Off topic (maybe) Have you been Downrated on your American Express accounts?
03-05-2009, 05:32 AM
#11
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AMEX causing bankruptcy???
Must be some crazy story. Did they put a gun to your head and force you to run up the card? Did they not accept your payments?
Years ago they were requiring cashiers to call it in prior to their approval. I cancelled the card because it was frustrating. When I got married, my wife had AMEX and swore by it. We've used it happily ever since.
Years ago they were requiring cashiers to call it in prior to their approval. I cancelled the card because it was frustrating. When I got married, my wife had AMEX and swore by it. We've used it happily ever since.
03-05-2009, 08:16 AM
#14
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Uh, it's very common for businesses to use credit to operate. When that credit goes away, they can..
no longer operate. It's common enough that even the President mentioned it in his address to congress.
As an example, a business uses a $40k credit line to pay for expenses, pay employees... during a month. At the end of the month their revenue comes in, they pay off the LOC and never have to pay any interest.
Then the credit issuer lowers the credit limit to $20k and now the business can't float as long until they need their revenue to come in. Sometimes that means they have to let employees go, and sometimes that means they can't deliver on goods and services.
Another example is that a lot of businesses use lines of credit to pay for big projects. So they may have a $5M project that needs $500k cash to get them rolling. So they start, then the bank reduces their LOC to $250k and they can't complete the project, they get paid nothing. Now they're left with a $250k LOC, no revenue to pay it off, and no shot at getting another LOC because their credit is now damaged.
That results in bankruptcy.
As an example, a business uses a $40k credit line to pay for expenses, pay employees... during a month. At the end of the month their revenue comes in, they pay off the LOC and never have to pay any interest.
Then the credit issuer lowers the credit limit to $20k and now the business can't float as long until they need their revenue to come in. Sometimes that means they have to let employees go, and sometimes that means they can't deliver on goods and services.
Another example is that a lot of businesses use lines of credit to pay for big projects. So they may have a $5M project that needs $500k cash to get them rolling. So they start, then the bank reduces their LOC to $250k and they can't complete the project, they get paid nothing. Now they're left with a $250k LOC, no revenue to pay it off, and no shot at getting another LOC because their credit is now damaged.
That results in bankruptcy.
03-05-2009, 12:01 PM
#17
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Thanks for the replies,
I just check with Equafax (not the travel.com ) (one of the credit reporting company listed by AMEX) Their report is the one that AMEX is using at this time, (and I'm wondering if it's not a product of AMEX). Any way because AMEX had lowered my limits, my credit score has been lowered, and from what I can determine, this is now a possible ever continuing spiral down effect. So as of today, all accounts have been paid in full. I will be asking AMEX to refund credit card fees (I have paid for Platinum coverage, and request basic service). I have thought of just canceling all the accounts, but have been told that by doing that (canceling accounts) will also have a negative effect on scoring.
Cant win, can I.
Mark
Cant win, can I.
Mark
03-06-2009, 03:10 AM
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Sorry this is the situation for many folks right now...it seems that lowering your
score can be done very easily and then raising it not so quickly...you can also post in most of the name brand credit reporting bureaus for personal lines: Transunion, Equifax and Experion a personal statement...not sure if it matters or not but it might be worth posting at least. It took me almost two years to correct something that was entered wrong once so I feel your pain, but you are correct that closing the account would cause a bigger issue...you want the difference between what you owe and what is available to be a large as possible. Good luck.
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