AMEX Blue Raises Rates, Also On Past Balances, And Won't Let You Opt-Out

Starting Oct 1, AMEX Blue is raising rates on all customers, INCLUDING on OLD balances, AND they are telling customers that you can’t just opt out and cancel the card (like normal). Turns out that opt-out we all took for granted was only by the credit card companies’ good graces.

-Standard APR is going from fixed rate 11.99% to Prime Rate plus 11.99%. Rate as of Aug 1, 15.24% (this is applies to new purchases AND ALL BALANCES PREVIOUS)
-APR for Cash Advances will be 21.99% plus prime.
-APR for Late Payment will be 23.99% plus prime.
-Late fees for less than $250 will be $19, greater than $39.

Here’s the AMEX letter:

Like all companies large and small, our pricing has to be responsive to the business and economic environment. As a result, we have found it necessary to increase rates and fees on some of our products. Below are the principal changes to your account:

o We are changing your APR on purchases from a fixed rate to a variable rate. (Prime Rate plus 11.99% = 15.24%)
o We are raising the APR on cash advances. (Prime Rate plus 21.99% = 25.24%)
o We are raising the APR on any balances that have a penalty rate. (Prime Rate plus 23.99% = 27.24%)
o We are increasing the late fee.

Reader Neil is miffed:

For a company whose stock price has doubled in the last six months and who has paid back its TARP money, this sure seems more like pure greed than any response to market conditions. Either that or they want to sneak some crap in before new regulations kick in. Anyway, since I have been a loyal customer for nine years, I think it may be time to do my own adjustment and bolt them. At least then their short-term shenanigans would result in them losing a long-term profitable customer.

So is Brian:

I have an AMEX Blue card and it’s always been my go card because it had a fixed interest rate of 7.9% on all purchases; not the best but it beats most. Earlier this year I got a letter from AMEX stating that due to a “hard economic environment” they were raising everyone’s interest rates by 3%. So my fixed 7.9% became my fixed 10.9%. It is no longer my go to card and I was looking into what my best options were to transfer and close out the account, but I was taking my sweet time about it. [Then] I just got a new letter in this week from AMEX… So in short, my AMEX Blue account went from a fixed 7.9% to a fixed 10.9% to a variable 15.24% this year, and at no time was I ever late on a payment or was ever assess a penalty. As you can imagine I’m no longer taking my time and weighing my options and I’m going to transfer my account this week.

Adam can deal with the rate hike, he just doesn’t like they’re tying his hands:

Just yesterday I got a notice in the mail stating they are raising my APR by 5% (applies to existing balance and new purchases) and was curious that no where on this notice does it mention the ability to opt-out. I did a Google search on this topic and was surprised to learn that the option to opt-out is a just privilege, one awarded by many credit card companies, but not American Express. A call and email to customer service confirmed this….I shouldn’t have any problem financially with this rate hike, but the prospect of future changes and not having any options at all doesn’t sit well with me.

The letter they sent also notifies customers that the card is dropping overlimit fees. As we previously reported, AMEX is dropping overlimit fees because it’s too expensive to get everyone’s permission for them, a requirement of the new CARD act. Tying the rate increase to the fees getting dropped is in line with the credit card companies moaning, “We will have to make up our ill-gotten gains somewhere!” in response to the consumer protections initiated by recent credit card reform.

PREVIOUSLY: AmEx, Discover Ditch Overlimit Fees
(Photo: www.samwilkinson.org)