They've been doing this for years, although it's been stepped up of late. There's a big thread about it here: [www.fatwallet.com]

It's called Financial Review (FR for short). Essentially, they want to ensure that you can actually pay your bills. That being said, not at least authorizing a small amount of incremental credit seems insane to me.

All this being that case, you should ALWAYS carry more than one card!

That's so strange - I don't know what to think of this new amex I've been hearing about....

Just like the guy in the story, I also have paid every single amex bill in full, on time, and last week noticed a "finance charge" - I checked when my payment posted and amex's website said I paid 3 days early, but their phone system said I paid 1 day late. Got the charge refunded, but seriously, what gives?

The exact same thing happened to me. They capped my limit at $2k so now the card is basically useless. Good job losing my business, amex.

costco Amex is pretty forgiving. credit lines are as high as $25K.

My husband has a blue card from years ago that he uses very infrequently--usually just during travel. We both have excellent credit and pay everything on-time, and we're often solicited by AMEX to upgrade to other cards, but I didn't have the time to do it and worried about yearly fees.

We got a letter last week saying his interest rate, on a card that's carried a zero balance since March, is going from 9.99 to 16.99. Way to encourage us to use your product! They apply to become a bank, get a bailout and then turn into major assholes. I'll keep giving my business to Bank of America, who have actually been really great to us.

I was just about to switch to Amex as my brother's use it for travel and say that it really pays off. Typically I put around 15K on my cards a month and never carry a balance. I thought Amex would be perfect. I guess I was thinking wrongly.
In my business a declined card at the wrong time could cost my company millions. I could never risk that for a few perks.

I thought Amex didn't have credit limits. Isn't that the point of those ads? They're always telling stories of non Amex customers who get their cards rejected at embarrassing moments.

they did this to me as well. executive customer service was helpful, especially compared with frontline service, but I'm still having a couple of issues. Specifically, they closed one of my accounts in the process of fixing problems on my account and opened two others in my name, charging me $300 in membership fees.

So basically you are opening a new business and so far have no income and all the bills are being paid for by an investor. I can see a higher level of risk there than a W2 kind of guy, but I wonder how Amex would know this.

Also, pretty unfair not to give a little warning first.

AMEX has done this to me a few times. The funny thing is the card I have is a corporate card guaranteed by my employer.

I have talked to people at AMEX frequently on a variety of different issues, and have never spoke to anyone with an Indian accent. Not saying that they don't use call centers, just that they seem to pay extra for the top level English speakers. So that part of the story doesn't ring true to me.

The only thought that I have, is if the account is often paying paid with checks from a 3rd party, it may have set off an alarm.

Just the same, I would think that in an emergency, a few phone calls to other CC's might have solved Nick's problem. I feel for Nick, but no company out there has your back, no matter what the commercials might suggest.

@ironchef: Costco AmEx may be more forgiving, but they are cutting back on the credit limits. My credit line of $36K was cut to $6.5K last January. I found out about the cut while I was trying to pump gas at Costco. I usually put $1K-$3K on the card each month before paying it off. But that month I bought a new heater for my parent's house and put it on the AmEx.

I wasn't stranded as I do carry other cards as AmEx is only accepted at about half the places I go to.

Shouldn't be so hasty, the dude does say he could barely understand what the outsourced guy was saying. Could be a an error lost in translation, or the outsourcer giving up and saying whatever was needed to end the ineligible call.

Wait till someone who you can understand confirms the initial decision before jumping onto a bandwagon.

I find it very interesting that AMEX would continue to push their platinum card given that they are cutting back on people with good credit. I just received an invite yesterday, and after three years was actually considering the upgrade...until reading this.

My sister was stuck half way across the world with AMEX traveler check cards. She prepaid $3000 in Prepaid debt cards before her 6 month stay in Germany. Anyway 2 months later without any warning AMEX canceled the card service. Worst of all AMEX took 2 months to send out checks for then cash left on the cards. AMEX most love leaving people stranded and offer little compassion.

Hey Consumerist Readers:

Nick here. To answer some of your comment questions. I DO have a W-2 with verifiable income. I own an advertising and design company and have a W-2 from my company. It was just our INCREASED spending that the investor is kicking in for.

While my card doesn't have a "pre-set limit".. that's just a buzz word. They DO, in fact, have a set amount that they will shut down your card for. We didn't go over that.

I didn't mind sending them my financials, even though I have credit cards with other companies, no of whom have asked for that, but what my problem has been is that they didn't CALL, EMAIL, send a LETTER, nothing. I found a card that I rarely use in my wallet, so I guess my LA trip is going on that, but it scares me that those ads about how embarrassing it would be to have your card declined are just crap, because they should say, "unless your card is in review."

let me know if you have any other questions.

@B: They certainly do have limits - the issue is just that they don't tell you about it. Normally it's when you hit that unidentified limit that you have to submit to the financial review.

You see they don't say there's no limit, they say there's no "preset" limit. Which is just marketing jargon since most cards assign you a limit based on your means, which is exactly the same in this case.

As a Platinum Card holder in Canada, I spend far less per month than many commenters. I continue to be apprehensive about this card and maybe I should simply ditch it - though the perks have actually been worth the fees.

AmEx has been doing this for years. It is called a Financial Review. They love targeting people who carry balances. If you have an AmEx, don't carry a balance with them. This is the wrong time to be doing it.

That happened to us too. I'd NEVER been late on a payment and always paid more than the minimum. I went to make a purchase and looked like an idiot standing there at the register with a decline.

It seems like I get an American Express credit card application in the mail every month for years. I never applied for the card. I don't want the card. Yet, they continue to waste postage sending this junk.

I never carried a balance on my Amex Blue Cash - I paid it in full every single month. My interest rate was low and I had never so much as been late on a payment. They slashed $7k off my credit limit - dropping it to within $50 of my then-balance, which was a few days from when I planned to pay. I wouldn't have known except for Mint.com alerted me when I logged on to the huge decrease in credit!

So it turns out I have a fraudulent student loan (I didn't even know fraudulent student loans existed) on my credit report. I haven't been paying it - since, you know, I never got the bills or even had any clue the loan existed - so it took a huge chunk off my credit score. Amex found out and slashed my credit. Now I basically don't use the card at all. It's useless with such a low limit. I used to use it for my larger purchases.

@weave: No warning seems to be the defacto operating procedure for most credit cards. I have a Bank of Montreal MasterCard with a $16K limit that I've had for 11 years. It was declined last year (carrying no balance) when I went to pay for a $30 meal with my wife. Why? I had shopped at Ikea for the first time that very day.

They froze the card.

No call to check, no notice. Just a waiting coming back with your card.

On the other hand, the first time I tried to buy a laptop with my AMEX platinum card it wasn't declined outright; instead I was asked, by Apple, to call Amex to confirm the purchase. I knew it was the very first time I was putting $2.5K on that particular card and it made sense. This was a more transparent security measure.

I can't understand the appeal of AMEX. I know in the US many retailers take it, but virtually none take it outside the US as the merchant fees are triple what Visa and MC charge. It also has a yearly fee, something Visa and MC don't have on most cars. And they don't want you to carry a balance, which is fine, however there's no reason you can't just pay off your credit cards each month.

What's the point? Is there some hidden benefit that I don't know of? At least I can bring my Visa or MC with me and use it everywhere (including the US).

I'm trying to see what AMEX is doing with all of this, and it just does not make sense to me. The customer paid on time for YEARS, and they screw him into being stuck 3000 miles from home. I remember the stories about people getting replacement cards hand delivered at no charge when they're about to leave on a trip and misplaced their card, all the rewards etc. Guess all that's gone now.

I recently got one through my job for travel, and it's been nothing but a pain in the ass. No one seems to take it, unless they're part of some national chain. I support mom and pop operations and this card makes it impossible in some places, not to mention that I can't pay my bill online with my check card (company re-imburses me and I have to pay it myself). How in the hell would I know my routing number, I haven't written a check in 11 years.

I guess the glory days of AMEX are over, oh well.

Okay, I just have to say, having only one credit card isn't the best idea. Situations like this show why.

I've got my corp Amex through CostCo, and then a backup Wells-Fargo high-interest, high-credit-line card for emergencies.. Which I never ever use.

@MacQix: Either your employer doesn't trust you (too many charges at the strip club?) or you shouldn't trust your employer if Amex doesn't (do they have junk credit?)

:)

Same thing happened to someone sitting right next to me, He cancelled his card because they asked him for his tax returns and he refused to provide them.

Status symbols arent worth it if convienience is out the door. Especially in these times people will just cancel to avoid the hassle.

Diversify.

This is not a blame the OP. This is a lesson to everyone else.

Diversify.

What would happen if you lost your only credit card? Pretty much the same thing... you would be out of luck on buying small things as well.

AmEx has done some odd things with my cards, lowered the credit limit and all. No biggie. The rewards make up for any hassles.

But I would never travel with just one card, no matter how much I trusted the company. I don't go with a wallet full of cards but I do carry a few just to be safe.

I can't guarantee that my credit card will always be there for me, but I can guarantee that I will always have a credit card available to use if I need it.

@shepd: ummm, i've been to southeast asia many times. they do NOT accept visa or mastercard there. many, many, many, many places accept amex.

Sucks. I remember the mailers I'd get for the platinum card a few years ago, and they make an interesting juxtaposition to this story.

From the ad: "Imagine being in New Orleans, and having an AMEX concierge whisk you away to ride on a float in a Mardi Gras parade. Or when in Miami, being invited on an impromptu deep sea fishing trip".

Sounds like the OP would like an AMEX concierge to "whisk" him back home, as it were. Best of luck.

I've recently grown to hate American Express. I've had several different cards with them over the past 10 or so years.

I had a Amex Blue card with a 10K credit limit and never carried a balance. After a so called financial review they cut the credit line to $500. So I called and canceled the card. I didn't think too much about it, as I had been reading that they were pulling this crap on a lot of people.

A few weeks later, I tried to make an $800 purchase with my Amex Platinum card. They told the merchant to call in. I said screw that and wrote a check. When I called to find out why the charge wasn't approved they said it was "outside of my normal spending pattern." I've charged 10k plus at one time in the past, so $800 didn't seem that strange to me.

I then got a letter stating that I could no longer carry a balance on the Platinum card... oh, and I needed to cough up my $450 membership renewal fee. I typically didn't carry a balance, but did have a $2000 balance on the card at the time.

I paid off the card, and called to cancel. The CSR was polite and apologetic and I wasn't rude, I just told her that it was pretty clear American Express no longer wanted me as a customer. I've never missed a payment or been late.

I really hope that people cancel their cards, or tons of people default on their card agreements.

I guess in reality they did me a favor. WTF was I thinking using a card with a $450 annual fee?

F%$k American Express.

@shepd: The point is that as a charge card (as opposed to a credit card), one would never have to worry about having to go through what the OP did. At least until now.

We have an Amex Blue that we used to use for everthing and then paid it off at the end of every month.

I say used to because last month they slashed our limit without notice from 15K to 2500, rendering it pretty much useless.

A call to Amex discovered that they didn't like that we have a new mortgage, no matter that our term went from 30 to 15 years and our payment went DOWN.

We're paying it off and letting it sit. They've lost our business.

I'm glad we are in a position to pay it off. The drastic cut in limit slammed our scores.

@B: Some cards have limits, others don't. Blue cards have limits...Green, Platinum, Gold, Centurion, etc. do not.

I had the same thing happen to me. I've never been late, I have four different accounts with them and while I was in DC on business they CLAIM they called my business number - on a Saturday night - to tell me not to use my card. They even declined a purchase for $190 - less than half the yearly fee I paid (past tense) for the card. I called them and they explained that I needed to pay the not yet due balance 10 days early and I could use the card again. I told them I had a better idea: I'll pay all that I owe and you will refund the yearly fee immediately. They agreed to the deal and now I thankfully don't have to wonder if the card in my wallet is as worthless as that Platinum mess was. Hope to see you on the dead list soon AmEx. Couldn't happen to a nicer *ahem* "bank."

THEY DID THIS TO ME TOO IN 2006, I got approved for a card with a $7,000 limit, they sent me the card, let me use it, and even completed a $4,000 balance transfer, after this they shut my card off and said they couldn't verify my identity! If you don't know who I am, then why did you send me a card AMEX??? And if you don't know who I am I guess *I* am not responsible for the bill RIGHT AMEX? Nope, they sent me to collections when I protested and did not pay... hmm You don't know if it's me or not until it comes time to pay the bill.. very interesting AMEX!

Amex applies to become a bank and get a piece of bail out pie.
Amex starts randomly cutting people's limits with no warning and no logical patterns.
Amex starts demanding people pay up early.

Amex is going under. Somewhere in this nonsense is a plan someone dreamed up to mitigate their losses. I do have to wonder if the Wall Street mess had a larger impact on them than other card companies. Maybe too many of their high end clientele now have no money to pay their bills? Maybe they were heavily invested in some of the junk that was posing as investments?

@shepd: AMEX has some exceptional rewards programs, including some of the best cashback options in the business.

Also - not all AMEX cards have annual fees.

AMEX was consistently a bad experience from start to finish...

First, I had to have my employer provide income verification on a signed statement with proof of address, social security card, and driver's license.

Second, I got a F/R 5 days after getting the card. Eventually passed after 10 days of waiting.

Third, a few months later I got a call from the fraud dept that wanted my Notarized DL/SSN/Proof of Address "for my protection." What's great about this last one is that the day I sent all of this in, the credit department closed my account anyway. Read www.creditboards.com if you really want to hear horror stories. I get there's a credit crunch, but alot of things that AMEX has done defies logic, though I guess my $100 a month, pay in full charges were too much for them to handle.

@dialing_wand: On the other hand, I can see that if they genuinely believe someone is a credit risk why they wouldn't want to give a warning. Someone might try to rack up as much debt as possible if they knew the cut was coming. So I don't think that part is inherently ridiculous, but I do think it's ridiculous to do this for no reason to long-term customers who have perfect credit.

@rpm773: Except that this has always been par for the course with Amex. They are probably just doing it to more people right now due to the recession and credit crunch.

Amex did NOT randomly cancel the guy, Amex targeted potential dead beats and the guy caught in the chum line.

Does anybody wonder why the majority of small businesses will not accept Amex... could it be as small business owners they are well aware of the conduct of Amex and will do everything they can to avoid the company?

@Trick:

Yep.

The same thing happened to me.

Have been a good customer for a dozen years. Had no balance currently on any of my cards with them. Suddenly get 3 letters on the same day in the mail. One asking for additional information. The other 2 informing me that since I never responded to the letter, they were cancelling all my cards. I call up customer support to find out what just happened and right away get India. Obviously no help. They transfer me back to the US, but of course, they dont pick up the phone. I have to keep trying to call them. Finally I get someone in the US and they tell me I am cut off because I never responded to their letter (even though they sent me all 3 letters at the same time), no options and I need to reapply.

That is ridiculous. I ask to speak to a supervisor, they transfer me to a voicemail. At leats I get the supervisore extension and keep calling her back. Finally get her on the line and she tells me that there is a reconsideration procedure but it will probably not make a difference. I ask for her supervisor. She transfers me to a voicemail. Once again, I got the extension and followed up. Spoke to the supervisors supervisor and was told that if I submit the IRS paperwork to them, they will reinstate my cards. I agree. I am waiting to see if they be true to their word.

Honestly by this point I am ready to chuck AMEX and go to the other cards only. What happened to the vaunted customer support that AMEX claims. So far they have treated me rudely and not once have they apologized for putting me through this bother.

The funny thing is that just yesterday I got another invitation to sign up for the Gold American Express.

@Oleg Rabinovich: I kept getting offers for a green card if I wanted it. :)

@InfiniTrent: Please see my comment above. They do have limits, just not "preset" limits.

Your unadvertised limit is based on AMEX's (or here the AMEX Bank of Canada's) opinion of your financial ability. So while it is more fluid than a hard and fast limit (it can go up as your spending on the card increases over time). However try to jump up in spending by a large amount and you'll get asked to provide statements which support your ability to pay back those sums.

As a charge card you have the balance in full and so your financial situation is of more importance (though I don't believe it should be less so in regards to real "credit" cars.)

For optimal use with AMEX , it is important you have the correct card product. If you are making business purchases, you should be using OPEN Business card. Do not use personal card for business purchases. Also, AMEX is a charge card. Not a credit/revolve card like MC or VISA. Risk perimeters are different. If your company's financials (or t/r) are strong, AMEX OPEN will offer higher credit line. MC and Visa cannot compete with AMEX OPEN unsecured credit lines.

@johnva: Good point. I hadn't actually thought of it that way.

I'm awestruck by the number of people who have gotten stranded or otherwise screwed by Amex. The exact same thing happened to me about a month ago. I was en route to Chicago when my card was declined at a freaking McDonald's. I looked like a fool standing in front of the cash register.

I called and they told me that they didn't like that I'd taken out a car loan, so they cancelled the account because I wasn't a good risk any more. They certainly understood that I'd never paid late and had been a good customer, but that didn't matter. In fact, the previous day, I got the "your statement is ready" email on my phone, and made a payment right then and there. The rep saw this and said it changed nothing.

Don't waste your money on American Express. They ruined my vacation.