Posted on 02/25/2009 5:26:14 AM PST by kellynla
It used to be that credit-card companies lured customers with cash rewards. Now American Express Co. is paying to get rid of them. The card issuer is offering selected customers a $300 AmEx prepaid gift card if they pay off their balances and close their accounts.
The unusual move underscores how quickly conditions have deteriorated in the credit-card market. The current economic morass was provoked by spiking mortgage defaults. But as the economic crisis widens and unemployment climbs, there is growing concern that credit-card defaults will soar into the stratosphere as well.
"This is a huge paradigm shift," says Curtis Arnold, founder of CardRatings.com, a credit-card review Web site. He says he expects other large companies to follow suit with offers to entice consumers to pay off their balances, as card issuers cope with increasing defaults.
Selected members -- the company wouldn't disclose how many -- began receiving letters with the voluntary offer earlier this month, according to Molly Faust, an American Express spokeswoman. "It's a relatively small number of cardmembers who have sizeable balances and little spending and payment activity," she says.
(Excerpt) Read more at money.cnn.com ...
Wow, I should have gotten’ 5-10 cards and slow pay all..$3000.
Well, I don’t know how that happened but here is the correct link to the article:http://online.wsj.com/article_email/SB123542259989852121-lMyQjAxMDI5MzI1NDQyMjQyWj.html#printMode
I also try not to accept these cards in my store, other cards are encouraged.
Meantime, I keep getting credit card solicitation junkmail in the mail....
> I also try not to accept these cards in my store, other cards are encouraged.
Here in New Zealand American Express is accepted, but not nearly as frequently as Visa, Mastercard or Diner’s Card. Sometimes you have to look really long and hard to find someone who accepts American Express.
The reasons? Exactly the ones you gave: they are expensive on a per-transaction basis and they are difficult to deal with.
Some retailers here who do accept Amex will ask you if you have Visa or Mastercard instead. They aren’t supposed to do that, but they do.
Not to mention the fact that they charge an annual fee for the “privilege” of having a card.
No thanks.
Let me guess, those “select” customers that will be rewarded with $300 are those that have a history of not paying on time.
Same here. The points are way too high. I tell my customers to use the nearby ATM. If they show me the receipt I pay the fee.
The old school would be to just shut off these bad customers. Goodbye.
But with today’s lawyers, a lawsuit will result, so this boondoggle crap with a buyout is done instead.
I also try not to accept these cards in my store, other cards are encouraged.
When merchants display the AmEx logo, they should not try to steer customers to other cards when a AmEx card is proffered. I wonder how they would respond if a customer said OK, but I want a discount if I use a Visa card instead?
There should be a close quote at the end of the word “encouraged.”
Haven't looked back.
I don’t take AmEx. Monthly charges and transaction charges were outrageous. If someone can only pay me with one, they can just go elsewhere.
Now if we can only get them to stop sending pre-approved junk mail twice a month.
Yep, and Amex is the worst. I've had an Amex card since 1989. I used it extensively when I traveled a lot, often running $30K or more across it per month in travel and other expenses related to my business. I still have it, don't really need it and don't use it much, but I pay for the service. I'm considering starting a couple of new businesses in the near term. I guarantee if Amex sends me a letter telling me they don't want my business anymore they won't get it ever again. IMHO, the negative PR this is going to generate amongst folks like me will cost Amex dearly.....
gotta wonder what kinda deal costco has cut with amex
Or else ones who took advantage of some "0% cash advance until you pay it off" offer, and then didn't charge anything on top of that. Then they just make minimum payments for years to keep their "free money".
I've done that many times to banks who offer me free money. The banks expect I'll then charge other things (which have an interest charge) which I can't pay off until I've cleared the card of all the 0% balance. Ha! That credit card is buried until I've paid off the 0% balance.
So Amex is finally going to die. I dropped Amex back in 2002. I sent them a check to pay a bill, they claimed it was no good (my bank said otherwise). This was during some years that I was blacklisting companies due to absolute incompetence. When I ended business with such companies, my letter closing business typically ended with “Please do the marketplace a favor. DIE!”
Seems like a cheap way to foist your toxic debt onto your competitors.
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