American Express is always redeemed as the best credit card issuer at the United States. The 2008 J. D. Power Credit Card Satisfaction Study also revealed that American Express was ranked the best credit card company. My previous post “Funny Stories with Citicards” described some ridiculous mistakes made by Citi. As Sander mentioned in the comment,  American Express also will do something unfriendly to their customers. The famous Financial Review is a typical example.

Today I just noticed a very interesting article about American Express and wanted to share with you.

It’s no doubt that as the credit crunch reaches from Wall Street to Main Street, many credit card issuers are reducing their credit limits to certain customers. Some customers also found that their credit card accounts were closed without any reasonable explanation from credit card companies.

The question is how the credit card companies decide whether or not to reduce your credit limit or close your account. Your first reaction might be the credit score or credit report. I do believe your credit performance during the credit crunch is a very important factor, however, there are other criteria you might have never been thought of—American Express will close your account by taking into account of where they live, where they shop and who holds your mortgage.

The story was first published at MSNBC (link).

Jesse Gilleland of suburban Washington, D.C. had two American Express cards canceled and the limit on a third card cut. The company said the decision was based in part on where he  shops and who holds his mortgage.

As indicated in the mail, American Express clearly indicated that the reason why the limit of Jesse’s Platinum American Express Card was reduced were due to:

“Our credit experience with customers who have made purchases at establishments where you have recently used your card.”

“Our analysis of the credit risk associated with customers who have residential loans from the creditor(s) indicated in your credit report.”

The mail from American Express can be downloaded at here.

While I have heard that some credit card companies will use the above mentioned factors to determine the customers’ creditworthiness, this indeed is the first time I saw it happen.

It’s more interesting to see that this was confirmed by the American Express spokeswoman Kim Forde by saying: “We are looking at some other factors, too, in light of the economy. We are looking at consumers holding subprime mortgages (and) those living in areas where there has been a greater deterioration in home prices.” and “You have to remember that this is one contributing factor. That’s not the sole reason, but it’s certainly data that we’re looking at.”

The reason why I want to introduce this story is behavioral score is used by the credit card issuers. When you are talking about credit score, you should remember that there are many other “invisible” scores that credit issuers might take into account.

I hope this will not happen to me and readers at MyCardBlog.Com.

The full story can be found at MSNBC business section (direct link).