Amex Scrutinizes Accounts Amid Economic Uncertainty

American Express has reportedly taken a more aggressive approach to risk management by scrutinizing its customers' credit card accounts and cutting or canceling them if necessary. This pattern of action is not new, as the company previously took similar steps during the 2008 financial meltdown and in 2020 when the pandemic began.

The move is seen as a cautious measure to protect itself from potential losses due to economic uncertainty. As explained by the source, credit card companies are exposed to high risk when the economy is about to take a downturn, and customers may default on payments if they have little or no income left.

American Express has been canceling accounts without inquiring with the customer first, or sometimes after requesting financial reviews of customers during which Amex asks for documents such as tax returns and income statements. This has led some to speculate that the company's economists may see something that others don't, possibly anticipating another financial meltdown.

The source notes that American Express has modified its product features in recent years, including introducing firm credit limits on certain cards, which can be reduced if not utilized by the cardholder. This is specific to the U.S. market for now, with no reports of similar actions taken against Amex customers in other countries.