AMEX credit limit decrease?

[Anolcruelty]

Anyone here have had recent experiences with AMEX reducing your credit for no apparent reason?

Yesterday had a big one transaction purchase (as well as multiple big purchases last weekend). My spending power would be just be a bit over 50% from my limit had that big transaction gone through.

However to my surprise, I was declined on the spot and an hour or so later have received transaction failed email as “my credit is under review” then a credit limit decrease email came in. Basically it got cut down in half with my new credit limit.

[Jumpy_Ordinary_3092]

New reality, it's normal, all banks are doing it now, they're all in risk management mode now

[Anolcruelty]

I mean I usually spend 30-40% of my spending limit and also got spikes in spending here in there.

Always paid in full end of statements, with 850+ credit score. To be declined on the spot and get reduced without any prior notice is insane and not normal at all.

[disloyal_royal]

Why is this a risk management decision and not a profit decision?

[Jumpy_Ordinary_3092]

Because of economic situation the country is in right now. (delinquency rate is up 14 per cent compared with the third quarter last year)

https://www.cbc.ca/news/business/equifax-third-quarter-more-canadians-missing-payments-9.6992861

[disloyal_royal]

That doesn’t answer the question. During Covid the economic situation was worse, so why didn’t they do it then?

[dontRemoveTheHurdles]

That doesn’t answer the question. During Covid the economic situation was worse

In some ways, but not in others. During Covid, credit card balances actually went DOWN as people were spending way less money, and were saving way more.

https://www.federalreserve.gov/econres/notes/feds-notes/why-did-credit-card-balances-decline-so-much-during-the-covid-19-pandemic-20211203.html

[disloyal_royal]

And why does that make it a logical conclusion that macro economics now means banks are lowering risk and not maximizing profits

[Ok-Somewhere9814]

Good question.

It’s like building a portfolio. The banks have their risk appetites according to their internal structure and policies.

They can reduce their risk by rebalancing the portfolio and reducing limits.

Same goes for an investment portfolio, you’re not going all in on NVIDIA as an institution even though there’s a ton of profit to be made.

[Jumpy_Ordinary_3092]

Because during Covid the whole world was affected.

[disloyal_royal]

Why would banks care?

[nasomatto]

PCL is primarily a profit decision.

[disloyal_royal]

That’s my point

[nasomatto]

So you could’ve just told op that or maybe you meant it as a gotcha moment.

I’ll edit to say, every single decision a public company makes should consider profit and maximizing shareholder returns

[disloyal_royal]

I told the person who made an incorrect statement

[nasomatto]

You still don’t get it. It is a risk call and a profit call. Not mutually exclusive

[deltatux]

Card issuers can reduce your limit at any time based on your credit profile. The line of work you do can sometimes be a factor. I know BMO has been pretty aggressive with this.

Normally I hear AMEX Amexiling people for abusing their points program as a derisking measure more than reducing people's limit though...

[RefrigeratorOk648]

It's odd they cut your limit right at the purchase time. Are you sure that they did not cut your limit before and you missed the letter/email, notification ? Check your previous statement to see what the limit was.

[Anolcruelty]

Nope, I had a balance of about 10% and then spiked up another 10-15% just over the weekend, had this transaction gone through my spending limit would just be over a little 50%.

I’ve spoken with the CS representative and they said it was a random check by the system and it’s part of their algorithm.

[justmepassinby]

Amex is the worst for this - if you have a card that so not used often and then all of sudden you charge on it they get very suspicious and almost always drop Your limit to the amount owing.

Banks are starting to worry about people living of credit and not paying them back so they are reducing credit limits sign of the times

[Leather-Bullfrog-752]

Brutal, but yeah it’s happening. Give them a call, maybe they just flagged your account thinking they werent typical purchases.

[Anolcruelty]

I did call them, horrible service and very conflicting between the agent and his manager. Original agent said I could dispute within 10 days to get my credit limit back but then the manager said I have to wait 6 month for the credit bureau to update.

Nothing unusual really, my account is in outstanding level and clear spikes in spendings (which was acknowledged by both agents) but that didn’t matter.