Amex, Chase, Bank of America, and other banks are canceling credit cards, often without notifying the holder in advance. This can result in severe inconvenience to a card holder to who may try to use the card, only to find it no longer works.
Credit card contracts allow this to occur but it is another way in which banks are breaching any goodwill they may have had left over - and it's probably not much.
The WSJ reports on the case of May Horowitz, who after a day at a spa in North Carolina tried to pay with her Amex card and was declined. She called and learned the card had been cancelled, despite the fact she paid on time and had no recent blemish on her credit report.
This is not the first controversial action taken by the credit card companies in response to their financial problems. Citibank, Chase, Bank of America and other banks have raised their credit card interest rates on vast numbers of their card holders for often no apparant reason, even as these banks received government bailouts.
The Fed recently several credit card consumer protection measures but they do not cover these kinds of out-of-the-blue cancellations.
So, the next time you pay with your credit card, hold your breathe, and hope the transaction goes through.
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Related Articles:
Credit card defaults are on rise by soczie - Aug 27, 2007
Please Allow Congress to Give me a Discount for Paying Cash Instead of Credit by JRodgers - May 15, 2009
Credit Card Bill Belongs to the NRA by JRodgers - May 21, 2009.
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