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AmEx Encourages Cardholders to Leave ( $300 to go )
Wall Street Journal ^ | FEBRUARY 24, 2009 | MARY PILON

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 ...


TOPICS: Business/Economy; Extended News; Front Page News
KEYWORDS: americanexpress; amex
You know business is bad when they start paying to get rid of you. LOL
1 posted on 02/25/2009 5:26:14 AM PST by kellynla
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To: kellynla

Wow, I should have gotten’ 5-10 cards and slow pay all..$3000.


2 posted on 02/25/2009 5:29:03 AM PST by mikelets456
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To: All

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


3 posted on 02/25/2009 5:29:14 AM PST by kellynla (Freedom of speech makes it easier to spot the idiots! Semper Fi!)
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To: kellynla
As a retailer, I refuse to get an Amex card. The percentage they charge us per transaction, is the highest in the industry.

I also try not to accept these cards in my store, other cards are encouraged.

4 posted on 02/25/2009 5:30:58 AM PST by alice_in_bubbaland (Markets and Marxists Don't Mix! Let the Revolution Commence!!!)
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To: kellynla

Meantime, I keep getting credit card solicitation junkmail in the mail....


5 posted on 02/25/2009 5:31:34 AM PST by anniegetyourgun
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To: alice_in_bubbaland

> 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.


6 posted on 02/25/2009 5:37:01 AM PST by DieHard the Hunter (Is mise an ceann-cinnidh. Cha ghéill mi do dhuine. Fàg am bealach.)
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To: alice_in_bubbaland

Not to mention the fact that they charge an annual fee for the “privilege” of having a card.

No thanks.


7 posted on 02/25/2009 5:39:38 AM PST by Red in Blue PA (If guns cause crime, then all of mine are defective.)
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To: kellynla

Let me guess, those “select” customers that will be rewarded with $300 are those that have a history of not paying on time.


8 posted on 02/25/2009 5:40:24 AM PST by jennyjenny
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To: alice_in_bubbaland
As a retailer, I refuse to get an Amex card. The percentage they charge us per transaction, is the highest in the industry. I also try not to accept these cards in my store, other cards are encouraged.

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.

9 posted on 02/25/2009 5:41:14 AM PST by Focault's Pendulum (I'm selling my tagline on Ebay Buy it Now! $1.95...S&H $14.95...only 3 left.)
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To: kellynla

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.


10 posted on 02/25/2009 5:44:14 AM PST by George from New England (escaped CT 2006; now living north of Tampa Bay)
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To: alice_in_bubbaland
"As a retailer, I refuse to get an Amex card. The percentage they charge us per transaction, is the highest in the industry.

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?

11 posted on 02/25/2009 5:53:35 AM PST by Truth29
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To: Truth29

There should be a close quote at the end of the word “encouraged.”


12 posted on 02/25/2009 5:55:56 AM PST by Truth29
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To: Red in Blue PA
My wife and I were Amex customers for a while, mostly due to job expense/reimbursements. When the kids came along and she stayed home with them we didn't use the cards and used the $50 for food and diapers.

Haven't looked back.

13 posted on 02/25/2009 6:07:19 AM PST by Bosco (Remember how you felt on September 11?)
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To: alice_in_bubbaland

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.


14 posted on 02/25/2009 6:09:40 AM PST by Mercat (There will be a day)
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To: kellynla

Now if we can only get them to stop sending pre-approved junk mail twice a month.


15 posted on 02/25/2009 6:18:09 AM PST by fzx12345 (Please use your tax refund to support life.)
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To: anniegetyourgun
Meantime, I keep getting credit card solicitation junkmail in the mail....

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.....

16 posted on 02/25/2009 6:24:20 AM PST by Thermalseeker (Government is not the solution to the problem. Government IS the problem - Ronald Wilson Reagan)
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To: alice_in_bubbaland
As a retailer, I refuse to get an Amex card. The percentage they charge us per transaction, is the highest in the industry.

gotta wonder what kinda deal costco has cut with amex

17 posted on 02/25/2009 6:39:24 AM PST by TheRightGuy (I want MY BAILOUT ... a billion or two should do!)
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To: jennyjenny
Let me guess, those “select” customers that will be rewarded with $300 are those that have a history of not paying on time.

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.

18 posted on 02/25/2009 6:43:04 AM PST by KarlInOhio (On 9/11 Israel mourned with us while the Palestinians danced in the streets. Who should we support?)
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To: kellynla

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!”


19 posted on 02/25/2009 6:44:58 AM PST by Fred Hayek (Leftism is a mental disorder.)
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To: kellynla

Seems like a cheap way to foist your toxic debt onto your competitors.


20 posted on 02/25/2009 6:51:51 AM PST by Atlas Sneezed
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To: TheRightGuy

gotta wonder what kinda deal costco has cut with amex


Since Costco is one of the biggest marketers of AMEX, they probably don’t pay a penny in transaction fees. Especially considering that the average transaction is pretty large.

As a merchant, I’m happy to take AMEX. If they charge a percent more, I don’t care. A buyer’s a buyer.


21 posted on 02/25/2009 6:54:50 AM PST by Atlas Sneezed
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To: mikelets456
“Wow, I should have gotten’ 5-10 cards and slow pay all..$3000.”

Only problem with that is your interest would have cost you 10 times that amount easily. They aren't forgiving interest payments. You still have to pay off all your debt to get the 300. Frankly this doesn't have a chance of working. Someone with a large balance is probably incurring $300 a month in interest anyway. Paying off their debt could have saved them thousands. A few might be able to transfer their debts to another card and get the 300 but for most, they would have paid it off long ago if they could.

22 posted on 02/25/2009 7:04:36 AM PST by monday
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To: alice_in_bubbaland

Isn’t the rate on all rewards cards from Visa and Mastercharge as high or higher? I know AmEx was higher prior to all the premium card from those two places.


23 posted on 02/25/2009 7:41:44 AM PST by ConservativeMind (Who is now in charge of the "Office of the President-Elect"?)
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To: Beelzebubba

Is AmEx really more as a percentage? I thought all the premium cards from Visa and MC were 1-1.5% more a charge, anyway.


24 posted on 02/25/2009 7:48:12 AM PST by ConservativeMind (Who is now in charge of the "Office of the President-Elect"?)
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To: kellynla

bfl


25 posted on 02/25/2009 10:05:12 AM PST by Titan Magroyne ("Drill now drill hard drill often and give old Gaia a cigarette afterwards she deserves it." HerrBlu)
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To: mikelets456

And if you live in Houston, you can get them to pay your balance off (Provided you buy a house in a ghetto).


26 posted on 02/25/2009 10:06:32 AM PST by Boiling Pots (The Gov't trying to fix the economy is like the Three Stooges trying to fix your plumbing)
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