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-   -   So what does AMEX know? (http://www.early-retirement.org/forums/f27/so-what-does-amex-know-42813.html)

WanderALot 02-27-2009 07:57 PM

So what does AMEX know?
 
I'm sure most have heard about AMEX offer to certain card holders who hold a balance: They'll give you $300 if you pay off the balance and close the account.

American Express' $300 Deal Shows Industry Trend : NPR

This seems to be a smart, proactive move considering $300 is a relatively small amount to remove card holders who they consider a high risk of default.

What I find interesting however is they have a similar offer to AMEX Business card holders. It looks like they have offered to refund large portions of the interest that has already been paid by the card holder provided they pay off the card. Some people on the net have received offers of refunds in the thousands.

This is a little troubling. It seems to indicate that AMEX thinks things will REALLY hit the fan very soon so they want to clear the books. The $300 offer seems to be a good idea for them, but when they start giving back interest payments in the thousands.

Maurice 02-28-2009 04:37 AM

Seems odd to me. I would imagine they'd have a huge adverse selection problem.

ziggy29 02-28-2009 10:00 AM

Well, I look at it this way: Let's say you "invested" $10,000 in some entity that had no collateral or equivalent to FDIC insurance.

And let's say you're hearing a lot of reports and seeing data that suggest the entity where you deposited said $10,000 is getting weaker and weaker, and if they go under, you lose everything.

You CAN pull your money out now, but there's a $300 "early withdrawal penalty," sort of like a 3% surrender charge.

Do you eat the $300 fee to ensure the safety of the rest of your money? Or do you stick it out and hope for the best, knowing you could lose it all?

mickeyd 02-28-2009 01:27 PM

If I had an AMEX card and they offered me $300, I'd take the deal in a heartbeat. It's not like I only have one CC and AMEX is somehow unique in it's services.


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