisions and take losses.

  19. Greeper says:

    Um, like, shouldn’t Congress be like totally bailing me out of my AMEX bill? Like don’t I have a Constitutional right to XBOX live and stuff?

  20. jrdnjstn78 says:

    It’s so easy to chastise people for not paying their credit card bills when we don’t even know their situation. I admit I have missed maybe one payment only because I had forgotten to pay on time.

    I have to use my credit cards sometimes because my kids dad is a deadbeat and avoids paying his child support to help me out so sometimes it gets tough. I do at least try to pay the minimum and if I can pay more at the time I always do.

    I’ve also had to put medical bills on my credit cards because the insurance doesn’t always cover the full amount. Which we all know that when you get Tylenol at the hospital they charge you $50 bucks for one!