American Express Change in Cardmember Terms, Rate Increases
It looks like Citi isn’t the only credit card issuer raising their rates… American Express enclosed a letter in our latest bill detailing a bunch of changes to their Cardmember Agreement. While I’ve reproduced the entire letter below, here’s a quick summary:
- Cash advance APR is increasing to Prime + 17.99%
- Late payment APR is increasing to Prime + 14.99%
- Default APR is increasing to Prime + 23.99%
- Foreign transaction fee is increasing to 2.7%
Here’s the full text of the letter:
Important Notice:
We are making several changes to our card products in response to the challenging environment and the increasing costs of doing business. These change include raising interest rates on some American Express cards and increasing the conversion rate for Charges made in forrign currencies. Please see below for details.
American Express offers a number of tools and resources designed to help you take advantage of all the benefits and features your Card offers, including the ability to make payments electronically or by phone free of charge, free alerts by e-mail or phone, and tips for using your Card. For more information, visit www.americanexpress.com.
Notice of Changes to Your Account
The terms of your Account are subject to change in accordance with the American Express Cardmember Agreement (”Agreement”) governing you Account (including increasing rates and fees, changing fixed rates to variable rates, and adding new terms). Any language in your Agreement contrary to or conflicting with terms amended herein is replace fully and completely. All terms of the Agreement not amended herein remain in full force and effect. These changes apply to existing balances and future balances on your Account. We urge you and any Additional Cardmembers on your Account to read this notice carefully and file it along with your Agreement in a safe place for future reference.
APR for Cash Advances
For billing periods that begin on or after December 2, 2008, the second sentence of subsection B of the Finance Charges section of your Agreement is replaced with the following:
“The APR for Cash Advances is the Prime Rate plus 17.99%.”
This is a variable rate. As of October 13, 2008, the Prime Rate plus 17.99% is an APR of 22.49% and a DPR of 0.0616%.
APR for Late Payment
For billing periods that begin on or after December 2, 2008, the first sentence of subsection C of the Finance Charges section of your Agreement is replaced with the following:
“Nothwithstanding the foregoing, unless a higher rate applies, the APR for all balances except Cash Advances will be equal to Prime plus 14.99% if during any Review Period any portion of any Minimum Amount Due is not credited to your Account by its Payment Due Date.”
This is a variable rate. As of October 13, 2008, the Prime Rate plus 14.99% is an APR of 19.49% and a DPR of 0.0534%.
APR for Default
For billing periods that begin on or after December 2, 2008, the last sentence of subsection D of the Finance Charge section of your Agreement is replaced with the following:
“The Default Rate is a DPR which correspond to an APR equal to Prime Rate plus 23.99%.”
This is a variable rate. As of October 13, 2008, the Prime Rate plus 23.99% is an APR of 28.49% and a DPR of 0.0781%.
Transactions Made in Foreign Currencies
Effective January 11, 2009, the bolded clause of the Transactions Made in Foreign Currencies section of your Agreement is replaced with the following:
“in each instance increased by 2.7%.”
Electronic Funds Transfer (EFT) Agreement
Effective December 2, 2008, we are adding a sentence to the last paragraph of the “In Case of Errors or Questions About Your Transactions” section of your EFT Agreement. The following is added after the third sentence:
“You authorize us or an agent to debit your Bank Account for this amount.”
Rebate
Effective January 1, 2009, the first three sentences of the Rebate section of your Agreement are replace with the following:
“Everyday Purchases” are Eligible Purchases made at U.S. locations of the following categories of merchants, excluding warehouse clubes and superstores: supermarkets, drug stores, and stand-alone gas stations. To qualify as an Everyday Purchase, the merchant must submit the Charge using the appropriate industry code, merchant code, or product/service code established by us. If the merchant submits a Charge using a different code, the applicable Charge will not qualify as an Everyday Purchase. Merchants with multiple locations may submit Charges at different locations using different codes. This means that Charges at some locations will qualify as Everyday Purchases, but Charges at other locations of the same merchant will not.
The good news here is that they’re not increasing the APR associated with regular purchases, so… As long as you play by the rules and avoid cash advances, little will change for you. Still, it’s good to be aware of what they’re doing. The other bit of good news for us is that they still haven’t reduced our credit limit, though they’ve nicked a bunch of other people with credit limit reductions.
Published on November 29th, 2008 - 25 Comments
Filed under: Credit Card News
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Amex *is* increasing interest on purchases. I made the same mistake in thinking until I turned over the page listing the other interest increases. They’re increasing purchases to 15.99%.
Comment by bonnie — Dec 2nd 2008 @ 3:54 amI got mine today, and I thought the same thing also until I read the other side.
They are raising my rate to 12.49% from 9.48%.
Too bad since 9.48% was a great rate.
Comment by Mickey — Dec 3rd 2008 @ 5:00 pmI checked my letter. There wasn’t anything on the back. Perhaps this differs from one cardholder to the next.
However, thanks for posting this letter.
It is good to know I’m not the only one.
I was searching the web to find out if anyone else had gotten this letter when I found this site.
Thanks again.
Comment by Mickey — Dec 3rd 2008 @ 5:03 pmMy letter says interest rates on “some” cards are raised
So maybe, I’m just one of the unlucky “some”.
Comment by Mickey — Dec 3rd 2008 @ 5:06 pmMy Amex card “only” increased APRs for Cash Adv., Late Payments, Defaults, and Foreign Currency Transactions.
I double-checked and saw nothing anywhere about my Purchase APR going up. So it could very well affect only certain cards/cardmembers.
Comment by Mooseboy — Dec 4th 2008 @ 5:31 pmI got my letter as well, and they’re going from 6.99 to 10.99%. I tried to call and opt-out, and they’re saying I’m stuck with it, even if I close the account.
Since I generally keep my credit balances on this account (because it’s so cheap!), it means another 400+ a year for me.
I’ve asked to have someone point out where my agreement says they can unilaterally increase my rates, even when I agree to close my account and they’ve said there is no opt-out. When pressed further, they said they’ll call me back.
I know they’re suffering financially, but this really isn’t fair!!
Comment by Jason — Dec 15th 2008 @ 10:04 amI carry a balance on their card and they’re increasing my rate from 9.99% to 12.99%. I don’t understand how they can legally make a unilateral change like this. My experience in the past has been a company will try to increase my rate, I opt out of the change in terms and as long as I continue to make payments in accordance with the original terms and don’t use the card any longer, they can’t change the interest rate. Am I wrong? Can they legally do this?
Comment by Kurt — Dec 17th 2008 @ 11:41 amApparantly they can. I’ve been on the phone several times with supervisors, to no avail.
The CEO of Amex testified earlier this year that they don’t raise interest rates just because they want more cash. They only raise them when the individual is late on payments. I guess they’ve thrown that out the window.
Congress is considering action to prevent this behaviour, you can write to -
House Financial Services Committee, Democratic Staff, 2129 Rayburn House Office Building, Washington, DC 20515 (Phone 202 225–4247)…
contact web page: http://financialservices.house.gov/contact.html
Also, if you want to write to Amex specifically and complain, you can do that at -
Ms Doria Camarava
American express
Aesc-ftl
777 american express way
Ft Lauderdale, FL, 33337
I will be writing. It seems like there is a lack of legal basis. I’m not an attorney, but I thought that contract changes required consent. Amex is unable to explain where my agreement says that they can make unilateral changes, but it does seem from researching it that it’s a common problem lately, among several credit issuers.
Comment by Jason — Dec 17th 2008 @ 2:44 pmI just received the letter regarding my interest rate increase along with a notice from Blue stating that my credit limit is going from 10K to $4400. This is totally reidiculous and unacceptable. In the statement they claim, among other things, that the decision was based the fact that my debt is too high with AMEX. That’s total BS because I just made a $4000 payment in May bringing my balance to $0.00, which is where it has been until the last month or so because of Christmas shopping. They also refer to my credit score from Experian, which again is bogus because my most recent Experian score is 721. I am soo sick and tired of these coporate sleezebags sticking it to us that are just trying to get by. I will be contacting AMEX tomorrow and if i do not get any satisfactory answers, I will be contacting an attorney. If someone has already initiated a class action lawsuit, PLEASE contact me.
Comment by Kendall — Dec 21st 2008 @ 9:47 pmI had a late payment on my Am Ex card last month(5 days late)…They charged me $ 38 late charge and increased my annual rate to $25.96%…an increase of almost 11% meaning about $1200 EXTRA a year…They are like doing business with the mob…I am going to transfer balances and do business with my credit union that has been 9.75% for the last 10 years…The difference on interest on these two similar balances between AmEx and Credit Union is an extra $182 per month…Just think if consumers had that extra money to buy basics or spend in our present economy…We wouldn’t need to be bailing out these finiancial institutions that cant’t manage themselves and it would be much easier to manage our finances
Comment by Gary Boroski — Dec 30th 2008 @ 11:22 amI just got my Jan. bill and noticed the increased interest rate. Had to did through my past bills to find it in small print about the interest rate increase. I can’t believe there is not an opt-out option. Capitol One did it to me in the past trying to increase from 6.9% to 11.9%. I used the opt-out. It closed the account, but I was still able to pay it down monthly just as I had been doing.
Right now, many people are hurting or worried about their savings and future. I think Amex is taking advantage of this by doing this at this time and not providing an opt-out. They are hitting these people when they can not afford to just pay off the balance or transfer it to another card, and they are sticking it to the ones who actually make their payments on time.
Comment by James — Jan 18th 2009 @ 3:56 pmI saw that American Express increased my rate by 3%. I called and they said that they had send a letter in November. What great timing. With all the Christmas expenses, college tuition and work stress. I usually vote with my feet when these things happen. This is the worst I have ever been treated by a credit card company as I always pay on time, even if it might be the minimum. I am closing all my cards down except for the credit union. They are the best.
Comment by GT — Jan 22nd 2009 @ 12:42 pmI got a 3% increase in Jan. from 9.9 to 12.9%. No warning, no explanation. I’ve been a card holder since 1981, never a late payment. Called a customer service rep and was basically told “tough luck”. I’ll keep writing and calling.
Tom
Comment by Tom — Jan 25th 2009 @ 12:31 pmThe same thing happened to me. I am a good customer and they raised mine as well to 12.9% and told me tough luck as well. I thought the supreme court was making it so they couldn’t do this. In this economy this doesn’t help.
Comment by Shannon — Jan 25th 2009 @ 2:47 pmJust noticed I went from 6.99 to 10.99.
Although when i called the CSR said my rate was prime plus 6.99 which would only be 10.24 right now???
I’m pissed, but I cant afford to close this account, I need the available credit in my portfolio it will help get a better rate when I build my house.
Comment by Jon — Jan 26th 2009 @ 2:31 pmI’m in the same boat as some of the others. Rate was increased from 9.99% to 12.99%. Called customer service was told they have the right to change rates. I don’t have my original paperwork or marketing information that prompted me to apply for the card. But I recall what I liked about it was the 9.99% was fixed for life. Does anyone have a copy of their original agreement or marketing information. I smell class-action all over this one.
Comment by Tim — Jan 28th 2009 @ 2:46 pmI just got an increase without notice. Their
original agreement is extremely vague,
and sure this is illegal.
BUT UNTIL CONGRESS GETS THEIR STUFF
TOGETHER, WE WILL BE HIT.
IT IS VERY SIMPLE: THE BANKS RIPPED OFF THE
PUBLIC AND WROTE BAD CONTRACTS; THE BANKS
GOT BAILED OUT; THE BANKS ARE TAKING ALL
THEY CAN GET THEIR HANDS ON AGAIN; THE BANKS
ARE RIPPING OF THE PUBLIC AGAIN.
WHAT IS EVERYBODY MISSING?
WE ARE THE VICTIMS OF A HUGE PONZI SCHEME
WHICH IS GOING ON AND ON AND ON!
THE BANKS ARE LOOKING TO TAKE YOUR RETIREMENT,
SHAKE DOWN THE AMERICAN PUBLIC, AND PUT YOU
TO WORK FOR THEM.
GET A CLUE AMERICA AND CONGRESS!
YOU BAILED THEM OUT, THEY INCREASED YOUR
RATE, SCREWED YOUR CREDIT, WROTE BAD LOANS,
TOOK A BAILOUT, NOW ARE ASKING YOU FOR MORE.
TAKE A GOOD HARD LOOK.
Comment by bb — Jan 28th 2009 @ 9:49 pmI recieved my December statement and noticed an increase from 6.99% to 9.99% on my Amex Blue Card. I’ve never been late and have outstanding credit. I looked through all of my past statements to check for a change and opt-out notice. I came accross the Nov. 08′ statement, which said to check pages 7 & 8 for new changes. How nice, there was no page 7 & 8. I called to ask what was going on and to request a duplicate copy of the Nov. statement. I recieved yesterday and saw the increase notification with no opt0out option. I called to find out the scoop. Basically, I was told everything all of you were told. No opt-out is possible and they can raise our rate whenever they want, to whatever they want. This is absolutely criminal. I have already had to deal with Advanta Bank (worst ever), and Citi, regarding similar situations. Citi atleast allowed me to opt-out. WE NEED TO DO SOMETHING ABOUT THIS AND HOLD THEM ACCOUNTABLE. This situation is a prime candidate for a class acction suit. I have also talked to other friends with Amex cards and it seems as though people with good credit are getting hit the hardest, because Amex knows we will pay.
Comment by Mike Palmer — Feb 3rd 2009 @ 2:03 pmI just received my Feb. bill and found my interest rate had increased from 9.99 to 12.99. Called them and they said the same as they have to all of the above, basically “too bad, it is what it is.” I have been a card holder for a long time and have never had a late payment. I also thought Congress was going to protect us with the loudly touted bill passed recently to protect credit consumers. Of course it doesn’t go into effect until July 2010 - I guess they have to give the banks time to get all they can from us. Previous to this rate increase, I also received a limit decrease, again for the same reasons as stated above. I’ve had it with American Express. There must be something we can do. I agree, is there a class action suit??
Comment by Rich — Feb 9th 2009 @ 10:03 pmI just noticed the 3% rate increase on my AMEX Blue.. with current lending rates and economy I am not sure why they are allowed to increase the rates? Is there anything we can do here?
Comment by vk — Feb 20th 2009 @ 12:14 pmI just noticed the 3% increase in my Feb statement. I called and got the same answers everyone else is getting. Supposedly they had an insert in the Nov statement, I have the statement but no insert (did anyone get one?) I was told they have the right to raise the rates anytime for any reason. Now I haven’t been late on any payments but Amex went ahead and lowered my limit in Dec 08. I just ran a check on my credit rating and found that due to Amex’s decision to lower my rate. it also lowered my credit score by 12 points.
Comment by jds — Mar 1st 2009 @ 2:30 pmI couldn’t believe what I saw. My balances are going down each month, I’m paying everything on time, but because Amex decides to lower my limit for what I believe to be unjustified reasons my credit score takes a hit?!? Now I find that they are raising the interest rates, when the prime is at the lowest rate that anyone has ever seen. Even at 9.99% or 10.99% Amex is seeing the largest margin spread for profit than they have seen in years.
To me this is just plain profiteering, now during natural disastures, state and local authorities seem to be able to stop these kinds of things, so I would like to ask, where are the federal authorities when a company is doing this on a national scale? Passing laws that won’t take effect for 18 months?
Congress can put a bill together and pass it in less than a few weeks that will give over $700B to the banking industry but they can’t put something together to protect the average citizen from companies like Amex in under 18 months?
Okay, I’ve had my say, so I’ll step down from the soapbox now. Thank you all for listening.
I’m so glad I found this site. At least now I know I’m not alone. We have owned a home and had credit cards for 28 years. We have (had?) a very high credit score. We have never had one late payment and have never missed a payment. Am Ex cut our credit limit from $28,500 to $500. Capital One changed our low, fixed APR to 15.9 variable. I’m dumping them all as soon as I can. Am Ex is already gone - we didn’t have a balance on their card. Transferred balance off Capital One. They were making some money on us - now they will make 0. Does that make business sense to you? Doesn’t to me. I’m getting my house in order and dropping them all. They need customers to survive. We don’t need them to survive. I’ve started a letter writing campaign - to CEOs, the President, etc. I don’t expect it to change anything but it sure makes me feel a little better. I thank all of you for writing so I don’t feel so alone in this mess.
Comment by C. L. King — Mar 4th 2009 @ 8:35 pmI have been a loyal customer since at LEAST 2001. I pay my bills and have 4 different credit card accounts. I have an 800 credit score and my one card had a 50+K limit with a 6.24% rate. They now reduced my credit line to $49,400 and raised my rate to 9.24%. This decision was not based on ANYTHING that I did at all, and simply put I am pissed. I called and talked to an employee today and was told that they will not reduce it, AMEX made that decision to raise everyone’s’ rates. I of course asked for a supervisor as I charge over $100K a year with them and was told the same thing. It was like they didn’t care, they told me it was in my February statement. I do NOT want their terms, and simply put I will not be bullied like this. I called the NJ AG’s office, who referred me to the Office of the Currency Controller then they referred me over to the FDIC as Centurion Bank is not a National Bank. I will sue them if need be, and I think this will be the case. I am a Pro Se litigant and a very good one, but this is my last resort. I am a Bank of America card holder and stock holder and I love them, but my days with American Express are done. Here is your warnings folks and think twice before you use the company and I will not accept them as a business owner from this point forward. I am pissed, but I am a loyal customer if treated right, and they have in my opinion been erroneous in this decision. This is NOT over, you can google my name and see I have been successful even at the Appellate Level and even have a published opinion in NJ Pro Se on a Federal Case USC Title 47. Gary
Comment by Gary E. Meyer — Apr 16th 2009 @ 3:28 pm5/11 AMEX hiked my 9.9 to 12.99 and I have NEVER been late!!
Comment by Dannette — May 11th 2009 @ 7:59 pmI called when I got my April bill and spoke to someone who was clearly overseas. Sent email, and more email, and all I get is sorry we can’t change it. GRRR! I’m writting letters, making copies and I’m going to keep mailing them once a week until I get attention and my rate put back PLUS a credit for the extra interest added!! BOO AMEX!!!