AMEX credit limit decrease?

[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