AmEx offers $300 to Cancel. Huh? – Episode #117

AmEx offers $300 to cancel your card

In the latest surprise default driven move, American Express has decided to launch a campaign to get people to cancel their AmEx cards.

Details:

• $300 gift card
• You had to be invited. Makes sense, they don’t want their profitable customers to cancel. You should have seen a 14 digit promotion RSVP code

Wow, how can AmEx make more money paying people to leave?

• What % of cardholders won’t payoff their balances by April 30th, and thus forefeit their opportunity for the $300 gift card. Let’s call it 5%.
• What % won’t remember the gift card is coming 4 weeks from now. Let’s call it 5%
• What % won’t use the card at all once received. Let’s call it 5%.
• What % of the cards unused balances will remain unused. Let’s call it 5%.
• Thus, only $244 will be invested per closed account. If the 5% rates above grow to 8%, the cost per closure will be $215.

Okay, how can they afford to spend even $215?

AmEx is calculating the cost of default on these accounts. Let’s say 30% of these accounts will default and the average loss is $1000, that means that AmEx loses $300 on average on these accounts. In this math, it’s better for them to spend $215 to get an account off the books, if it will cost them $300 anyway.

Note: all my numbers are speculation, but the logic makes sense. AmEx would only spend this money to close down accounts, if it thought it would lose more money later on.

myFICO Suze Orman FICO Kit – Review

Suze Orman FICO Kit Review – $49.95

The Suze Orman FICO Kit includes most of the the credit features you see in many other credit products with a couple of other features. Right off the bat, you see that the product allows you to get 3 FICO score report pulls. But, wait, there’s a difference. These can be pulled in a number of different ways. For example,

• You can pull your TU and Equifax reports and FICO scores and save 1 pull for a later date
• You can pull your Equifax report and allow your sister and brother to each pull their Equifax [or TU] report.

The core features of the Suze Orman FICO Kit stem out of the Action Planner and it’s rich features:

• Examine Your FICO Scores and Reports
  • Your FICO Score
  • Understanding Your Score – Reason Codes
  • Credit At a Glance
  • Accounts
  • Inquiries
  • Collections
  • Public Records
• Find and Correct Disputes
• Debt Eliminator
  • Credit Snapshot
  • APR negotiating tips
  • Your repayment plan
  • Your FICO Future
• Mortgage Payments
  • Your Mortgage type
  • Your mortgage details
  • What the future may hold
• InfoVault

Suze wouldn’t be Suze if she didn’t offer advice, and she’s done a great job of organizing the product around the action planner. This includes dispute assistance, the debt eliminator, a mortgage payment watcher and the InfoVault. The dispute tool is neat as it has a simple process to generate a letter. The debt eliminator is a great tool to help you negotiate with credit card companies for better rates and develop an action plan to pay down your debt.

Watch the video to learn more. See our other credit product reviews as well.

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