People who get the letter and don’t pay off the balance lose their cards anyway - and AmEx will be writing off the balances. I presume if these were good clients to begin with, they would not be getting the letter. What they are attempting here is to rise to the top of the priority list of debtors, a rather moot point. If people could pay up, they would.
No new charges allowed, yes. Balance written off, no. From the "Terms and Conditions":
"2. If the entire balance is not paid prior to April 30, 2009, you will not receive the $300 value prepaid card and you must continue to make at least your minimum payments until your balance is paid off."
Don’t bet on it. A/E has gone rather mad with it’s gold card lately. I did about $25k business with them in 2007. I made one late payment, between 24 and 48 hours late. Months later they put a limit on the card. It was the first of December. I reduced the amount I put on the card, and just as mysteriously they took the limit off. In 2008 I did about $13k worth of business with them. With no late payments, I had another limit put on the card around the first of December. This year we’ll probably do about $2k business with A/E.
I’ve had charges of up to $5k in one month on the card several times, and a number of them in excess of $3.5k. These large balances were paid off on time.
Evidently they don’t want my business, because they have all but made it clear they are not a reliable business partner.
I’ve had the card since 1987.