American Express and why it pays to pay cutomers so they pay their bills

Have you heard?  American Express is offering a $300 pre-paid American Express card to some cardholders.

You: What’s the catch?

You must pay off your entire balance and then close the account.

You: What?

You must pay off your balance and then close the account.

You: I heard you the first time. I’m just a bit amazed that a credit card company would do that. Besides, I pay all my bills and no one’s offering me $300 to keep on doing so.

Me neither.  But you might be getting $13 a week from the government in a couple of months.

You: Oh yes, the stimulus.  Big deal. Why is American Express giving away $300 to some customers?

They’re testing the waters.  They’re going to see if the $300 incentive improves the repayment rates on some of their delinquent accounts.

You: They’re giving $300 to those who are behind on their payments?

Yes.

You: This is ridiculous.  Will it work?

I have no idea.

You: Well, what do you think?

I doubt it will matter. It’s basically a $300 write-off of the outstanding balance. If you owe $10,000, it’s as though you now only owe $9,700.  If you have $500 to your name, what’s the difference in your ability to repay?

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What do you think? Will it work?  Hoping for an offer? Hoping you never get an offer (since you know what that means)?

Tags: $300 payoff, American Express, Amex