American Express Limited After All

Published 11 years, 7 months ago

Anyone remember the American Express commercial where a guy talks about how he was at a big client dinner and his credit card got declined?  “I was so embarrassed,” the voice actor moans, and then goes on to relate how his father told him to get an American Express.  With no pre-set spending limit, he informs us, he’ll never have to worry about being declined again.

Wrong.

It turns out that “no pre-set spending limit” does not mean “you can charge as much as you want as long as you pay off the balance on time”.  It means “your monthly spending ability changes based on your spending history”.  You can absolutely have a charge to your AmEx declined.  Even better, since the limit changes continually based on your activity, you have no reasonable way to know when a decline might happen.  It’s the worst of both worlds!

All this, and an annual fee to boot.  Awesome!  Where do I sign?

Of course, when you think about it, you quickly realize that there had to be some kind of limit.  If there weren’t, you could buy a fully armed jet fighter with it.  (Which would of course be awesome.)  What rankles is that the advertising explicitly claims, and the wording “no pre-set spending limit” strongly implies, that declines are a thing of the past with an AmEx—which is completely and utterly false.

Fortunately, it seems that there is a way to handle charges that exceed your spending limit: pre-pay the charge(s) in question.  Of course, I had to think of this and ask someone at AmEx about it; the three people I’d talked to before that hadn’t volunteered the information, or else just didn’t think of it.  I’ve been assured that, having paid in advance, everything will go through without incident, even though what I’m charging is about an order of magnitude greater than the initial spending limit set for the card.  We’ll see how things play out.

I just wish they’d been more open about all this in the first place.  As a result of all this, it’s difficult to shake the feeling that my new card issuer has been lying to me.  That’s not really the way I prefer to start a new relationship.

Anyway, I just thought I’d share this little tidbit for the benefit of anyone interested, including any future Googlers.  Oh, and vent a bit in the process.  That always feels good.


  1. Last year, I worked for a small startup selling server equipment. We ran into this problem _all the time_. It was practically impossible to tell when AmEx was going to cut us off and it became a huge problem – vendors started to trust us less because our cards were occasionally declined, customers were forced to wait an extra day while our vendors required checks to clear, etc.

    AmEx made our lives practically miserable on a few occasions. I’m glad I don’t deal with that anymore.

  2. Say if you started off buying a really small model plane, and then very gradually ramped up the purchases. Maybe you could, one day, buy a fully armed jet fighter on your credit card.

  3. sure, sure- buy the fighter jet.

    But where will you park it? Hmm?

  4. “Hello? I’m calling to ask you why my card was declined.”

    “Because you are over your spending limit, sir.”

    “I thought there was no spending limit.”

    “No, sir. There is no preset spending limit.”

    “Well, if my card was declined, then the limit was preset, wasn’t it?”

    “No sir. I just set it now.”

    “What?”

    “It’s set. I just set it now. It’s five dollars less than what you wanted to charge. Just now.”

  5. I have been a faithful Amex customer for years and very satisfied with their service. Over the years they have always seemed to have our best interest at heart. I am curious to the purchase. I have charged expensive things before halfway expecting them to call or decline due to the large amount. Yet,the purchases always went thru immediately. Where you charging a car or something? Or was this just a new account? Love your blog!

  6. LOL,

    the key is immediately do a few big charges (make sure credit score and bank balances look good ) then call amex at that time saying Im making this big purchase.

    Once you have established you are a big spender you shouldn’t have an issue.

    Also to buy the fighter jet you may have to upgrade to a better card, at the very least a platinum. Unfortunately the Black is probably the card you need, and that is invite only.

    So start spending and before you know you too will experience the joy of “oh crap, I’ve got to pay off how much!”

  7. It’s a new Platinum business charge card. I wish I’d only been charging a car! In fact, I was paying the catering and hotel services bill for AEA Boston—that’s breakfast, lunch, and snacks for 550 people over two days plus network access, AV equipment, room setup, automatic service charge, hotel rooms for speakers, taxes, blah blah blah. That’s a very, very large bill.

    I’ll be interested to see if they invite me to pick up a Black card.

    Oh, and once I bought the fighter jet, I could buy the airfield to go with it! Well, if I didn’t have a secret spending limit, anyway.

  8. Wow, umm. it should get easier, hopefully. If not there are plenty of people out there that would LOVE to have your business. I would also badger them about getting the Yearly fee waived, if you are spending that much.

  9. Amex does not waive yearly membership fees.

  10. If I was offered a card and told I’ll “never have to worry about being declined again”, yet it was declined for something I could pay for, I’d be talking to them about closing my account.

  11. Small story bought a $4,000.00 hot tub had it preapproved with the GOLD card arrived damaged by one Individual/delivering agent when three were contracted for 5 weeks after ordering and two weeks after paying the bill therefrom. Told not to worry they would have it worked out in 30 days but certainly no more then 6 – 8 weeks. Now the anticipated date of the “investigation” closure [as all parties involved have already in writing admitted fault] is June 10th a day after my payment is due (never paid late never charged a dime in interest all cards were fee free for first year). AND I won’t I canceled the BLUE, GOLD & PLATINUM but now I’m not eligible for the AMEX INSURANCE should I somehow lose the claim for my $4,000.00 back. Frig them stay with VISA & MC or DISCOVER I went back to 2 of the 3 of three real fast!

  12. Great thread here, btw. I was just approved for a Platinum and plan on using it mostly for biz related expenses rather than my corp card. I travel a lot so getting the additional ‘flight clubs’ at the airports was a big plus. Regarding the credit history and assets: I imagine they know my credit score because I was approved, but do I need to prove assets to warrant an initial high limit? I’m sure they don’t know my assets because it isn’t contained on my credit report and specific bank/investment account information wasn’t given.
    Thanks

  13. Well we have been Business Gold members for 18 years. Never had a problem until AMERICAN EXPRESS BANK took over the accounts, last year sometime I believe. Has always had high balances, but because our spending decreased over the past 6 months, they now decline charges that put us over our average for the past 6 months. What’s up with that! Never had a late payment! But the declines state “charges out of normal spending pattern.” Is quite embarrasing indeed. They never communicated this and the only way we find out anything is by calling “AFTER” something has been declined. And how much sense does it make to “pay in advance”? Hence the term, “credit”? And for this we pay over $100 a year? Will be closing the account for sure!

  14. I’ve had my Gold card for the past 2 years. On average, I spend 5-10K per month. Never had a missed or late payment. I’ve spent over 60K this month for company expenses, and today, they declined me for 20 dollars of gas. I told them to send me my statement right away, and I will be cancelling their card.

  15. We have had our AMEX gold card for 5 plus years. We got a request for financial statements a couple months ago. We had used the card for absolutely everything, from inventory, advertising, etc. They cut our so called spending limit by 100K once we gave them our financials. We never had a late payment or anything before that, and they would not explain why. I would advise anyone to NOT send financials if they request them. They claimed “declining profitability”, huh? Yeah I guess when you grow from 25K in sales to 4.5 mil over 5 years the profit percentage might go down a bit. In any case I told them that without the ability to charge our day to day expenses it would delay our ability to pay. As soon as they our paid off we are going with a private bank. The rewards are pennies on the dollar with AMEX, and they hit you at the worst possible times.

  16. This is in response to DanLeaveItAlone – We have almost the same story. Bought a damaged tub and although Amex says they guarantee goods they didn’t. The seller claimed we damaged it and Amex wouldn’t allow us to stop the charge from going through. It was also the wrong model tub on top of that. So we had to pay a restocking fee to the seller of $1000 to avoid being charged the full amount of it. Basically what Amex is doing is siding with criminals to shake down innocent people. They’ve done this now three times to us.

  17. I must say this is a great post, and have fallen for that “No preset spending limit”. I canceled all my other cards awhile back thinking “Wow, I’ve got unlimited credit on this card.” ERR – Wrong. I was away on business and had it declined while I was out at dinner with some clients. Just as the commercial says. To make matters worse, how do you pay off nearly $5000 in hotel costs when American Express decides to all of a sudden put a spending limit on your account? Believe me, its not fun and it is definitely embarrassing.

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