Declined by Amex despite not applying for more credit as an existing member.

comeandgo

If you are paying the balance each month they are not going to make money from you .

Sensory

adamp87 said:

As GeordieGeorge already said different criteria for different cards. It’s not just a case of simply switching cards over. Different card, different risk profile and targeted customer evidently.

I don’t believe they would allow to
you to convert Avios to cashback/points do they? If they don’t I don’t see how that effects it.

For whatever reason you didn’t fit the bill this time around for them, you don’t get an answer unfortunately really ever from any provider. 

Their eligibility checker results in a 95% chance of acceptance.

They do not allow conversion of Avios to points/cashback, hence the new application. Had they approved the application, I would have had two cards with the same overall credit limit, and instead of Avios, I would be earning mostly cashback instead (because I would switch most of my spending to that card).

I know I won’t get an answer from them, but I hoped perhaps others had some insight beyond the wall of their complex internal scoring considering the circumstances here.

Sensory

comeandgo said:

If you are paying the balance each month they are not going to make money from you .

They make money through transaction fees to merchants.

The only reason I can think of now is they’d make probably slightly less money because of having to provide cashback directly instead of transferring Avios.

Sandtree

Sensory said:
Regardless of the changes in my circumstances, their exposure to that risk has not and will not change. They could reduce any calculated risk by reducing my current credit limit, but they have not.

Whilst my capital modelling experience comes from insurance rather than lending I would be surprised if one card with a high limit would create the same capital requirements as a two cards with a low limit that sum to the same. 

These debates may be interesting but the fundamental point is that unless you can show they are discriminating based on a protected characteristic (gender, sexual orientation, race etc) then its their free choice who they do business with. You could have Bill Gate's bank balance and pension but they still decline you.

Aran76

You mentioned that you sent them a copy of your Experian credit report. Have you also been checking/monitoring the other credit reference agencies?

Sensory

Sandtree said:

Sensory said:
Regardless of the changes in my circumstances, their exposure to that risk has not and will not change. They could reduce any calculated risk by reducing my current credit limit, but they have not.

Whilst my capital modelling experience comes from insurance rather than lending I would be surprised if one card with a high limit would create the same capital requirements as a two cards with a low limit that sum to the same. 

These debates may be interesting but the fundamental point is that unless you can show they are discriminating based on a protected characteristic (gender, sexual orientation, race etc) then its their free choice who they do business with. You could have Bill Gate's bank balance and pension but they still decline you.

Yes, but they are doing business with me, and they haven't terminated my BA account or reduced its limit.

Can you elaborate on how capital requirements affect my application being declined?

Sensory

Aran76 said:

You mentioned that you sent them a copy of your Experian credit report. Have you also been checking/monitoring the other credit reference agencies?

Yes and they're good as well, but Amex check Experian.

Vinknut

I think the upshot of all this is that no-one knows, and if anyone does actually know they're not allowed to tell you anyway.

It might be any of these mad combinations that their algorithms have detected as having a larger risk than an existing customer, and might specifically be around opening new accounts rather than reviews of existing accounts.

No new accounts opened for anyone who has taken on a mortgage within the past 18 months.
No new accounts for existing account holders who also has taken on a mortgage within the past 18 months.

I'm not sure what else you're expecting someone to tell you?

Sandtree

Sensory said:
Yes, but they are doing business with me, and they haven't terminated my BA account or reduced its limit.

Can you elaborate on how capital requirements affect my application being declined?

They are two independent things, most banks don't review your full product holding each time you apply for a new product. Next time your existing card is reviewed its likely to consider the new information received at the time of application. So if your income has halved or tripled the limit on your old card wont change as soon as you apply for a new one.

Capital modelling is ultimately putting a financial figure to risk. You stated that having 1 card with a £10,000 limit is the same risk as having 2 cards with £5,000 limit each. Having seen how capital modelling works I doubt the actuaries would agree that its the same in all scenarios. These things are complex though and the guys saying yay or nay will not be directly thinking of this but can be unknowingly considering it when they're told to start accepting more of X or less of Y.

As already said an quoted though... only AmEx know the reason why and its commercially sensitive and so they will never tell you. Chalk it up to experience and know that any application is ultimately an element of a roll of the dice because you may just be unlucky to be at the point of concentration risk meaning they start declining people in your situation... I can imagine that people working in certain industries right now will find acceptance rates down due to Covid where as people in less impacted industries it may be flatter.

Sensory

Sandtree said:

Sensory said:
Yes, but they are doing business with me, and they haven't terminated my BA account or reduced its limit.

Can you elaborate on how capital requirements affect my application being declined?

Capital modelling is ultimately putting a financial figure to risk. You stated that having 1 card with a £10,000 limit is the same risk as having 2 cards with £5,000 limit each. Having seen how capital modelling works I doubt the actuaries would agree that its the same in all scenarios. These things are complex though and the guys saying yay or nay will not be directly thinking of this but can be unknowingly considering it when they're told to start accepting more of X or less of Y.

Now that I can accept. I know my own personal spending, and having 2 cards each with a £5,000 limit would be the same as 1 card with a £10,000 limit in terms of paying off full balances every month and maintaining a credit utilisation of less than 20% per card. If their algorithms and statistics don't see it that way, that is fine.