Complaint Review: AMERICAN EXPRESS

My rate was increased to 27% Aug 17, 2009
I believe the law on rate increases take effect Aug 20, 2009.

I'm going to see my Senator today.



http://www.whitehouse.gov/the_press_office/Fact-Sheet-Reforms-to-Protect-American-Credit-Card-Holders/

Key Elements of the Credit  CARD Act of 2009

Bans Unfair Rate Increases: Financial institutions will no longer raise rates unfairly, and consumers will have confidence that the interest rates on their existing balances will not be hiked. 

• Bans Retroactive Rate Increases: Bans rate increases on existing balances due to "any time, any reason" or "universal default" and severely restricts retroactive rate increases due to late payment.
• First Year Protection: Contract terms must be clearly spelled out and stable for the entirety of the first year.  Firms may continue to offer promotional rates with new accounts or during the life of an account, but these rates must be clearly disclosed and last at least 6 months.

In response to the new regulations which will soon take effect, AmEx is basically eliminating over-limit fees, even as the regulations do not require them to do so. This is a definite plus for consumers, but it's really more of a token gesture aimed at receiving some good press than anything else.

To make up for the lost revenue stream from over-limit fees, they are tweaking other aspects of their consumer agreements. I'm not sure how reducing a credit line increases revenue, but there must be some ecnomic reason for doing so.

Sometimes it's nice to be a fella like me. My credit's always been in the tank, and I can't even get a Capitol One card nowadays, so I really don't have to worry about all of this greed and nonsense.

Best regards!

NOT TOO LONG AFTER THEY RAISED HER RATE GM WENT BANKRUPT, DIDN'T THEY?

Expecting that a credit limit or an interest rate will stay the same on a credit card, flies in the face of the whole concept of revolving credit lines. Every card agreement specifically states that. What exactly do you want Congress to do? If they force card issuers to never adjust credit limits due to market forces, the industry as you know it would go away. If you were fortunate enough to qualify for a card at all, chances are good that the limit would be tiny. On one hand, you recognize that the company needs to reexamine its credit lines and reduce risk in the current climate. On the other hand, you just don't want it to affect you. Sorry, but the credit climate in this country has changed drastically in the last year. You're going to have to change along with it.

Credit card companies are facing the worst crisis of their existence and all of them are decreasing the amount of credit being extended to people.  The fact it affects your FICO score should not be a sign that your FICO score is being decreased, but that your score was artificially inflated.  Accordingly, it is now being brought back to a more appropriate level.

Nobody in Congress is going to help people in this because they're looking to the credit card companies to reduce their liability; they don't want to bail out credit card companies the same way they bailed out banks.  The fat times for all of us are over and we need to face the reality that everyone's FICO score was inflated.

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