I wonder if I go to the bookstore and buy "bankruptcy for dummies" with a credit card, if they will cancel me also?

my money is on "Geisha House" sounds seedy

I'm guessing Wal-Mart. Retardedly.

AmEx cut the sh*t out of my limit too. Commonalities in our shopping patterns are as follows:

Amazon
Cheesecake Factory
Five Guys (DC, VA)

That's it. I went from 20k, to 6k. No late payments, no explanation. I even went to executive customer service and unsurprisingly they are incredibly busy and proceeded to do NOTHING for me.

I'm guessing all that fast-food crap you've been eating.

If this becomes a trend and the credit unions start to take "behavioral scores" to figure out your score, I'm... Well, I don't know what I'd do. But this turning out to be so damn ridiculous. I just love how it's the people that are trying to do everything right in how we manage our finances and it's us that get screwed. Lovely. Really.

And before anyone says, "You should just pay it off all at once," most of you should realize that sometimes (especially now), people's money is not so cut and dry.

I thought the reasons given were not the establishment itself, but the statistics about the other credit card users at that establishment. Basically if you shop st stores in lower income areas where there are higher instances of unpaid bills, you will get associated with the other people's bad habits. And they will drop your credit limit.

AMEX cut my limit and I raised hell with them and reminded them if they treat customers that have paid their bills on time and in full every moth for six years like that, then they would be without one customer.

My credit limit was returned.

I could hazard a guess at which stores, but I think it's much more likely that they have a machine learning algorithm that identified some possibly inconceivable subset of these purchases, amongst other factors, that suggest with adequate accuracy his risk as high. Machine learning isn't perfect, but it is often pretty amazing at certain tasks like these; in an ML intro class I attended a simple algorithm significantly outperformed all but one person in the room. Honestly, as he is a 29 year old self-employed business man, I'd say the algorithm was spot on. Sucks on the micro level, but macro wise somewhere down the road we'll all be happy that AMEX isn't pulling a Bear Stearns.

@Corporate_guy:

So its like some serious big brother sh..fing pathetic. I'm not a part of this per say since they actually usually owe me money but I can see how irrelevant that is. You make one mistake, your part of their buffet.

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Then we bail them out...

I'm going to guess ServPro and LeBlanc Plumbing. If they figured your home needs a bunch of costly repairs coming up, they decided to cut your limit so whatever charges are to come wouldn't be on their card.

@M3wThr33: That was my guess, too. For no valid reason.

I think it would be interesting to see the locations, too, as this I recall sometimes counts in the scoring.

@hypnotik_jello: I believe Geisha House is a high end restaurant in Hollywood (part of the Dolce group of restaurants) partially owned by Ashton Kutcher.

@kathyl: That's a bunch of crap though. If you think hard enough, you could find a reason any purchase could be risky. Maybe someone just has some extra money and wants to do some home improvement? Seriously, I could look at my credit card statements and every charge on there, and figure out a possible far fetched scenario that could indicate I may be in financial trouble.

For example, I recently booked plane tickets to London and Berlin, hotels in both cities, and train tickets within Germany to go to Wolfsburg from Berlin, using my Chase Visa. Yeah, you could theorize that I'm going to run up a bunch of charges, hop on a plane, go to Europe, assume a new identity, start a new life over there and never pay my credit card again. Or, I dunno, maybe I'm just going on vacation? Fortunately, Chase hasn't suspected a thing and they've never lowered my limit. I'd hate to think what AMEX would do with those purchases.

I'm thinking Walmart* or McDonalds, myself.

My credit limit was dropped from 10k to 8k and I called in about the change. Only been a cardholer for a year with them, but said that if my credit limit wasn't raised back, I would no longer be a customer. They restored the limit.

Is he taking into account also where the stores were located? Just like insurances will change your rate based on whether there have been instances of car thefts or things like that, I would think the banks could cross-reference that type of information with where you swiped.

@lauy: Yeah, my guess is it's based more on geographic location than actual establishment.

The "pattern" looks pretty obvious to me: The majority of the establishments where Johnson used his card were "low-end" places: fast food joints, gas stations, Wal*Marts.

I'm sure if Johnson had a few more dinners at "The Four Seasons," on there, a few diamond jewelry purchases, and maybe a trip to Paris, first-class via Air France, with a month-long stay at a four-star hotel, he'd be offered a Platinum card.

@deep.thought: Except that in this case, the algorithm is screwing over an actual person who hasn't done anything but behave responsibly. Whatever method they're using may be accurate in predicting average or aggregate behavior of a large group, but part of their job is also to provide a service to actual, individual customers, and in this instance, the customer is getting shafted through no fault of his own.

I got my limit cut as well, a pretty large amount. I can tell you that I dont shop at any of those places.
I did however, put half of my wedding on the AMEX, which was back in November. They cut my limit to the balance. A DJ and a bed and breakfast (reception and rooms). Not like I am a high roller...
I stopped using my card for the most part before November.

@hals000: PLEASE contact the ABC consumer reporter (and those at GMA who covered Kevin Johnson) with your information. I think, as consumers, there's a BIG story to be developed.

ABC story link: [abcnews.go.com]

@ameyer: Or I suppose they could be hiding behind their "proprietary scoring model" and cutting everyone, I suppose.

It makes me wonder. I looked through my AMEX statements for the past six months (we don't use it much!) and it was an optician, and... oh, crap. I used it for $20 at Payless Shoes. Once. About six months ago, there was a hotel charge and a sizeable car repair charge (almost $800).

Also: I received a Platinum Card invite the same day they cut my rate. I hate you right now, AMEX.

@copious28:

The wedding.

It's gotta be Five Guys... I bet Amex doesn't like delicious burgers... Or maybe they are anti-potato?

Well, he spent money at a Honda dealership, and at Zales (jewelry store). Maybe he went over his limit?

"Donor Town Square" is an online fundraising site. I don't know what he did there.

I couldn't find out what "Island Romance" meant, and I'm not sure what the "Opera" charge is for.

Is this list complete? There aren't any grocery stores on the list - unless you count Wal-Mart, but I wouldn't do 100% of my shopping there.

The only thing I can think of is perhaps they thought he was taking to many vacations; irregardless its ridiculous.

I think it'll be easier to think of all the places that won't get your American Express card CLD'ed.

Just about anything is reason enough for these guys to pull stunts on you.

Scary, we have about 80% common places, just different locales.

i bought 1 thing on my ammex last year. a 52xbr6, which promptly dropped my limited 5grand.

bought it from sony online.

@cozynite: then don't spend what you can't pay back

@triscuitbiscuit: perhaps they are allergic to peanuts?

Seriously, take a look at the list. It reflects everything: food, water, shelter, transportation, maintenance, entertaiment.

Everything.

The risk of consumer default is highest if the consumer is having to charge EVERYTHING every month of the year.

The scoring system does not just evaluate the vendors but also includes the buying pattern/sequence of charges.

And this customer charges EVERYTHING.

Of course, eventually, the consumer is going to charge amounts and vendor combinations which reflect poorly upon the consumer.

Paying cash from time to time is not a bad thing. Using a different card from time to time is not a bad thing either. It shows the CC company that you can do without them. Important concept. The CC company must be confident in your ability to make purchases without using their card. But this consumer demonstrates a need for the CC. Maybe a need far beyond the norm. Such need also reflects the potential for default.

Maybe you shouldn't be focusing on the names of the businesses so much as the locations. Were these low- or high-class areas? High crime rate? Lots of minorities? Anything else that could easily be mined from census data and correlated with where the cards are being swiped?

Zales. Definitely Zales. What kind of bum buys diamonds.

AmEx, like the buying public who use their service, is being exceedingly cautious these days (read: paranoid). Aside from a possible credit score hit, I don't care if they cut my credit limit in half. I never go beyond 25% of my limit, and I pay it off monthly.

I think this is a preemptive strike against people who (they feel) might be tempted to start charging their mortgage payments to the card.

@hals000: Five Guys as in Five Guys Burgers and Fries? They just put one of those up by my work and I made the mistake of eating there. Don't get me wrong it was a good burger, but ughhh... I felt sick afterwards.

As for your situation, that blows.

@3eyes: I think a likely scenario for spending what you don't have would be for an emergency.

anyone that eats at Geisha House obviously does not value their money.

especially when you're eating at McDonald's the next day.

that's a dead sign of "living tall".

@ranchgal: This has been going on for years. It has seen some attention in the media. Nothing much is going to happen about it and a consumer reporter service isn't going to find much worthwhile in investigating this. AmEx usually drops limits because people carry balances or have a large debt-to-income ratio as a risk reduction measure.

We may not like it but they're well within their right to do it.

"Chateau Elan Winery" - Clearly he's a desperate alcoholic living dollar to dollar.

@ajlei: It's always good to have emergency funds just in case, but I do agree that certain emergencies necessitate the use of spending beyond ones means. However, it should be so dire that one can cut back in the future to repay that debt.

hey amex - redlining much?

@Corporate-Shill: i disagree. there are quite a few folks who use a credit card as a tool to manage their spending, budgeting (& sometimes reap rewards) by only using one card. then they cut one check a month to pay it off.

i don't see how a credit card company can consider that as more risky than sporadic or cyclical charges that aren't paid off immediately.

furthermore, the person that pays in full is giving the cc company insight into their income that otherwise wouldn't be available. if i charge & pay off $10,000 monthly, you can assume that i'm netting at least $120,000/year.

the concern for default should arise when either spending or paying habits change. if i start carrying a balance, reduce or increase my spending, that should signal risk of default. but saying that charging the same/similar purchases from month to month to month & paying them all off shows a higher risk of default? no way.

"Experts contacted by "GMA" -- including Manning -- say they believe banks may now be using data collected by customers to compare them to other shoppers at individual retail locations or by zip code, weeding out customers in neighborhoods hardest hit by the economic downturn."

I'm really convinced banks, credit card companies, etc are truly operating a racist scheme.

@magic8ball: And the larger part of their job is to stay profitable/in business, with the secondary result that all their customers can be serviced more or less. In the financial world, insight to aggregate behavior is far more valuable than the feelings of Kevin Johnson, unfortunate though it may be, for the simple reason that an aggregate model can be an excellent approximation of individual behavior and that the insight therein allows informed risk management. This is sincerely desirable for everyone and immediately applicable as inadequate risk evaluation was the catalyst that precipitated our current ugly economic environ.

If 5% of people are upset that their credit limit was cut, but all other credit limits are secured and the chance of economic depression significantly mediated, is it really a bad thing? It definitely reeks of some type of Orwellian thought crime, but at the very least considering the Patriot Act and NSA data mining program I believe that's a debate that is still very well alive.

@3eyes: I agree with the peanut theory.

@deep.thought: Not me. I wish that Amex *would* pull a Bear-Stearns. I wouldn't miss their pompous, self-important ads one little bit.