February 27,2009
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News: AMEX Offers $300 to Those Who Qualify.
Good news for some credit card holders but perhaps, for the wrong reasons. When I read the news yesterday, I immediately called AMEX to see if I would qualify. The response was both, encouraging and discouraging. The conversation went something like this: "Well, Mr. Bailey, you're one of our most valued customers…[blah blah blah..]". You've always maintained an excellent credit card history…[blah blah blah..]". "I see your account is paid in full, even right now…[blah blah blah..]". Now, the bad news: "The financial incentive we're offering is for the ‘other' kind of people." These would be credit card consumers owing between $15,000 and $20,000 who have fallen into the ‘risky status'.
Still, it's not a bad thing. AMEX is, right now, offering a $300 incentive to risky credit card consumers who owe a lot, to pay their balances in full and then close the account. That's certainly fair and better than jacking rates, cutting limits and inventing new fees. You have until April 30 to take advantage of this. So, if you're an AMEX credit card holder and this applies to you, it's a good thing for several reasons. You can either call AMEX at 800.528.4800 or access their site online to ask about this. If fulfilled, you should expect to receive a $300 AMEX gift in the mail within four weeks. If you have rewards points stored up, you better us ‘em first.
It's Mr. Covey's ‘win-win' situation. AMEX are the nation's largest credit card lender in terms of amounts lent. They're hanging out there with a January default rate of 8.29%, up from 7.23% in December. They realize that most of their targets are also in default to other lenders and AMEX hopes to be the first (if only) ones to collect. That's a universal sentiment, of course.
The ‘win-win' is best summed up by Boston-based financial research and consulting firm, Celent's senior analyst, Red Gillen. Mr. Gillen describes this as "an interesting version of amnesty that benefits both American Express and consumers who are dangerously close to defaulting on their credit cards. By creating a sort of legally unenforceable primary lien holder position for itself." The consumers also win by receiving a discounted way to help keep their credit records clean. Everybody wins.