Credit Games: Adjusting Limits According to Where People Shop

In these terribly hard economic times—massive federal bailouts meant to loosen credit aside—lenders have to do whatever they can to protect themselves, and they are. Since the 1990s, they have been slipping universal default language into their terms and conditions. That allows them to change the terms of your loan (interest rate, credit limit and so on) based on how you do with other, unrelated creditors. Pay late on your Capital One card, the interest rate on your Chase card goes up. Universal default has been around since the heady deregulatory days of the 1990s, but until the recent economic crisis hit, it was not something that regularly came into play. Now it has, but at least it is based on something that the borrower did. Now we hear of a little tactic that American Express is using. They are examining where you shop. American Express is making the connection between merchants and their customers’ payment habits. Say you own a shop and you have—at least as far as... [Read Full Article]


How Can I Become a Bank Holding Company, Too?

Last time I looked, American Express was not a bank. They were a credit card company like VISA and MasterCard. However, unlike its revolving debt counterparts, when AMEX gave you plastic and you racked up debt, you had to pay-off each month. Because of this, American Express was a great card to give your college-bound teenager. It was a lesson in fiscal responsibility and living within your means. Those days, like so many other fine things here in America, are gone. Now, AMEX is a bank. The Bank of AMEX The change is not precisely unexpected. We live in perilous times with the government pumping out money at an unprecedented rate to “bail out” Wall Street, AIG, banks, the automakers, the mortgage market, so on and so forth. They say the next wave in the money-tide will cover credit card debt gone bad. American Express couldn't wait for the next crap sandwich of economic largess to be pushed down the taxpayers' throats, they wanted a bite from that or... [Read Full Article]