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American Express Complaints - Interest Rate Increase

Review all American Express complaints

American Express
Posted: 2009-08-12 by   Amexunfairrates
Interest Rate Increase
Complaint Rating: 96 % with 25 votes
Company information:
American Express
Tracy, California
United States

Just got a letter from American Express dated 8/4/09 that they are raising my interest rate. Not beause of a change in my credit history. Nor have I ever been late on my payments -NEVER! I always pay more than my minimum balance each month. Effective Oct 1, 2009 - my new interest rate goes into effect- and it applies to EXISTING Balances and future balances. American Express explanation... due to the business and ecnomic environment. I thought that could not punish consumers with interest rate increases unless we were 60 days late. How does the new law that went into effect protect consumers. I am responsible with my credit card. So, I have cancelled my Amercian Express card and will pay the entire balance off. They are not going to take advantage of me!
Comments United States Credit Cards
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Comments

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 101 days ago by   Tony the Nice Guy +1 Votes
I just received a letter from American Express dated Aug 4, 2009 stating “to be responsive to the business and economic environment. They have found it necessary to increase rates and fees on some products.” They will increase APR on purchases and cash advances, increase APR on any balances that have a penalty rate because of late payment and increasing late payment. But the good news is that they will not charge an over the limit fee.

Now this letter does not state I have the right to reject this rate increase.

All this supposes to take place Oct 1, 2009. Please let me know if a Class Action Lawsuit is filed. I can be reached on Blackberry Messenger at PIN: 30943C25
 100 days ago by   deepfoundations +1 Votes
I just received the same letter. I thought I had missed a payment at first. I called them to ask about any late payments. They said I had never made a late payment for the 5 years I had the card. I rarely keep a balance and pay in full most months. I told them not to raise the rates or I would cancel the card. She said she would be glad to close my account. I said I've been a loyal customer to AE and don't appreciate the increase. They get a kick back everytime I swipe the card and their just going to let me walk? This should be illegal. I had an agreement with AE with a specified interest rate. Show me the fine print where it says they can raise my rate at any time. Show me!
 100 days ago by   charlie14515 +1 Votes
I just received the same letter. After some research I discovered the Credit Card Reform Act does not go into effect until Feb 2010. I guess that gives all the credit card companies enough time to stick it to their customers before they can get in trouble for it. Luckily, the other letter in the mail contained a check from my mortgage holder with an escrow overpayment check that will cover 75% of my AE balance. I paid my balance off and told AE what they could do with their card.
 100 days ago by   Jay701 0 Votes
Same story. 8/4/09 letter. My family charged over $65, 000 on AMEX last year. Usually I pay the balance in full each month. FICO over 790. Never late. 30 year old account. Told them to stuff it and canceled the card for myself, my wife and two young daughters.

AMEX used to be a Tiffany card, a cut above.., now it's just another sub-prime whore I guess. Credit Unions, here I come!

Does this business model work in other than the very short term? Warren Buffet, are you listening? Seems like GM also had this same "strategy" of giving up loyal customers and market share--until there were no more customers...
 100 days ago by   SteveCt 0 Votes
They just did the exact same thing to us. We have always had an account in good standing. They started this whole process by lowering our credit limit twice, and then on our gold account they said we can only spend $1000 at any given time. So, I ask them, why do you say that the account has no spending limit? They say, oh, it doesn't have a spending limit, you just can't spend more than $1000.

Hmmm...that sounds like the very definition of a spending limit.

In any event, we are sending a letter to Amex CEO, CRO, our state Senator, Congressman, and the President's office. It might not make a difference, but it will at least give them some extra paperwork to do.
 100 days ago by   Scott Knievel 0 Votes
I received the sam eletter as well. I started looking at previous statements online and found they had increase my rate in January of this year as well from 9.9 to 12.9. now they are again increasing it to 15.24%. It is nice to see how a business treats good customers with excellent credit. I would hate to see how they treat people who don't.
 100 days ago by   BewareBigGovt 0 Votes
As we have separate American Express accounts we received 2 letters. One account is changing to Prime +11.99% and the other to Prime +13.99%, which right now yields 15.24% and 17.24% respectively. Our previous rate was a fixed 9.99%, so the increase is 52.5% on the one card and 72.5% on the other card. The only reason that the credit card companies are raising our rates is because of the Credit Card Reform Act that has been passed by the current liberal socialist government in the name of protecting the consumer. I don't see how increasing our rates by 52.5% and 72.5% protects the consumer. The government needs to stay out of the private businesses and let the free market dicate rates, not the government. Be very wary of the things that the goverment is doing in the name of protecting the citizenry!
 99 days ago by   jalw 0 Votes
I recieved the same letter dated 8/5/09. I have sent two e-mails with my objections. I enrolled for a card at 7.99% fixed rate. I was told By american express they can change the card holder agreement anytime they want. I suggested to be fair to their customers they should only increase the rates on new purchases or cash advances effective 10-1-09. This way customers would have a choice to decline or accept the change. They said NO. AMERICAN EXPRESS DOES NOT CARE ABOUT THEIR CUSTOMERS...I have e-mailed complaints to Federal Consumer Protection Division and the Better Busness Bureau. I suggest all American Express customers flood them with complaints. Legal action should be taken against them for unfair consumer practices. The consumer is also affected by the economy and the government is not bailing us out as they are big businesses & banks...if I file bankrubptcy I loose my job...
 99 days ago by   Tired of Greed 0 Votes
I received this letter this week. Same situation as all the comments above; execellent credit, etc. I went up two management levels in their Customer Service center with no satisfaction. The last manager I spoke with said even her card rate was being raised.

I have filed a complaint with the Attorney General of my state. While this news didn't change their stance, it did seem to irritate the manager with whom I spoke. Not sure that baiting the bear is wise at this point, I don't know what kind of retaliation may result.
 99 days ago by   Liffeyboy +1 Votes
Dear Mr. Chenault (CEO AMEX),

I just received "your" letter from "your" company regarding raising the interest rates on my Blue card...and ending with "Thanks for being a card member and "We look forward to serving you"...BALONEY!!! First, let me congratulate you and American Express on joining up with the Low Life, Loan Shark Club of America, a.k.a. the rest of the Financial Industry. The terms outlined in 'your' letter would be to say the least, outrageous under normal circumstances, let alone in the midst of the longest recession since the 1930's. This is proof that American Express does not care how or where it makes a profit, if it means screwing the consumer then, so be it. I have been working diligently to pay down my debt, always more than the minimum and always on time, for what? I will clear my balance at the earliest convenience and will never do business with American Express again. The reason I went to "Blue" in the first place was a "fair" interest rate, not low, "fair", I now see that this was nothing but a bait & switch operation. Hopefully you are reading the same financial news as I am, and if you are you will see that statistics are showing the American consumer quickly turning away from credit cards...great news for me...bad news for you Mr. Chenault. Just remember when this recession is over, all of the good customers that you and your company attempted to screw along the way, because we certainly won't forget! Hopefully one of these fine days I will read about American Express's fall from grace ala Lehman Bros, etc, etc. Also please enjoy your "annual incentive" at your customers expense!

Thanks for Nothing.
 96 days ago by   confiable19 0 Votes
I work in this industry and was therefore shocked to receive the same letter. I have a very good credit history and credit score - upon calling I was told by a supervisor that what AMEX is doing is completely legal. Under normal conditions one is allowed to close a credit card account freezing the terms of the card at the time of closure (thus keeping my rate where it is currently). However, I was advised that there is no opt-out on the rate increase and thus, any remaining balance after 10/1 would be at the new rate- a 60% increase in my existing rate.

Luckily my balance was small enough that I was able to liquidate some other assets and pay the card off in full. It appears that AMEX is looking to rid itself of revolving balance accounts (in this case the Blue card).

This is fine, they will lose my business as well as anyone else I can spread the word to. I was urged to "write a letter" to the Amex service team, I wouldn't waste another the money on the stamp. Good luck card holders- things will probably continue to get worse for some time.
 95 days ago by   BusinessMajor 0 Votes
Same thing happened to me just this week. Over a period of years, they've increased my credit limit to $22, 000, which I never asked for. This $$ figure is absurd to begin with but certainly helps the credit ratio and makes my credit score look pretty decent...until they decided last month, without warning, any missed payments, any specific reason other than 'we're a financial institution, and we're sorry but over the past couple of decades have been making poor business decisions...in turn, we're choosing to screw you without warning to try to fix the mistakes we've made'.

So, I get to take this one up the pooper thanks to their choice to raise, and then without any rational data regarding me and the way I handle my credit, lower my credit limit. Adding insult to injury they've decided to jack around with my APR on Oct 01 as well. What a crappy business partner, once my balance is paid off, I will not be going back.
 94 days ago by   JaGo 0 Votes
Same happened here. Amex is not the brand they once were.
 94 days ago by   MadINCalifornia 0 Votes
Same thing here! Jill at AMEX gave me the same garbage. I asked about the new law that passed to protect consumers - allowing us to call, close our accounts and freeze our lower interest rates until the balance is paid in full. Nope - That does not work for any of us who received this rate increase letter DATED before the law takes effect. Lucky us! How is it legal to sneak all these letters in - RIGHT BEFORE the law requires some of the new previsions to begin - TOMORROW, AUGUST 20th, 2009!! How convenient. And Jill's response, this is the timeframe in which AMEX usually reassesses everyone's rates. She was nice enough to tell me how much $$ my minimum payment will be on 10.01.09. Great... that's $$ I can't put back into the economy now. THANKS AMEX!!

And I have another question for everyone leaving a complaint... does your letter state "Like all companies large & small, our pricing has to be responsive to the business and economic environment. As a result, we have found it necessary to increase rates and fees on SOME of our products." ~~SOME PRODUCTS??? ~~ Mine is a Costco Rebate card. I'm curious to know how many & what type of 'products' have been increased... Does this affect ALL AMEX card holders?
 94 days ago by   another opinion two 0 Votes
We have (make that HAD) a personal AMEX (since 1974), a business AMEX (for 8years) and were accepting AMEX via our merchant status (for the past 4 years). On 8/18, we received a letter from AMEX dated 8/11 advising us they were exercising their right under their merchant agreement to begin 'holding' funds due to us in 'reserve' under some b.s. they called a 'business decision'. Lo and behold they also cancelled both our personal and business cards this week which have NEVER had a late payment, NEVER been over the credit limit, and RARELY have a carryover balance. We have excellent credit. We were told we were 'costing' them money because we pay in full. Needless to say, we have cancelled our merchant status with AMEX (but will accept cards that 'seem' to appreciate our business) and are thoroughly disgusted with what used to be a small business, customer friendly company. The are now lower than the stuff slugs excreet. AND...took our 124, 918 award points advising because the card was closed, the points were no longer valid. HEY YOU AHs -- YOU closed the card without warning for no sensible ethical decision. Well, know what ? What goes around, comes around and I hope you get yours SOON.
 94 days ago by   Liffeygirl +1 Votes
There is definitely dirty work afoot here. How come American Express was allowed under the wire on this legislation? So much for democrats being bad for big business. Come October 1st American Express will legally steal billions of dollars from the pockets of struggling American consumers...Thanks President Obama! Every State Attorney General in the country should be jumping on this right now! This is wrong, wrong, wrong!!

NEW YORK (CNNMoney.com) -- Consumers struggling with credit card debt will start to see some relief Thursday as the first steps of the Obama administration's industry overhaul go into effect.

Beginning Aug. 20, credit card issuers will be required to give customers 45 days advance notice before making any significant changes to a contract and will be required to mail bills 21 days before the due date.

Under current laws, issuers are required to give 30 days notice before changing a contract and mail bills at least 14 days in advance.

Consumers will also have the right to reject changes to their contracts, including interest rate increases, and they will have the option of paying off their balances at their existing rates within five years.

The changes are the first to come under the Obama administration's credit card reform act, which was singed into law in May.
 94 days ago by   Pdorrell 0 Votes
WHY? BECAUSE...I also have been a good customer and mine have gone up but I understand why they are doing it. Good customers are considered deadbeats in the CC world because they don't make any money on you. They may be trying to get us off the books.

DO NOT CLOSE CARDS UNLESS YOU HAVE OTHER CREDIT BECAUSE YOUR CREDIT SCORE WILL SUFFER SIGNIFICANTLY!!!

OPTING OUT. Opting out of a new rate may or may not close your card--but the info to opt-out is in the disclosure info you got when the card was sent to you. If you don't have it, call customer service and make a verbal opt-out and then ask how to do it in writing. BEWARE AGAIN! It is best to stop using the card than closing it--your credit will suffer significantly.

NEW LAWS. Some credit card laws went into effect immediately, some in Feb 2010, and some in Aug 2010.

Credit card companies have to have the money to back up purchases and cash advances. In addition, they have to pay their employees and the government back.

Raising rates is their way of living up to their commitments and recouping the losses when the many fees can no longer be applied next year. Rates on all cards are likely to go up and you can either live with it or opt-out which may close your account.
 93 days ago by   Liffeyboy 0 Votes
You obviously work for these Loan Sharks!
 92 days ago by   irritatedbyAmex 0 Votes
I have worked and is still working at a Major Credit Card company...it is understandable to have Credit Card Companies raise the interest rate...needless to say, this is how they make lots of money and fast!!! However... all the credit card companies that I worked for...unless you were late on your account...will give you an option to opt out of this change in terms..stop using the card and payoff whatever balance you have left on your current rate...which is definitely fine by me because we stopped using the card a long time ago. When I called AMEX to opt out, they said that the letter was dated August 4th and that the change in Federal Regulations whatever, did not take effect until August 20..meaning, prior to August 20 I wouldn't have the option to opt out of the change...whereas all the other credit card companies had been doing this since time immemorial!!! What a piece of crap...I know it's mean, but this is the kind of company I would wish to go BANKRUPT!!!
 90 days ago by   Anti-AMEX 0 Votes
Same here...is congress doing anything about this...I was really lied to by the customer service person..and then he caught himself! Said everyone got a rate increase and later he said only those of us with below the min. or small rates got an increase...then he said I was a day late for opting out! (on vac. for 3 weeks, they only gave you 20 days from the date of the letter)...and then he said those with 12-17% interest rates didn't get an increase...Any class action suits going on; any congressmen(women) looking into this? I said, so you're getting the money off of those with great credit and low rates? He put me on hold for 22 minutes to "check something" and kept checking the line to see if I would hang up and then put me back on hold.

PS. AMERICAN EXPRESS ANSWERS THEIR EVENING CALLS IN BOMBAY AND DAY-TIME CALLS IN CANADA...so much for AMERICAN!!!

OH, and has anyone noticed they still have a payment due date of 14 days after the statement, not the new required amount...

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