Sunday, June 8, 2008

Amex Financial Review

This is part six in a series on Credit Card Education.

Part 1: General Credit Card Information
Part 2: Credit Reports and Scores Explained
Part 3: Building Your Credit - Your First Credit Card
Part 4: Fixing Your Credit – Tips And Tricks
Part 5: Where To Check Your Credit Reports And Scores
Part 6: Amex Financial Review
Part 7: Store Credit Cards
Part 8: Churning Credit Cards - Tips and Tricks

Part 9: Credit Cards With Great Signup Bonuses

Amex will sometimes perform a financial review on cardholders they feel are risky, where they freeze all your Amex cards and ask you to provide proof of income, usually bank statements and tax returns. If you don't comply, then they will shut down all your Amex cards.

This might be a problem for some people if:
1) You wrote a high income level on your credit card application, and can't back it up.
2) You don’t feel comfortable sharing your tax documents with Amex.

If you do get a financial review and it doesn’t seem like you will pass the review, or you don’t want to send them your tax information, (you can try calling Amex and see if you could get away without sending in the documents), then you should preemptively cancel your Amex cards.
Don’t wait for Amex to close them. If they do, it will show up on your credit report that Amex closed the accounts. This will lower your credit score even more than if it would be 'closed by consumer'. Either way you will lose the available credit, which will lower your score.

Reapplying for an Amex card: After closing your accounts, wait a few months before trying to reapply. Some people have been successful in reapplying for cards without having to send in any documents. (Some people claim that they were able to reopen the same card after a few weeks, I doubt that would be possible)

The following things may trigger an Amex financial review: These things may and may not cause a financial review. They are some of the things people have reported to have done before getting it.
- A credit line of $25,000 or more on a single card
- Your credit score suddenly dropping drastically
- Large balance transfers
- Big business line of credit and transferring hefty sums of money
- Spending more than your stated annual income
- Asking for credit line increases too often
- Overusing an Amex Business Card for personal purchases (Probably only a problem if you don't use a personal card as well)

If you have a few Amex cards and spend not more than a few thousand dollars a month on the cards (but definitely less than 50% of available credit) and you are not racking up too much debt, you shouldn’t get an Amex review.


Anonymous said...

they let me open my acct after a few weeks but they closed it again after a month

Shmuly said...

Did you reopen the same card, or apply for a new card?

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