American Express Customers Report Sharp Credit Limit Cuts Amid Economic Uncertainty.

American Express Customers Report Sharp Credit Limit Cuts Amid Economic Uncertainty

American Express customers are reporting sudden reductions in their credit limits, with some saying thousands of dollars in available spending power have disappeared from their accounts, raising questions about whether the card company is becoming more cautious about lending.

The reports have spread across social media and online credit-card communities in recent days, with customers sharing experiences of sharply reduced limits despite saying they have maintained good payment records.

One of the most widely discussed cases involves Kevin Kunze, a US entrepreneur who said American Express reduced the spending limits on several of his business cards. Kunze said he spends millions of dollars a year across nine Amex business cards and that one card's spending capacity fell from about $350,000 a month to $100,000 and another, reduced to around $250,000.

Other customers have reported similar experiences. One long-time Amex customer, Joe Clark, said his spending capacity was reduced despite having never missed a payment. His account of the experience later attracted more than a million views online.

The reports have prompted a broader question: is American Express seeing something in its customers' finances that the wider economy has not yet revealed?

American Express, however, has not announced a broad reduction in credit limits.

The company says it regularly reviews Card Member accounts and can adjust credit limits based on a range of factors as part of its normal business practices. In Kunze's case, American Express asked him to provide recent business bank statements or link his business account before restoring much of his previous spending capacity.

That distinction is important as the reduction affecting some customers does not necessarily mean the company is preparing for a recession. Banks and card companies routinely reassess the amount of credit they are willing to make available, particularly when customers' spending patterns, financial circumstances or credit profiles change.

American Express also does not currently appear to be dealing with a sudden deterioration in the performance of its card portfolio.

During the company's July earnings call, CEO Stephen Squeri said delinquency and write-off rates remained below 2019 levels, with delinquency holding between 1.2% and 1.3% for more than three years.

But that has not stopped the speculation. The concern comes against a wider backdrop of expensive borrowing and growing attention on household debt in the United States. For consumers who rely heavily on credit cards, losing access to a large credit line can immediately reduce their financial flexibility, even if they have not actually borrowed the money.

Credit limits are, after all, not cash sitting in a customer's account. They represent the amount a lender is prepared to make available, and lenders can change that decision.

The current Amex reports therefore do not establish that a recession is approaching, nor do they show that American Express is carrying out a company-wide credit contraction.

But they do offer a glimpse into how closely lenders are watching their customers.

If similar reductions begin appearing across other major banks and card companies, the significance would be harder to dismiss.

For now, American Express says it is reviewing individual accounts as part of its normal lending practices.

The question people are watching is whether that remains the story, or whether other lenders would start doing the same.