AmEx Offers Some Holders $300 To Pay And Leave

[radfringe]

Source: CNN-Money

American Express Co. (AXP) is offering a $300 incentive for customers to cancel their accounts as the card issuer and payments processor grapples with surging loan delinquencies and reduced card-member spending.

The move comes as credit rating firms have warned that rising credit-card delinquencies could push the industry's charge-off rate into the double-digits by the end of the year from December's record level of 7.7% amid higher unemployment and a bleak economic outlook.

"It's a tool that has been used in the past to motivate borrowers to close off balances," says Scott Valentin, an analyst at FBR Capital Markets. Valentin cited an instance some years ago where National City offered $200 to borrowers who would close their home equity lines of credit.

"It's not necessarily cheap, but it is effective," says Valentin. "The key is to identify the high-risk borrowers."



Read more: http://money.cnn.com/news/newsfeeds/articles/djf500/200902231530DOWJONESDJONLINE000511_FORTUNE5.htm

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American Express is offering a $300 prepaid card, which can be used anywhere American Express is accepted, to certain customers who pay off their entire balance between March 1 and the end of April. Enrolling in the deal automatically cancels the customer's account, regardless of whether the borrower successfully pays off the balance.

[geek tragedy]

1. Wow, that's desperate. n/t

[Robbien]

2. This is only being offered to delinquent account, right?

otherwise what is the point?

They would be losing people who can afford to pay and be left with people who cannot.

[radfringe]

3. I'm guessing it's for those that can pay it off..

--snip---

A potential problem for the company "is adverse selection," says Valentin. " The risk is that the ones that take $300 and close their balances do have the ability to pay, and the ones left behind that don't take the $300 anyway couldn't afford to pay off their balance."

American Express' offer is only valid for customers who receive a mailing with a registration code from the company, and was advertised as a way for people to "simplify your finances."

[Raineyb]

4. Anyone taking them up on this offer should watch out.

No doubt AmEx will be sending them some kind of tax form come January of next year.

Regards

[Sherman A1]

9. I think under $600.00

and you are okay, but might be worth checking with a tax person.

[tammywammy]

10. That would be a 1099 and it has to be more than $600 anyways. n/t

[jb5150]

5. I'm waiting for B Of A

to offer me at least 6,000 dollars to cancel my card................:evilgrin:

[sarcasmo]

6. The snowball continues to build.

[ozu]

7. damn

And just when I paid off my Amex last month. Maybe I should ring up some charges just in case.

[davidwparker]

8. I have two credit cards. One is getting paid off when I get my taxes back; the

other is AMEX.