Question: I've enclosed a copy of a letter that I have written to American Express in which I make the charge that the company's stated policy of having no individual credit limit is untrue and that, as a result, as a new card holder I was both embarrassed and inconvenienced.
Shortly after I received my American Express card earlier this year, I made arrangements for a three-week vacation to Italy, and I was treated like a deadbeat. My application said AmEx would conduct a credit check, but it didn't say they would track me down when I reached some secret credit limit because my charge history was too new to form an opinion.
Since I was leaving the country the following day, I submitted to American Express and authorized my bank to verify that my balance would cover the airline charges. But I also vowed that when I got back (which I just did) I would do whatever I could to force AmEx to state up front what its "no credit limit" policy really means.
I wonder what the company would have done if I had left for my three-week vacation before AmEx had had a chance to call me. Would they have told the clerk in the store on Via Veneto that my card is invalid?
It seems to me that if American Express is so worried that new card holders might not pay their second bill (yes, I did pay my first), they should do a better credit investigation in the first place and not issue a card. But to submit a new customer to this humiliation for no reason--when they haven't even asked for payment--begs for action.--E.J.
Answer: In the light of your experience, there's no way in the world that American Express is going to convince you that, sure enough, there is no dollar limit on the credit available to its card holders. But that, flatly, is still the stand the company takes, and it's the principal difference between the AmEx card and the bank card--where a dollar ceiling is specified.
A spokeswoman for the New York-based company sympathizes with you and agrees wholeheartedly that you should have been able to charge your airline tickets no matter what the dollar amount involved was. "The big advantage in the card is being able to use it without worrying about some sort of ceiling," she said. (And, incidentally, you don't actually say in so many words, but the implication is there that you did indeed put the tickets on your American Express card once the bank verified your balance.)
But, she also admitted that there are occasional delays when an amount charged is "outside the individual's spending pattern." This isn't a dollar limit, she insists, but if an individual, for the first year of his membership with AmEx, has averaged card spending of about $200 a month, and then, suddenly, the card is used for a $15,000 package tour around the world, there may legitimately be a question raised.
Information on Resources
"Just because it's not in the individual's spending pattern," she added, "certainly doesn't mean that it won't be routinely OKd. But it may simply require a little more information on his resources. And, of course, we want to make sure that the card is being used by the person authorized to use it--that's for his own protection."
Even on those occasions when checking is called for, she added, "90% of these are approved in 60 seconds," and in no sense is it a reflection on anyone's credit worthiness.
"What we have, once a card member is approved, is a bond of mutual trust between us, and this gets stronger every year."
And, the longer you hold the card and the longer both your spending and paying habits become familiar to American Express, the less and less likely any purchase is going to run into even a 60-second delay.
To be quite candid with you, and without taking sides, I personally feel that you were, charitably, wildly optimistic to think that you could lay out a three-week Italian vacation on your American Express card--on the basis of one month's membership experience with the company--without having a few questions asked. I wouldn't have approved it myself without checking you out a little.
And speaking of "bonds of mutual trust," please bear in mind that there isn't a bank in town that will credit a $50 out-of-state check to your account until it's had 10 days to clear. Do you find that equally humiliating?
Q: I was in Las Vegas recently and saw something that started me thinking, but I haven't been able to find anyone who might clarify it for me. One night, at one of the crap tables, a high roller was having one of those runs of luck that everybody dreams of: He couldn't do anything wrong and the black ($100) chips were piled up around him ankle-deep. At a rough guess there were at least $40,000 or $50,000 worth of chips there.