Chadwick: My Warning to American Express Cardholders

Dear American Express Cardholders,

Please read the attached article from today’s Wall Street Journal. Some of you may have received an ‘invitation’ from American Express over the last week or so to pay off your entire account balance and to close your account, and in return you will receive a $300 prepaid gift card.

The deadline for responding is fast approaching – it is this Saturday, February 28.

Please for your own benefit, do not respond to American Express without carefully reading both the attached article all the details in the material they send you (I am sure it will be very tiny print) and making sure you really want to close your account forever, losing all the cumulative points have earned (unless you spend them all by this Saturday, February 28).

Realize, too, that by closing your account you will also be damaging your credit score.

In this difficult time, you may actually need your American Express credit card for emergencies. This offer is for the benefit of American Express, NOT for you!! American Express has one of the lower interest rates of any card, making it one of the most valuable credit cards to own.

    • AmEx shares fall amid worries about credit losses

If you have more than one credit card with debt on it, pay off the most you can on the ones with the highest interest rates. Those are usually the store cards and your Visa or MasterCard. Hold on to your American Express card for all your life, because its rates are lower than almost any other card.

The $300 lure from American Express may be the most expensive ‘gift’ you ever received. It is not a gift.

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Patricia W. Chadwick has had more than 35 years of investment experience. She is the founder and president of Ravengate Partners LLC, a consulting firm that provides advice on financial markets and global economics.