American Express Executive Speaks on Behalf of Consumers

It seems that Congress and consumers advocacy groups are not the only ones taking a closer look at credit card industry practices. In fact, the Chief Executive of American Express, Kenneth Chenault, has also publicly stated that some changes need to be made with industry practices in order to ensure customers are better able to understand their rates and fees.

When addressing a group of lawyers and business executives, Chenault said, “What I believe in firmly is that the disclosure and practices of the credit card industry, some of them need to be changed in a fundamental way.”

OK, maybe it isn’t the most eloquent of quotes, but his point echoes what Congress and consumer advocacy groups have been screaming about for some time now. Chenault went on to criticize the universal default practice utilized by many credit card companies. As I have mentioned before, universal default is the term used to describe the practice of raising interest rates on one credit card based on your failure to pay another credit card or bill on time. This can include paying your mortgage late, a utility bill late, a car payment late, or even a book club membership.

According to Chenault, American Express does not engage in this practice. He also stated that many credit card companies have stopped engaging in this practice. More specifically, he stated, “What I’m not going to do is defend practices that I don’t think work. We never put that in and a number of companies, as a result of Congress getting involved, have stopped doing it.”

It’s nice to see that a ranking executive in the credit card industry is in agreement with many others when it comes to the shady practices within the credit card industry. My question is, what changes exactly does Chenault plan to initiate? It sounds like he’s trying to take steps in the right direction, which is certainly encouraging for everyone. Let’s just hope that he and the other higher ups in the industry continue moving in a positive manner.

Related Posts:

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• American Express Tightening Lending Criteria - American Express is still struggling to cover heavy loan losses recently resulting from defaults in its credit card business.  The company’s fourth-quarter profits dropped...
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This entry was posted on Saturday, October 6th, 2007 at 3:08 pm and is filed under Credit Card News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.