Cancel Amex, Get $300

Wow. American Express must be getting desperate. In a bid to RID itself of customers, Amex will give you a $300 prepaid credit card if you cancel your account. According to CreditMattersBlog, it is offering the deal under the guise of enabling customers to "simplify" their finances.

For more news on American Express, check out this page on Consumerist.

And here is some more information on Amex.

Comments

[skatscan]

And the turnip continues to get squeezed.

[aaron1948]

It's time for some investigative journalism about what AMEX is up to.

I've paid my monthly AMEX bill consistently for 2 decades+ . . .

BUT, last month, AMEX made me pay the monthly amount due ($340) 2 weeks before the due date -- or else they planned to temporarily stop my charge privileges. DID MY $340 help their cash flow problems?

This month they are calling me about 5-10 times a day. I'm not answering and returning calls.

The reason for this intimidation?
- Do they want early payment again?
- Or are they planning to cancel my credit card?
- Perhaps because of $2000 in charges that I am paying off contractually over time under their "pay bills over time" program.
- Or perhaps it's about my credit report -- currently is a bit rocky because of major medical costs stemming from a major medical error.

WHATEVER -- they have gotten their money every month. And will continue to get it.

Small potatoes!

Is is time to organize against this imtimidation? Other stories?

[BassMent]

Every credit card contract comes with a "Terms and Conditions" document, that's usually printed in the tiniest font imaginable. Most customers don't read them (not accusing you, Aaron, just making a general statement... I have not read them closely myself until recently). It turns out that there are almost always blanket statements in these terms that allow the credit issuer to change the rules any way they want at any time they want, including upping interest rates and altering payment schedules and minimum payments. It's the CONSUMER who is obligated to the terms and conditions... the creditor can get away with anything.

Your strategy of avoiding their calls is a good one, because the people they train to make these calls are pretty good at intimidating customers. If they do make a change in your payment schedule, one thing they ARE obligated by law to do is notify you in writing. So until you get a letter, you should stick to your position.

[RomeoinFl]

I have Amex because they force you to pay everything at the end of the month, so I accrue no interest and I don't buy stuff I cannot afford. I use them instead of my debit card because of the rewards and I haven't paid for an airline ticket in years.

The problem we Americans have is we constantly buy things we have no business buying (except for needs/emergency). We buy stuff and then the following month wonder how we are going to pay for it.

[PoliticalRockChick]

Don't your credit score get effected when you cancel a credit card?

[RomeoinFl]

I think if you cancel yourself it doesn't affect it. If the CC company does it, your score is dropped.

[quiviran]

Yes. One of the elements of the calculation is percentage of available credit used. Say you have two credit cards, each with a $10,000 limit, $20,000 total. On one of the cards you have a $5,000 balance, the other, zero. With both cards active, you are using 25% of your total available credit ($5,000 divided by $20,000). If you cancel the one with a zero balance that leaves you with $10.000 total available credit. Since you owe $5,000, that means you are using 50% of your total available credit, which will result in a lower credit score. Sounds goofy, but it is true.

[Repub4Obama]

Don't forget about longevity as well. let's say you have two cards, a car loan and a mortgage. You've had the cards for 15 years, the car loan for one year, and the home for 6 years. Under this, your "average duration" for your credit lines is 111 months. If you cancel a card, your average length of credit will drop to 88 months, giving you less history, and lowering your score.

If you have a Sears card that you have had for decades but never use, it's going to really hurt your score when you cancel it. It's better to go buy a hammer or some jeans once every few months and keep the little card happy and in force.

[Yaaawn]

I have a Home Depot credit card and they arbitrarily raised my interest rate to 25.99 for no reason. I called them and asked them why they raised the rate. They told me they had the right to raise it for no reason and it was the price of doing business. I told them I had a history of solid payments on time and I would not accept it. I told her I wanted to know the actual reason for it and she could not tell me. I asked for supervisor and she told me the same thing and told me I could get a discount on deferred purchases instead. I flately refused and demanded the return of my old rate. She declined. She told me it was the price of doing business went up. I quickly responded to her comment, two thirds of my payment is making you money, isn't that good enough for you? She got silent on the other end and decided to reduce my rate back to what it was. Moral of the Story: Talk to a supervisor and don't back down ever. Demand it.

[RyanCagey]

Yes. They are quite desperate. I recently found another great site that has insider information about the credit card industry, and it has, I think, the best explanation of how to complain about these guys doing this. I used the payoff calculator there too and it ruined my day...

GREAT RESOURCE:

www.NewCreditRules.com

[coloconsumer]

I was a loyal AMEX customer for 5+ years that never missed a payment and paid off the bill each month. Something shows up on credit report that is totally unrelated to them and they shut me down cold! Forget a $300 debit card, it would have been nice to have some advance notice before charges started getting declined. All I can say is long live Visa and MasterCard! I will never use their card again and hope the entire company goes belly up.

[steveinohio]

This is a pretty smart move to purge lower income and financially impetuous cardholders. The more money you have, the less likely a $300 buyout is to entice you to go to the trouble of canceling a card.

[MTrust]

I hope lots of AMEX employees lose their jobs. I hate that company with a passion! They suck monkey balls!

[ICanHasDemocracy]

AMEX was once a sound prospect- don't pay for it if you don't have the cash next month to cover it. Credit cards became free money cards in teh late 80's early 90's when they started going after college kids with no econoomic discipline-"build credit"- how, when most college kids I knew were buying consumables and not hard goods. So that 10 bucks on pizza becomes 12 bucks the next month.
I laugh when I see people use cc's at the grocery store. Debit cards are the way to go.

[ForObamaInDallas]

Love your moniker, ICanHasDemocracy. :)

Believe it or not, even some people can't handle debit cards. I use a debit card with a mastercard logo so it "works" sort of like a credit card. I just found out that a friend can't even handle *that.* She's pissed that her bank "let's her" overdraw her account. I'm thinking, why can't she keep track of her spending?

So now she's using a pre-paid Visa card. When it's empty, she gets a denied notice.

[carallen]

Don't always laugh, I have a Chase debit/credit card that I choose "credit" so I can earn points. It comes out of my account like a debit but at least it also earns something.

[steveinohio]

If you have the discipline to handle it, a credit card with a rewards program is the BEST way to go. I get a check for $100 or so every several months from my credit card rewards program and I have yet to pay a dime in exchange for the privilege. If you want to guard against the potential to spend more than you have, cash is the only way to go.

[koyaanisqatsi57]

Uh-Uh! Cash is the way to go for day-to-day stuff like gas, groceries. Hit the bank every two weeks for a withdrawal of $200 and live with it. The reward is the money you save.

[HappyMarsden]

Why that sounds great! I can cancel my Amex card and get a whopping $300 bucks! Hey wait. I can get a hell of a lot more off Amex if I don't cancel the card and just get cash advances off it instead. Phew! Good thing I wasn't high this time, when they mentioned it.

[aege8th]

is this offer good only if you owe them money? Cause I have a few Amex cards with nothing owed. Wouldn't THAT be fun, to get $300 for canceling THOSE!?

[schatsie]

But closing them would screw up your credit score.... see Suze Orman about that...funny that the reporter does not mention that....

[steveinohio]

Closing a credit card isn't always bad for your credit score, and even if it is, if it prevents you from digging yourself into a hole then you have saved yourself tons more in money AND credit score. It's much easier to make up for a canceled card in your score than lots of debt. Do people still listen to Suze Orman? I can't believe she hasn't gone the way of Beanie Babies, Pogs, and Pet Rocks.

[vwoom]

Yeah right..in exchange to closing a $10k Amex/Costco credit line (with an $89 balance) and ruining your credit score in the process, a $300 gift card?!

No thanks Amex, you can keep your $300...

[katielady]

Amex hasn't given this piece of news to Costco yet... Yesterday they were still shilling for customers to sign up for an AMex business card.. hmmmmm Vewy Swewy! or Rut Row!

[MrHacks]

1. Cancel Amex, screw up your credit.
2. ????
3. Profit.

Nice try. But you would have to had sustained a major head injury to fall for this trick.

[jsgaetano]

This doesn't seem so bad.

It's basically AMEX saying "pay off your debt, we'll give you a $300 break on what you owe". That's a much better deal than everyone else is offering... which is nothing.

[Star2000dancer]

I will never get another creditr card until they pay me to use it.

[mamacat]

Discover Card and Amex can both be set up so that they pay one to use them.

Where do I sign up to sell back my credit cards? For $300 each, I could make a nice little profit.

[Telemachus]

Can I get $400 if I don't even apply? Think of all the processing and paperwork they won't have to do!