my amex credit line just decreased from 10k to 500

I just found out this week that my credit line on my AMEX Starwood went from $10,000 down to $500. My AMEX cashback card went from $25,000 down to $5500. My AMEX Delta card went from $10,000 down to $2000.
I called Amex, talked to 3 supervisors, here is the scoop. AMEX pulled my credit report 2 months ago, and found I had too much credit. They said if I decide to use up all my credit line, it would top 1/2 million and that's too much risks for Amex, so they drop my credit line across the board.

I must add I have not done anything drastically within the last few years. I've always had the same number of credit cards, probably just like all of you here. applying for all the cashback/mileage/points cards I can get my promo points on. I've always pay off the balances, never been late once on payment. I got over $3000 back last year from my AMEX cashback alone.

The top supervisor recommend me to cancel few of my credit cards. I always thought it is better for your credit if you have more credit line, but less debt. by cancelling the cards I don't use, I would acutally cut down my credit line, so my debt/credt ratio will actually go up !! don't make sense to me. Just to add, my score have been over 700 for the past 5 years.

I just pulled a report from Equifax, and here is what I got:
Your FICO score of 741 summarizes the information on your Equifax credit report as of September 12, 2003. No negative items at all


Has this happen to anyone here ? is it really that I have too many credit cards with too much open credit? or am I not a revenue generating customers for them, since I pay off my balances every month (and get all my Starwood point and cash back)?

different cashback cards?

WalStMonkey said:

<< "I got over $3000 back last year from my AMEX cashback alone."

Pretty darn good trick considering that eligible spending tops out at $50k. >>

I do have the old cash back card, with no limit. Not the new one with 5% back.

probably they saw that they're actually PAYING YOU to use their card... and this was their way of saying F-YOU.

you can ask them to reallocate/ redistribute the credit lines if you use any one card more heavily than the others.

DeGlass said:

<< you can ask them to reallocate/ redistribute the credit lines if you use any one card more heavily than the others. >>

AMEX cut my credit line on all of my 3 AMEX card. although Starwood was the worst from $10,000 to $500.

First USA recently tried to minimize their risk with me, I had several high limit cards with them and they simply did not send me a new card when one expired. Since it was my oldest card, I called in and told them to reactivate it. The CSR seemed reluctant but they did, and kept the same credit limit....

Heres a related AMEX question- we have seen past reports that AMEX wants to start seeing financial documentation when issuing credlt limits exceeding $20k...can anyone confirm? Bellwilliam, did they ask you for anything when issuing you a $25k line? Currently my AMEX cards are just below $20k, id like to reallocate from the ones that dont have rewards, but dont want to trigger any flags by making the line on any one card too high...

Just to update:

found out my wife's AMEX Cash back's credit limit just went from $17,000 down to $7,000. My name is on her account too.

I had Fleet Fusion raise my CL to $13k a year ago, then I took a 0% deal for this existing card they offered to buy some bonds, and then as I paid it off min monthly payments, about 6 mos later they cut my CL to just about $500 above my current balance (about $11k at the time). I eventually paid everything off whent he 0% term ran out later in the spring, and then they cut my limit down to $500 TOTAL about two months ago. Reason each time given was "after a review of your credit report, your credit profile has changed ..." or some such thing.

I guess I really didn't blink, I had around $100k of balances across numerous cards through most of the last year, I figured that's what they freaked about. Oddly though, no one else cut my limit, not even AMEX (green cash rewards) -- no one except Kohl's department store card that is, a card I forgot I even had, they cut me from $2K to $100; I simply called & cancelled it at that point. Also, it's odd that they raised my limit in the first place, as I had maybe $50K of balances then -- I guess they didn't pull my report as part of that decision. Finally, my wife had (has) equally heft balances from 4/03 on, no one has cut any of her limits yet.

BTW, I will repeat what I always say, the credit score is bogus IMO, it is designed to distract consumers from looking too closely at their report & contesting errors ("Oh my score is 741, so it must be OK!" I think my score was well over 700 when Sears was erroneously reporting I was many months delinquent on payments during a card number theft problem I had a couple years ago -- and believe me, NO ONE was giving me ANY credit then). Major credit providers run their own algorithms, they probably don't even look at the score.

Alcibiades said:

<< From 13k down to $500 on Fleet Fusion. Thats pretty drastic. >>

Yes, I thought so too, particularly since I have never missed a payment on ANY card. How bad a risk could I really be??? But I think bellwilliam's experience is even more "drastic."

MarkM said:

<< Alcibiades said:

<< From 13k down to $500 on Fleet Fusion. Thats pretty drastic. >>

Yes, I thought so too, particularly since I have never missed a payment on ANY card. How bad a risk could I really be??? But I think bellwilliam's experience is even more "drastic." >>

sorry, but it makes me feel better that I am not the only "chosen" one.

AMEX called me early this am and requested documentation to support my cards with a CL of $27,000 total. They want me to fax last years' Fed Income Tax Form and the last 3 months of bank statements within 15 days. Meanwhile, they put a hold on the two cards and I can't use them. I don't remember ever having to do this before but they said it was because I am an Optimum customer or something like that.

Luckily, I had just charged a 5K savings bond on one last night and they said that charge went through. One card is the cash rebate card with a zero interest balance of around 7k that is due to be paid off December 1. AMEX said they will pull a soft inquiry.

At least it's a soft inquiry as I have had way too many hard inquiries since getting in on all these good deals cards posted here on FW. Will post outcome in case anyone's interested.

Wow, perhaps this AMEX business warrants its own thread (or perhaps OP wants to edit his title?) since it sounds like a change in policy that could hurt many FW members...

SIS, I share your concern. I have a $22,000 blue line that was just bumped up this week $10K by a new BT promo; a $20K Cash Rebate line; a $25K Starwood line where I'm an AU (wife is primary), another $30K Blue line with me an AU, a Costco Business charge card, and a $25K BLOC. I was planning this week to move $20K from Blue to Cash Rebate so that I'd report a $40K limit to the CRAs, but now I'm reluctant to try this...?

I'm also surprised they haven't cracked down on me yet. Perhaps one reason is that my utilization percentage is always low (unlike MarkM's and perhaps others, maybe?) SIS, your percentage is quite low too, and AMEX hasn't yet bugged you, right?

tabalard, sorry to hear about the nasty surprise they gave you! Was your utilization of the $27K from AMEX (or any other lines from other card issuers) fairly high?

If OP would rather not have this thread moprh into a discussion of this, and no one else with experience wants to take up this subject, I'll start a thread on it.

Part of the reason I suggested a new title/new thread was that I was lucky to return to this thread only by chance, not thinking it was more than an idiosyncratic case based on my earlier trip and not having more advice to give. Are there other threads that deal with this policy? I gather from some of the posts here that AMEX might not be alone in this?

The ONLY time I've ever had any CLs reduced was back in early 2000, when I maxed a Blue CL to make a CitiFi deposit (those were the days!), and unwittingly drove my FICO below 600 in the process...

Thanks for the heads up....recently Optima sent a 5.9% fixed, no transaction fee offer that promised to raise the credit limit by 10K dollar for dollar of BT. That's a very generous offer. I was....but now will have to think twice about taking this offer. I sure don't want to jeopardize my existing credit line with the cash reward card.

Thank you tabalard for sharing your info!

We can discuss this in detail on a more appropriate thread, but I think the reason they've cracked down on you is that your credit profile looks risky--even though your circumstances explain it. If MBNA and worldperks are all you have left, and MBNA is 90% utilized, you look like someone who's financially pressed.

This is consistent with SIS and my not being bugged so far, although it isn't with the line bellwilliam originally got from the AMEX CSR, as stated in his original post. bellwilliam, did you have high utilization on any of your lines (buying bonds, for example) that might have tipped them off?

Testimony from additional FW members should corroborate or refute this theory...

1/2 a million is a lot of money for a total credit line. I am surprised they dropped you down, though. cut up some cards. that high of credits line can really get you in trouble. Just keep a few of the ones you use most often.

Where is it written that items purchased cannot be resold? Is this common for all credit cards or just AMEX?

bellwilliam said:

<< another issue, For the past few months, I have been spending about $20,000 a month on Dell (thanks to Fatwallet) using my Diner's card. Diner had to call me to verify a charge, called me on my work, my operator picking up announcing my computer company name. BINGO !! got caught !! Diner's CSR told me that I am not allowed to resale, so no more Dell charges. May be this is the same thing with Amex, I believe they also don't allow resale. >>

uhhh, what has Diner's to do with Dell policies? And how would Diner's CSR know you're buying Dell merchandise for resale? You could well purchase it for your company. Sounds real fishy!

DaveHanson said:

<< bellwilliam, thanks for the details.

Have you reapproached AMEX yet about restoring your old lines, based on what you just closed?

Those 100-150K monthly charges have occurred for some time now, I gather? Assuming so, it's even more odd and worrisome that they did this to you, since you should show up as a relatively safe risk. And it will not approve your credit at all to up your utilization like that.! >>

I have not yet approached AMEX about restoring my credit line. because I have actually been charge (on other cards) more lately, so I thought I should wait till I have less charges, and wait till most charges clears of my records.

some interesting reading at the amexsucks.com discussion boards...

while the majority of people there are just spouting off about amex, there is some info on these types of things