http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x4211040Oh my.
IdaBriggs Donating Member (1000+ posts) Fri Oct-10-08 12:54 PM
Original message
Personal 'Credit Crisis' Experience -- American Express Story
This summer my husband and I purchased a foreclosed property in a great neighborhood in Michigan. I won't lie -- we got a GREAT deal, and even better, it was a guilt-free situation, where an investor had been scamming the bank/collecting money from tenants (he lost title in September of 07, and they had rent receipts in April of 08), and in general, robbing people.
Part of why we got such a great deal is that the house was in awful shape. So far, we've done foundation work, replaced all the cement (garage floor, driveway, porch, patio, etc.), replaced the roof, the windows, the electrical, the plumbing -- you get the idea. We've gutted the place, and if there is any original drywall left, its only an accident! LOL!
Since we forgot to be born independently wealthy, we've funded this project with a 203k rehabilitation loan. Its been a paperwork nightmare, especially when you consider the end result is going to be around $140K worth of repair, but we keep chanting to ourselves: Its going to be beautiful when its done.
This is a construction loan, with 'guaranteed' funds already in an escrow account, but we still have to either put the money out in advance and wait for reimbursement, or sweet talk our contractors into waiting. Some things can be put on hold, and others can't, which is why we've been using the American Express card -- or been TRYING to use it.
The first problem came when I tried to put the appliances on it. We'd already put about $8,000 on it in the previous weeks, and received a call asking if we were aware that it was getting up there. We assured the caller that things were under control, and explained we were doing a rehab. They marked something on the account (this was a Monday), and that Saturday, rejected the charge for the appliances.
Phone calls ensued -- they said they were using the previous six months balance as a determination, and since so many people were getting in trouble with credit, they were suspending the account until it was paid. (Did I mention it wasn't due for another three weeks???)
The appliances still had to be paid for, but now we had to come up with the cash for them. We juggled the first draw, and delayed paying off the Am Ex people until the second draw since they weren't even due yet. Then we paid them off, and I had a scathing conversation where I inquired as to whether they were going to let me use the card for the cabinets ($6500) or whether I should pay cash. They agreed to 'allow' me to use up to $5,000. I ended up paying cash for the cabinets, and held the $5K in reserve for the other expenses that were going to be happening.
We spent another $2,600 and then I placed an order for a Home Depot delivery ($1,152.67) today. Imagine my surprise when the charge was DECLINED by American Express.
Seems there has been a 'change' in our credit score in the last month (WTF?) and they are not extending credit until our current balance WHICH ISN'T DUE UNTIL NOVEMBER 19th (because it happened on the billing cycle which closes October 19th) is paid -- despite the 'you should be good up until $5,000' conversation LESS THAN THREE WEEKS AGO.
But if we wanted to use it up to the $2,600 amount, we could pay them RIGHT NOW, and they would release the funds for us to 'keep using it' and I *believe* them -- NOT!!!
Did I mention this account has been open since 2000, and has been paid on-time, etc. consistently? Did I mention they keep explaining the problem is that we don't usually run 'large' balances, and they base stuff on the last six months, when we were averaging about $20 per month (but we did use it to the tune of thousands regularly a few years ago)?
Did I mention they are now 'checking' our credit scores monthly, and 'today' was the day it was updated with our 'lower' score (because an account was paid to a zero balance)?
This is me banging my head on a wall. This is me being REALLY pissed off. This is me getting nowhere with American Express.
I've shuffled funds, and we're managing to make things work. We're about three weeks from being done on the rehab, and when we are done, I'll be cutting up the American Express card.
They explained it to me very politely and condescendingly:
There is a credit crunch going on.
We'll go back to paying cash from now on -- BITE ME, AMERICAN EXPRESS!!!
First up to bat: the stupidest person on the whole entire internet, Doug's ex-wife:
sfexpat2000 Donating Member (1000+ posts) Fri Oct-10-08 12:59 PM
Response to Original message
1. They pulled my mom's card in June WITHOUT notice.
Their reason was that she carried too much debt, which makes no sense to me if she pays it off every month?
She's had this account since the early 80s. There was no talking to them. It was the damned thing I've ever seen. AE has always been the smartest, most attentive of the CCs.
Oh now, surely American Express notified Doug's ex-mother-in-law that her credit was being pulled, but Doug's ex-mother-in-law didn't bother opening her mail.
RollWithIt Donating Member (1000+ posts) Fri Oct-10-08 01:01 PM
Response to Original message
2. I run anywhere from $5000 to $20000 a month on my Amex Gold Business Cards....
Basically we flow expenses for 2 storefronts through 1 card. Anyways, just a story about Amex. Two months ago, I scheduled an online payment through Amex and set it up for the day after the due date on accident. So the day after the due date they suspended all my accounts without notice and called me asking where my payment was at.
Needless to say if words could kill, the person who called me would not be alive currently.
Cronus Protagonist (1000+ posts) Fri Oct-10-08 01:02 PM
Response to Original message
3. Back when I had a viable business I stopped taking AND using AMEX
For much the same reasons. You can't trust what they say. And when something goes wrong, they ring your phone off the hook. Amex is dead to me.
The Fat Che in the punchbowl, questioning the alleged virtue of the Idiot Briggs primitive:
DaveTheWave Donating Member (1000+ posts) Fri Oct-10-08 01:02 PM
Response to Original message
4. "it was a guilt-free situation"
Would the former tenants agree? Now they can't even borrow money to move once they got evicted. But not as big a tragedy as compared to you not getting your appliances I guess.
"It's only a recession if your neighbor loses their home but it's a depression when you lose yours"
IdaBriggs Donating Member (1000+ posts) Fri Oct-10-08 04:26 PM
Response to Reply #4
7. I have been in communication with the former tenants -- who were paying rent to a guy who didn't own the property; they have been assisted into housing by the realtor who had to spring the news on them that the guy they were making payments to a) hadn't paid a dime to the bank in 2-1/2 years, and b) hadn't owned the building in over six months. They were out of the property BEFORE we even looked at it, and are actually happy about it due to some unpleasant personal life events that took place while they were there.
For me, it was (and is) a guilt free situation -- an out-of-state bank sold us a property that WE are fixing up (did I mention the water in the basement, the hole in the roof, and the crumbling foundation?), the tenant was able to recover six months worth of rent, the 'owner' of the building pocketed money for a couple of years, and the neighbors are thrilled that a neglected eyesore is being taken care of again.
This isn't a situation where a family lost their home due to challenges -- this was a 'no money down' investor pocketing money for a couple of years while neglecting rental property. He made some serious cash on the deal, and if I was a crook, I'd think it was a great swindle! LOL!
Rather than think of the appliance situation as a 'tragedy' I prefer to think of it as humiliating frustration due to the Am-Ex people being morons. But if you want to pretend otherwise, that is your concern.
And yes, I would consider living without appliances (stove and refrigerator, especially) a tragedy! LOL!
stopbush Donating Member (1000+ posts) Fri Oct-10-08 01:16 PM
Response to Original message
5. I WAS an Amex cardholder since 1986. Platinum Optima & Gold Amex.
I ran up about $8,000 on the card last summer to cover cash flow problems (I was doing freelance work and wasn't being paid in a timely manner by clients). I was a couple of days late on my minimum payments two months in a row, so I started getting nasty calls from Amex. When I finally got paid by my clients, I paid off my entire balance with Amex and canceled all my cards. Of course, they wanted me back, but I told them to take a hike. Haven't heard from them since.
I'm currently down to one Visa card which I'm paying down to a zero balance, and my debit card, which is the card I use for almost everything. We came through some tough times the last couple of years and have made a concerted effort to eliminate our cc debt. Now, we're down to about $6,000 in total cc debt, which I should be able to pay off in the next 12 months, provided my job doesn't go south.
I know that paying down to a zero balance is BAD for your credit score, but I don't really care at this point. I've seen my score go from over 700 to the pits in the last two years, and I've decided that I'd rather get rid of all those cards while I can and ride out this disaster as debt free as possible. We just sold our home in a short sell (it was on the market for over a year), and though that's better than being foreclosed, it's still a hit to the credit score.
It's tough to basically be on a cash basis, but it's nice to not be running up interest charges on multiple cards. And, yeah, we're renting these days as well. Home prices in OC, CA are not in the range of those of us earning in the low six-figures. The 3-bdrm home I'm renting was on the market for $840,000 before the owner gave up and decided to rent it.
Good luck with your new home. I hope you enjoy it, despite the crap from Amex.
Barack08 (147 posts) Fri Oct-10-08 01:19 PM
Response to Original message
6. The credit crisis has yet to substantially hit personal credit.
But your story reminds us that it is very close.
Some people are going to be in for a rude awakening in a few weeks.
Especially for the primitives, who always find hard cash for their neighborhood marijuana profiteer, but depend on a credit card to buy groceries.
