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American Express Cracks Down on Credit

American Express recently acknowledged that they are cracking down on their customers in light of the present financial climate. They are now proactively factoring in such credit issues as where purchases are made using their cards and where card holders mortgages originated.

Credit card accounts for some customers have been closed by American Express while the issuer has slashed credit limits and lines of credit for others. For business owners these moves can spell the end of the road if they depend heavily on credit to operate.

Amex is reportedly looking at account holder addresses to see if their cardholders live in what are deemed to be “mortgage hot spots”. There have been reports that these safeguards would be sought against risky credit users but only now is it becoming apparent that they are taking place.

MSNBC reports that an American Express spokesman has confirmed that approximately 50% of their customers will see their credit limits reduced. In years past that number was around the 20% mark. Still further evidence of the severity that faces the U.S. credit market.

While doing this may hurt some small business that rely on their credit cards to meet operating expenses, one can hardly blame American Express for protecting themselves in this risky climate. Proactive fiscal responsibility should be applauded and emulated.

Related Information:

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