How to Avoid a Financial Review from American Express

In the world of credit cards, American Express is known for its premium offerings and exclusive perks. However, cardholders should also be aware of a particular process that can affect their accounts: the American Express financial review. In this article, we’ll dive deep into what a financial review is, what factors can trigger it, and the potential outcomes.

The American Express Financial Review: An Overview

A financial review is essentially a risk management tool employed by American Express to ensure that cardholders do not accumulate excessive debt and subsequently default on their payments. It’s designed to verify the accuracy of the income information you provided during your card application. The process can be daunting, but understanding why it happens and what triggers it is essential.

Factors That Can Trigger a Financial Review

Several factors can prompt American Express to initiate a financial review:

1. Excessive Clicking on the “Spending Power” Button: If you find yourself frequently clicking this button, especially multiple times a day, it can be a red flag. American Express designed this feature to allow cardholders to check whether a significant transaction will be approved. However, excessive use might raise concerns about your financial behavior.
2. Too Many Large Purchases in a Short Time: While it’s natural to want to maximize the benefits of your new card, making numerous large purchases in a short time can trigger a review. This is particularly important to consider if you’re trying to meet a minimum spending requirement on a new card. American Express looks for consistency with your reported income.
3. High Credit Limits: If you have credit limits exceeding $25,000 on a single card or a combined credit limit of $35,000 across your cards, this could trigger a financial review. The rationale behind this is to assess whether your income aligns with your credit limits.
4. Return Payments: American Express allows you to link a bank account to automatically pay your statement balance. However, if you don’t have sufficient funds in your linked account, leading to return payments, it may draw their attention.
5. Significant Changes in Reported Income: If you substantially alter your reported income, American Express might want to see proof of this change, such as a pay stub or tax return.

The Outcomes of a Financial Review

When you undergo a financial review with American Express, there are three possible outcomes:

1. Pass with No Further Action: If all the information checks out and aligns with your application, your accounts will remain unaffected, and no further action is necessary.
2. Pass with Decreased Credit Limits: Sometimes, American Express may decide to reduce your credit limits even if you pass the review. This reduction is a precautionary measure.
3. Fail with Account Closure: In some cases, if discrepancies or inconsistencies are found during the review, American Express may opt to close all your accounts.

It’s crucial to remember that undergoing a financial review can be a stressful experience. However, it’s in your best interest to cooperate and provide the requested documentation. Failing to do so may lead to unfavorable outcomes, including account closures.

In conclusion, understanding what can trigger a financial review and being aware of the potential outcomes is vital for American Express cardholders. While this process may seem intrusive, it ultimately serves to protect both cardholders and the financial institution. So, whether you’re considering clicking the “Spending Power” button multiple times or contemplating significant changes to your reported income, proceed with caution to ensure a smooth credit card experience.