AMEX Blue and the disappearing promo APR

Close Encounters of the Cheap Kind has a new home at www.CheapEncounters.com!

I just got an unpleasant surprise on my AMEX Blue statement. I had applied for this card last November under an offer of 15 months at 0% APR on purchases. As the reward program on this card is pretty good and 0% is almost always as good as free money, I applied for the card and was instantly approved. I had effectively secure over $10k of 0% credit for the next 15 months, or so I thought.

I looked at my statement online yesterday (closed on the 24th and I hadn’t received it in the mail yet) and found an odd line item at the very end of the transactions for finance charge in the amount of $0.50. Examining the finance charge section I found that the finance charge was on an average daily balance of about $26 at a rate of nearly 20%.

Knowing I should be under promo terms I call AMEX customer service, who informs me that my terms were for only six months. Although the offer stated 15 months, that term was the maximum and shorter terms could be offered based on creditworthiness. Sure enough, when I check the letter I received with the card in small print it notes that my promo APR is only in effect through my billing period ending in April. However, nowhere does it state that the shorter term was based on my credit history, nor did I receive any other communication from AMEX that an adverse action had been taken based on my credit history which is a direct violation of the Fair Credit Reporting Act (FCRA)

At this point I have sent a payment electronically to AMEX for the full balance due to limit the damage. My next steps will be to wait for the Membership Rewards points to post for all of my accounts (I have two personal accounts plus a business account) and cash them out. After I’ve made sure I haven’t left anything on the table I will then call up AMEX to cancel all of my cards explaining that their business practices are both deceptive and illegal and indicating that I will be filing formal complaints with the BBB and Texas Attorney General’s Office, and that I am also considering an action against them under FCRA. Hopefully that will be enough to have the finance charges incurred (finance charges will continue to be incurred on the balance until they post the payment, so we are talking more than $0.50) refunded and a little something-something given as “hush money”. Under FCRA I could get a lot more than that if I decide to take it to court, so hopefully they will decide to take the easy way out.

Lessons learned from this episode:

  1. Always remember that everyone is out to screw you.
  2. Be sure to verify the promotional terms in effect on your account after you get your card. Apparently what is stated in the offer they use to get you to apply doesn’t mean Jack Schmidt.
  3. If you are going to do these 0% balance transfer or purchase deals, always have the cash on hand to cover the balance in full. There is always the chance that either you will mess up and pay late canceling your promo APR, or you will be on the receiving end of a card company’s shenanigans. This situation sucks in that we will be out probably about $50 in interest charges from the time the statement closed and when our payment will be posted (represents about 12 days), but just imagine if we weren’t able to pay it off in full! At an APR of nearly 20%, the interest charges would add up very quickly.

May 1, 2007 - Posted by | Credit Cards, Customer Service, Scams


  1. Don’t cancel your cards. They don’t care a twit. What happens is that you are the one that gets hurt (and you can check on this with various on-line credit advice sites):

    Every existing credit card to your name that is in good standing is a benefit. It increases your FICO (Fair Isaac) score. When you cancel a credit card you impact your FICO–it is reduced. One effect of the cancellation, if you have an outstanding balance with one or more credit cards, you effectively decrease the ratio of debt to unsecured limit. For example, if your credit card debt is $1000 and you have three credit cards with an aggregate limit of $10,000, canceling one of the cards will reduce the aggregate limit and therefore increase your percentage of debt. That has an immediate effect on your FICO score.

    Don’t cancel the card. Just don’t use it.

    Comment by ERM | May 8, 2007

  2. Very good point, ERM. You are correct in that having the outstanding line is a benefit to the FICO, even if not used. I had considered this before and based on the number of cards I have outstanding and the size of those lines the effect would likely be very minimal. My thought is to use this more as a bargaining chip to get my money back, but if they don’t bite oh well. However, one card (Business Gold Rewards) will be cancelled at some point either way because of the annual fee.

    Comment by billyoceanseleven | May 8, 2007

  3. From my experience, cancelling your card is only good, if you can get a better replacement deal or another provider agrees to increase your current limit.

    Comment by tv bracket | April 5, 2008

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