xCxStylex
Senior member
- Apr 6, 2003
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There are a lot of news articles on WHY they're doing this, I read it on an AP newswire. I'm pretty sure none of the cheapskates and financially responsible people who always pay their bills who actually read any "Hot Deals" section fall under the below target group.
http://www.chicagotribune.com/...09feb24,0,762020.story
American Express Co. is paying some cardholders $300 each to close accounts so the lender can reduce the risk of defaults as the recession deepens.
People who got the offer to "simplify" their finances must pay off their entire credit card balance by April 30, according to New York-based American Express.
Enrolling in the program cancels a customer's account and may lead to the forfeiture of reward points or rebates, the company said.
"What AmEx is trying to do is move to the front of the line in terms of getting paid back" by customers who owe debts to multiple lenders, said Michael Taiano, an analyst at Sandler O'Neill & Partners. "They clearly grew loans faster than their competitors in the years leading up to this financial crisis."
Chief Executive Kenneth Chenault is shedding customers as rivals reduce credit lines, raise interest rates and cut back on mail solicitations to brace for future losses. The industry's defaults are set to break records and may reach 11% by year-end.
Consumers have fallen behind on credit card payments as U.S. unemployment reached 7.6% last month, the highest rate since 1992.
Charge-offs, or loans that American Express has deemed uncollectable, rose to 8.29% in January from 7% the month before, while payments that were at least 30 days overdue climbed to 5.28% from 4.86%, the company said last week in a filing for debt packaged into securities.
American Express, which received $3.39 billion from the U.S. Treasury to boost its capital, said last month that fourth-quarter profit from continuing operations fell 72% to $238 million as more consumers defaulted.
http://www.chicagotribune.com/...09feb24,0,762020.story
American Express Co. is paying some cardholders $300 each to close accounts so the lender can reduce the risk of defaults as the recession deepens.
People who got the offer to "simplify" their finances must pay off their entire credit card balance by April 30, according to New York-based American Express.
Enrolling in the program cancels a customer's account and may lead to the forfeiture of reward points or rebates, the company said.
"What AmEx is trying to do is move to the front of the line in terms of getting paid back" by customers who owe debts to multiple lenders, said Michael Taiano, an analyst at Sandler O'Neill & Partners. "They clearly grew loans faster than their competitors in the years leading up to this financial crisis."
Chief Executive Kenneth Chenault is shedding customers as rivals reduce credit lines, raise interest rates and cut back on mail solicitations to brace for future losses. The industry's defaults are set to break records and may reach 11% by year-end.
Consumers have fallen behind on credit card payments as U.S. unemployment reached 7.6% last month, the highest rate since 1992.
Charge-offs, or loans that American Express has deemed uncollectable, rose to 8.29% in January from 7% the month before, while payments that were at least 30 days overdue climbed to 5.28% from 4.86%, the company said last week in a filing for debt packaged into securities.
American Express, which received $3.39 billion from the U.S. Treasury to boost its capital, said last month that fourth-quarter profit from continuing operations fell 72% to $238 million as more consumers defaulted.
Originally posted by: clipperfixer
My guess is that this offer is for people that are having some trouble paying their bill, and are perhaps potential deadbeats, the real kind. I have had an AMEX card for almost twenty years, pay balance in full, and on time. I have an unused Blue card. (I only got it because I was tired of the constant mail bombardment about getting one) I am a deadbeat by industry standards, they don't get any late fees etc from me. I got yet another for the millionth time offer to get a platinum card yesterday. I have no idea why I need one, the green card works fine. I don't think they are getting rid of people that are having no trouble paying their bills in full. On the other hand they can have my Blue card for 300.00 bucks..........