AmEx Pays Some $300 To Zero Their Balance And Leave

American Express is so desperate to clean liabilities off its balance sheet that it’s paying some customer $300 if they will pay off their balance in full and close their credit card. The offer is only good if you get a card in the mail from them about it with a 14-digit RSVP code. Thanks for playing, don’t let the door hit your ass on the way out.

American Express Wants To Help You ‘Simplify Your Finances’ — Will Pay You $300 If You’ll Close Your Account [CreditMattersBlog] (Photo: nicubunu)
UPDATE: Internal AmEx Doc On $300 Bribe To Zero Account And Leave Program

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  1. tc4b says:

    Exactly what type of customer does this probably apply to? The responsible ones that supposedly make very little money for the cc company, or the deadbeats? Which group is dead wood?

  2. albear says:

    AMEX only has the top CC customers, You never have any carryover balance with them. The card has to be paid in full every month.

    Could they be having a rash of late customers? very strange.

    • I_am_Awesome says:

      @albear:
      You’re referring to their charge cards. They have credit cards now too.

    • VidaBlueBalls says:

      @albear: that’s incredibly false. Once upon a time AX was that way but now has so many programs including branches for business, small businesses, affinity (Hilton, JetBlue, Red etc), Blue (which is their signature ‘pay-over-time’ card) and on and on that they really are no different than most other card companies other than their customer service reputation and their traveler’s checks.

      • winner says:

        @VidaBlueBalls: It’s not entirely false; none of the other major credit card companies (Visa, MC, Discover) have charge cards. Further, last I knew, AMEX used a different method of gaining information on potential customers. I don’t believe they use the standard credit reporting agencies. American Express also tends to be the card of choice for corporations so they actually do have a significantly higher-end customer who generally does not default. They are not running into trouble with their charge card customers but with their credit card customers.

        • Eyebrows McGee (now with double the baby!) says:

          @winner: “Further, last I knew, AMEX used a different method of gaining information on potential customers. I don’t believe they use the standard credit reporting agencies”

          Whatever they use, I’m pretty sure they based my limit of my existing credit card when I applied — it was exactly $2,000 higher than the existing card, and an oddly non-round number (like $14,620 or whatever).

        • Anonymous says:

          @winner: last I knew, AMEX used a different method of gaining information on potential customers. I don’t believe they use the standard credit reporting agencies.
          When I recently pulled my Experian credit report, I saw multiple inquiries from two credit card companies which I do not currently use, but who regularly send me “pre-approved” offers: Discover, and American Express.

          The AMEX offers I get are for their regular credit card, with a crazy $125 annual fee.

    • _catlike_ says:

      @albear: AMEX also has traditional credit cards (Blue, Blue Cash, Costco AMEX, etc.).

  3. moore850 says:

    The ongoing debt is probably screwing with their insanely large float that earns them so much profit. I would assume that many other creditors, banks, etc may do this same thing to get rid of unreliable debtors.

  4. RandomHookup says:

    I usually only get that kind of offer from my former girlfriends.

  5. sleze69 says:

    I have to say that this is actually a pretty good thing. They could just close the cards.

    AMEX gets a kudos in my book.

    • csyria says:

      @sleze69: I wonder if that’ll happen if not enough people take the $300 offer. “Yes, we did offer you $300 to close your account before. No, you can’t get $300 since we closed your account for you.”

      • squikysquiken says:

        @csyria: From the source article: “Note also that in order to get the $300 prepaid card the customer MUST pay off his or her entire balance by April 30, 2009. If the balance is not paid off by April 30, then you will not receive the $300 card. But your card will still get closed.”

        Amex is not “offering $300 to close their account to selected people”. They are closing accounts and telling you: if you pay it off in 2 months, we’ll give you $300.

  6. GuinevereRucker says:

    I would LOVE a credit card that forbid you from carrying a balance. I pay my card off in full every month, but I have to remember to make the payment. It would be great if you could “auto-pay” like you can on other bills. The higher-tier cards from AmEx have this feature, but they come with a stiff annual fee. I have the blue cash one, it doesn’t have this feature.

    Of course this would mean that the credit card companies can’t extort people with 25% usury. There have been times in history where charging interest was considered a crime by most people. The more I see the bad effects of debt, loans, and exorbitant interest, I’m starting to agree with this policy.

    • sleze69 says:

      @GuinevereRucker: Check online again. I have a Blue Cash card and it definately allows the full payoff automatically. This is a relatively recent event (maybe 3 or 4 months old).

      • GuinevereRucker says:

        @sleze69: Oooh neat! I will check that. I might have passed on it the first time because I didn’t like giving them my bank account information…

    • Jim Topoleski says:

      @GuinevereRucker: weird both my chase and discover card allow for pay in full automatically.

    • JustThatGuy3 says:

      @GuinevereRucker:

      Criminalizing the charging of interest is associated with stagnant, repressive societies with low standards of living (see the Dark Ages).

      • GuinevereRucker says:

        @JustThatGuy3: I don’t know much about this stuff, but do you agree? Don’t you think that maybe we’ve gone too far in the other direction? 5% interest on a mortgage is one thing (although even that is a pain over 30 years). Encouraging irresponsible college kids to become perpetually enslaved by debt is quite another.

        I just find it odd that my country is the wealthiest in the world, and yet the average person is up to their neck in debt. Charging interest seems benign, but we have become a society addicted to spending money we don’t have.

      • hhole says:

        @JustThatGuy3: What does that make American law? RICO statues criminalize the charging of interest and most states have similar laws in place as well.

        The choice is to call it loan sharking instead of, say, payday lending. And, many states are beginning to limit the activities of so-called Community Banks as well.

    • rpm773 says:

      @GuinevereRucker: Read up on Islamic banking law. Maybe it has a checking, savings and credit card account to fit your on-the-go lifestyle!

      • hhole says:

        @rpm773: Actually, there are several US based Islamic banks that offer just such services. They’re quite stable and liquid as their cap rates are far higher than US banks.

        BTW, most Islamic banks make money by investing jointly with customers in business or personal projects and sharing of the profits (merdabah in Arabic). Historically they make far more money than any Western style bank but they are a very small portion of the world banking system (but growing). In Indonesia most consulates and Western businesses place their money in the Islamic banks because they get solid returns.

        Sounds a bit better than making money through a fixed return over a fixed period of time (interest), ATM fees, bounced check fees and all the other fees a bank can throw together on a whim.

        If you are interested in a truly fair mortgage you should Google “guidance financial” and get a 101 refresher course. When I bought my first home with an Islamic loan I had my lawyer look over the contract. He was so impressed with the partnership idea he bought his next house with the same company. No religious requirement needed or expected. It’s just a monetary transaction.

        Oh, yes, I do have an on-the-go lifestyle!

    • KStrike155 says:

      @GuinevereRucker: You don’t have to pay off their cards in full each month. They have normal credit cards, too.

  7. wdcr0ck says:

    Between them lowering credit limits on most of their consumers and paying others to “go away”, AmEx is completely destroying their brand name. It’s a bit sad. Glad I dumped their stock last year. RIP AmEx.

    • rpm773 says:

      @wdcr0ck: I don’t know about all that. I don’t think any bad PR stemming from this move translates into lost business. The only people upset are the higher risk accounts who were closed or clipped.

      If anything, cutting out the rot and reducing risk makes them stronger.

    • winner says:

      @wdcr0ck: They’re trying to get out of the credit card business (where they really don’t belong) and returning to their roots in the charge card business – where the customers rarely default on their accounts.

    • XTC46 says:

      @wdcr0ck: I disagree. I see a company getting rid of bad customers, and I think that is a good move. I dont have an AMEX card currently, but may apply for one once this mess is over.

      One of the hardest decisions for companies to make, especially in tough times, is to get rid of customers. Many feel that any customer is a good customer, and that is just not the case. Many arent worth the trouble, so I say dump them.

      Good for AMEX.

  8. racordes says:

    Dammit! I just paid them off last month.

  9. ADismalScience says:

    Ah, deleveraging.

    I suppose it’s about time that AmEx regained some brand exclusivity as well! I imagine this is reaping student accounts, Blue cards, etc. Long overdue – a return to higher credit standards will create a much more viable long-term business. There will be short-term profit pressure, but a lot of that profit is just risk waiting to explode in their face.

  10. G_Money21 says:

    I imagine this would apply to anyone with a large limit that rarely uses the card or makes very small purchaes and pays the balance the following statement.

    • mmmsoap says:

      @G_Money21: The good news about this downturn is that it’s making everyone, especially consumers, aware of how bad living on credit can be. I think a lot of people are really taking a look at whether they’re living above or at their means right now.

      On the other hand, given unemployment, a lot of people may be turning to credit to get them through. It’s a common first-level safety net, for people to run up their credit cards just trying to make ends meet if they lose a job. I have a feeling that those people are AmEx’s nightmare.

  11. t-r0y says:

    What the

  12. digitalgimpus says:

    If I were an AmEx cardholder offered this, I’d refuse and promise to leave the balance _unless_ they paid out more and helped with that pesky interest.

    It’s called negotiation.

    • m4ximusprim3 says:

      @digitalgimpus: At which point they just say no money and close your account anyway. Which, if you read, is what happens after the april 30th deadline.

      I’m not saying it’s bad to try to negotiate, I’m just saying in this case they’d probably just step on you.

  13. redxmagnum says:

    And yet 8 out of every 10 pages I visit has an Amex ad on it, urging you to apply for this card or that card.

  14. SexCpotatoes says:

    How much would they pay me NOT to open an account?

  15. deadspork says:

    These accounts are probably carrying a lot of debt and only making minimum payments – maybe at a low, locked-in interest rate, and AMEX is trying to generate funds coming into the bank. Here, we’ll give you $300 if you pay off that ridiculous $15k balance that you only pay $300/mo. on and have been paying on for 10 years and will never, ever pay off.

    It makes sense, otherwise why would they offer money? They can close your account at any time. But they don’t want to just close it, they want their money back.

  16. Cat_In_A_Hat says:

    I ain’t leavin’, I ain’t fraid of no credi card balance…

  17. Chris Hatcher says:

    It could also be customers who are at a high risk of defaulting… getting them to pay off a $2 or $3k loan and sacrificing $300 is better then losing out on that money entirely (or the 50%that collections will take)