Thursday, September 25, 2008

Today's Credit Crisis Story About Me

No one can get any credit! House loans, car loans, business loans, student loans - no one can get a loan of any shape or size. The reason, they say, is that in the past 5 years in particular, lenders were willing to grant credit to individuals who were not deserving of credit. As a result of this, the pendulum has now swung too far in the opposite direction, and even the most credit worthy individuals are having trouble acquiring a loan. The whole world is going to end! Or......

About three months ago, I decided to add an American Express Blue Cash card to my George Costanza-sized wallet (I know it is huge, I don't need you to point that out to me every time I pull the wallet out of my pocket. Am I paying more than my share, and maybe part of your share? Yes? Then leave me and my wallet alone) and I was initially granted a woefully low credit line (less than $5K). As a guy who has very high credit scores and good fortune enough to have a regular income from my non-blogging job, I was actually shocked by how pathetically low the credit line was. I called AMEX to see if I could get my line increased, and they said "no, credit lines in general are limited now, try in three months." I waited patiently for my three months, and tried again today. I called AMEX, talked to a person, simply stated my annual income (without any sort of proof), and they were able to instantly triple my credit limit. According to the woman, I can try for another tripling in three months. Huzzah! At this rate, I'll have a $1 million credit limit in 2 simple years. What credit crisis?

While I am quite grateful that American Express was able to increase my credit limit, I was amazed by the fact that they could increase my limit with an unproven verbal statement from me about my income. Isn't that part of how we got into this mess in the first place? I am pro $700B bailout for several reasons, but it is a much harder sell to the American populace if lenders do not have a clearly defined good faith effort to lend the appropriately high amount of credit to the deserving, and keep an intelligent lending limit to risky individuals. My experience with American Express today does not convince me that this is yet the case, and that is a problem.

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