Jesse Gilleland makes payments on his American Express Platinum card on time each month—and has even reduced his balance by $15,000 since 2007. But in April American Express informed the Stafford, Va., computer consultant that his card would now have a new, lower credit limit, which the company set at just $500 more than Gilleland’s balance.
Why? The letter cited AmEx’s experiences with other consumers who shop at places where Gilleland recently used his card and with customers who had home loans with his mortgage provider.
Gilleland, 38, says that nothing about his financial situation had changed. “What changed is their standards,” he says.
American Express spokeswoman Lisa Gonzalez says that a number of factors are used to assess customers’ credit worthiness, especially in the current economic conditions. She would not specify which merchants or mortgage providers raise red flags for the company.
Linda Sherry of the Washington-based advocacy group Consumer Action recommends that consumers monitor their credit reports, pay bills on time and hold outstanding debt at less than half of their available credit to prevent credit limit decreases.
Michelle Diament is a freelance writer based in Memphis, Tenn.