Tran Harry – The Economy Needs A Fix

Looks like American Express is the next to reward financial irresponsibility.

American Express Co (AXP), battered by mounting credit card losses, is offering $300 to a limited number of U.S. card holders who pay off their balances and close their accounts, the company said on Monday.

“We sent the offer out to a select number of card members,” said Molly Faust, a company spokeswoman. “We are looking at different ways that we can manage credit risk based on the costumers overall credit profile.”

The company did not say how many card holders would receive the offer and did not disclose the total of their card balances. Card holders have until the end of February to accept the offer and must close their accounts in March or April. Each card holder will receive a $300 pre-paid American Express card.

American Express, often seen as catering to relatively wealthy customers and companies, has been expanding its credit card business in recent years by reaching out to a wider range of clients. But that strategy has backfired. The company’s earnings tumbled in the fourth quarter as credit losses jumped and debt-burdened consumers slashed spending.

In addition, American Express reported last week that credit card delinquencies rose in January more than analysts expected, as U.S. unemployment increased and the global economy deteriorated.

Looking at a press release such as the one above really gets me to think about how our country wants us to think about the entire concept of responsibility. Case in point, two months ago I had a running balance of around $600 with American Express. Within two weeks I was able to scrounge up enough money from my paychecks to pay off this amount in full. So now my balance for American Express is at $0. This was all while my APR was still at its introductory rate of 0% on the balance.

Now I am probably not one of the few individuals that American Express has in its scope to send out these notices for the $300 payouts but this just irks me out a lot because what would they be telling me about my actions. Here I am paying my balance in full, not because I have to, but I know it is the right thing to do, and I will pay my obligations when I have the appropriate funds to do so, but had I not paid my balance could I have waited a few months for a notice that they’ll literally pay me to pay them?

Are we such babies that we no longer handle our own responsibilities but we need to be dangled rewards to do what is right? Does that make paying your balance off right after someone offers you a reward to do so? I am not against a company paying all their customers $300 (Although I don’t see any business actually surviving if they did that) but if they’re going to be doing this, shouldn’t they be rewarding those who have already paid off their balances, and if word gets out that people who paid their debts off in full balance get rewarded than maybe those who are behind will start paying their debts off to get the reward. I just don’t believe this deal is equitable, nor are the many bailouts that our government is pushing.