Cheeky American Express, double the interest but a 5.4% credit in return.

I just got a call from American Express regarding my Blue for Business card. It seemed innocent at first. They said since I was such a loyal customer and since I’ve never missed a payment and have always paid more than the minimum (actually almost double the minimum) that they were going to give me a special offer. If I were to pay say $12,000 of my balance they’d give me $648, 5.4% towards my balance. Great incentive really considering I was planning on paying off my complete balance in June anyway.

But here’s the kicker. First they already dropped my credit limit from $22,000 to $15,400. The cheeky fuckers raised my interest rate from their supposed lowest possible rate 11.99% in Feb to more than double that. A hot rate of 27.22% in March.

So I’ve just been charged double the interest for the past two months and will be for this month and the next. Essentially they’re just crediting me my own bloody interest back. Seriously, WTF.

The real kicker here comes from using NewCreditRules.com’s Interest and Payoff Calculator. I normally pay about $750/mo towards my current balance of $13880.

Before:
Making payments of $750 on a balance of $13880 would take you 21 months to pay off with a 12% APR.
Total interest paid is $1546.20 ($15426.20 total paid).

After:
Making payments of $750 on a balance of $13880 would take you 25 months to pay off with a 27.2% APR.
Total interest paid is $4319.48 ($18199.48 total paid).

Some loyalty, the only reason why I’m paying anything right now is because I did a balance transfer from my two other cards to consolidate payments. I’ve been a customer for 7 years and am currently a share holder, not to mention my credit score of 823. Nice doing business with you too, asses.

UPDATE: It gets better. I just called to find out why my rates were doubled. It turns out they decided to put me to the default rates after I accidentally made a payment against my WaMu checking account which was closed a day prior. I actually noticed this immediately after making the payment and called them. I tried to have that payment cancelled as I added my Fidelity account and wanted to make an immediate payment from that account. I also wanted to make sure this didn’t mess up my rates, charge me a return payment fee, and more importantly not screw up my score. I was assured that everything would be fine, and got the $38 charge reversed and was assured that my rate and score would be fine.

03/13/2009*     Credit Adjustment for Returned Payment Fee      -38.00
03/09/2009*     FEE FOR RETURNED PAYMENT FEE FOR RETURNED ELECTRONIC TRANSACTION     38.00
03/09/2009*     RETURNED CHECK/DECLINED BANK TRANSACTIONS     500.00
03/06/2009*     COMPUTER PAYMENT RECEIVED – THANK    -500.00
03/05/2009*     COMPUTER PAYMENT RECEIVED – THANK    -500.00  

This was all noted on my account and to top it off my payment wasn’t even due till the 20th of March anyway. My minimum due was less than $500 to boot.

I told the first customer service person that this was ridiculous and she said “sir, it’s actually worse to have a returned payment than a late one”. I just said… interesting, could you please escalate this. American Express will lose my business and all further interest from my account unless the rate increase is reversed.

I was transferred to a supervisor (Chris x23468 – he was nice and only doing his job but reading from a script no doubt). He basically said the same thing, it wasn’t American Express’ mistake and despite the fact I called up within 10 minutes of noticing the error and corrected it, and despite the fact that they even reversed the fees they couldn’t reverse the rate increase. I said I’d be sending this all to the CEO of American Express, Consumerist, and NewCreditRule’s.

I also have an American Express Clear card, but guess what, despite making the same payment mistake my rates are still at 8.89% on that card. Talk about complete idiocy.

It’s amazing how they’d be willing to lose a few thousand dollars in interest, an excellent and very loyal customer of over 7 years, plus some additional negative publicity over something like this. At this point I’ll be taking them up on that 5.4% credit offer, paying them off completely and never using them again if possible. I won’t close the accounts since it’ll probably do my FICO no good, but oh well. I’ll just be the customer they hate, the type that earns them no interest, the type to use Visa, it’s accepted absolutely everywhere anyway.

But what else is new, everyone already knows the credit industry is fucked up. Oh and in case you didn’t already know, American Express profits are down 56%.

UPDATE: I decided to call American Express once more this morning on my way into work. I explained the entire thing again… This time around I spoke with an Ilene out of Hillsboro, NC. She was very empathetic and realized how I’ve almost always paid double and never been late, plus the rest of the documented history of how I called to try and correct the payment snafu 10 minutes after it happened. At first she said there wasn’t really anything she could do. For some reason after a short wait this changed to her dropping me from 27.22% to 13.99%, a little closer to my original rate of 11.99%. Still I’m a bit miffed since this there’s really no reason for this. I’m still out the extra $350~ in extra interest charges for the past two months as well. Plus this tells me that:

  1. The two people last night lied to me.
  2. The two people last night were just being lame and just didn’t care.
  3. The two people last night weren’t very well trained.
  4. All of the above.

My advice to American Express, listen to Barry Schwartz’s TED talk and stop screwing your loyal customers. Kudos to Ilene for trying, I appreciate it.

UPDATE: Logged into Amex’s website to verify the rates and all that. Looks like the jerks dropped my limit on the Clear card a couple grand to within $117 of my current balance. Thanks for screwing with my credit score once again Amex.

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Corey

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4 thoughts on “Cheeky American Express, double the interest but a 5.4% credit in return.”

  1. "Logged into Amex’s website to verify the rates and all that. Looks like the jerks dropped my limit on the Clear card a couple grand to within $117 of my current balance. Thanks for screwing with my credit score once again Amex."

    They did the same thing to me. I had a limit of 15k, and had a balance of 7300, and they dropped my limit to 7500!!!

  2. It is in their interest, and the interest of any current creditor with the ability to change interest rates (if they only look at THEIR relationship with you and do not consider other creditors) to lower your credit score. That way they have an excuse to raise your rates even higher.

    The only people who can benefit from decreasing your credit score are the ones who have the greatest power to lower it. These are the companies that are giving FICO most of their business.

    The threat of decreased credit scores is also how credit monitoring services are sold, including by the credit bureaus.

    Credit reporting AND scoring are a racket.

  3. Try being someone who NEVER carries a balance with them having your limit decreased because you work in the auto industry.

    Yes, that's why nearly all my cc limits have been cut and why my rates have increased. I'm in zero danger of being laid off – don't work for the "big 3", but it's all about demographics and numbers. Doesn't help that I live and work in the 2nd highest state reporting unemployment figures.

    Guess I will have to go the cash route on purchases until this whole mess gets straightened out. Congress' bill is going to help zero with these practices

    1. Yeah, it's pretty messed up, and it's really only gotten worse with everything going on. Obviously they get more and more flamboyant with their schemes to take advantage of consumers as things progress.

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