American Express Offers $300 To Close Accounts
American Express is offering some customers $300 if they'll pay off their bills and cancel their credit cards. It's making the offer only to those it no longer wants to do business with. American Express says it will notify those eligible for the offer by mail.
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RENEE MONTAGNE, host:
And here's a change for you. It wasn't that long ago that credit-card companies flooded mailboxes with offers, and they didn't seem to care who opened an account. Well, sign of the times: American Express is paying some people $300 to close their credit-card accounts. NPR's Wendy Kaufman reports.
WENDY KAUFMAN: Not everyone is eligible for the $300 offer, only those the company wants to give rid of. American Express says that number is relatively small. Presumably, it's those with less-than-stellar credit histories, and perhaps those who aren't worth keeping because they don't spend enough. Lou Mandell, a professor of finance at the University of Washington's Foster School, says typically, a credit-card issuer that no longer wants your business simply cancels the card or raises fees so high, you'll cancel. But American Express wants to maintain a different image.
Professor LOU MANDELL (Finance, University of Washington's Foster School): American Express has a certain cache, certain customer loyalty, and it wants to probably maintain its relationship with customers, their family and their friends. So it wants to do things in, probably, more genteel fashion.
KAUFMAN: The company will notify those eligible for the offer by mail. Takers will have to pay off their entire credit-card balance between March 1st and the end of April. After that, they'll get a $300 prepaid credit card to spend as they wish.
Wendy Kaufman, NPR News.
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