In a recent article The New York Times' Rob Leiber exposes American Express of some questionable practices they have for monitoring the credit worthiness of its consumers. American Express has begun to monitor where people with "poor repayment" histories shop and decided to deny their cardholders usage in these establishments. Retailers where their customers have had a long history of not paying their bills may begin to lose business. The catch though is that American Express has refused to release a list of retailers where their cards are no longer going to be accepted. This would cause trouble for the creditor as the retailers would probably pull American Express service from their stores.
American Express has also begun to monitor the location and lender of its customers mortagages. If the lender is sub-prime or in bankruptcy they may reduce your credit line. This is unfair because due to the recent changes in the economy homeowners do not have say in who now owns their home.
For their small business credit line, American Express has decreased its credit line for business in certain industries. If the business is in a good industry like health care there are no changes, but if it real estate, construction, or finance the business may see a decrease in their credit line.
All of this may hurt one's credit score in a time where everyone's finances are stretched enough. Last year a subprime lender got into trouble for similar practices. The FTC acosted them for not exposing that they could lower customers credit line for patronizing certain establishments. American Express has denied that they judge customers based on the retailers they patron. They still proclaim that their measure to determine credit lines “has always been and still is the overall level of debt, relative to the card member’s financial resources."
I don't have an AMEX now, but it makes me doubt that I ever will.
