Sooner Blue

Yep, American Express looks for patterns on how you spend your money and if they don't like where you shop, they will lower your credit limit accordingly. Without you missing a payment or anything. Like if you shop at "certain merchants" - say Wal-Mart - it must mean you're poor, so you pose a higher risk.

They call it a "risk management" technique, and to them it's the most sensible way of trying to weed out bad credit risks...but it's really snobbish discrimination against those who shop at places like Wal-Mart and K-Mart.

And now American Express has decided to hunker down and simply lie about doing this. Read the following news accounts and judge for yourself...

From the newyorktimes.com: "[..] Kevin D. Johnson, a 29-year-old Atlanta resident who runs a marketing and communications firm, received a letter from American Express last October saying that his credit limit was being lowered. One reason was that other customers who had used their cards at places where he had shopped were late in paying their bills.[..]"

Here's what American Express told the Atlanta Journal Constitution about this last December:

“We’re just doing this to manage risk,” said Lisa A. Gonzalez, an American Express spokeswoman. She declined to say which retailers or mortgage companies are associated with consumers with higher default rates. She said it makes sense to examine these factors because “customers who have loans outstanding with certain lenders or customers who make transactions with certain merchants tend to have a higher proportion of credit issues or a higher probability of default.”

http://tinyurl.com/8x6q8g

And this is what they told the New York Times this week:
“The letters were wrong to imply we were looking at specific merchants,” said Susan Korchak, a company spokeswoman....Now, the company says that there never was such a list. So what about the language in its letters to cardholders, which calls out particular “establishments” where cardholders had shopped, I asked. Well, apparently that was all just a big misunderstanding, despite the number of people who must have been in on drafting the notes in the first place.[..]"

http://tinyurl.com/cnckzf

So...it was okay to monitor your transactions with "certain merchants" a month ago, it was a legitimate way of managing risk; but this month they're telling a different story, that they were never doing it in the first place. Yeah, you betcha.

And if you get pissed and cancel your card - don't forget, if you stop using a card it might be bad for your credit if you've had the card for a long time. Check your contract to make sure you won't have to pay a penalty for not using the card...and if you don't, then just let that sucker sit idle. I'd go out and make tiny transactions like $.50 of gas...which will cost more to process than they collect in fees from the merchant. But that's just me...vengeful.

But what do they care? The credit card industry is sitting pretty right now. Thanks to the rewritten bankruptcy law, they'll eventually get their money...with interest piling up in the meantime. Their customers will be stuck for a while until they make the transition to all-cash consumption.

That's how we should be living folks...paying cash. If we don't have the money for it, don't buy it. Save up for it. It worked well for our ancestors...they only borrowed money to buy a house or a car.

Look what living on credit, shuffling paper and plastic around from company to bank to company has gotten this country...

I refuse to be one of those poor schnooks on the treadmill of perpetual debt. I use my Mastercard because it's quick and convenient, but I pay it off every month, they've never made one penny interest from me. I would wonder why they keep me, but I read that they make a little money from the merchants.