Yup, this is for real.
As recently reported by The Wall Street Journal and the Credit Matters blog, American Express is offering select customers a $300 incentive to close their account, provided of course, they pay off any remaining balance first.
Those who received an offer letter and wish to take advantage of the cancellation program have until the end of April to pay off their credit card balance in full at their normal interest rate, and must redeem any rewards points prior to even enrolling in the program, or else lose them.
Molly Faust, an American Express spokesperson is quoted as saying, "The intention is to help cardholders lower their debt and encourage responsible management of their credit."
Ummm... yeah right! Who are they trying to fool? We all know that AmEx is just trying to head some delinquencies off at the pass.
I mean, we all see it. It's more than evident that lots of Americans in today's economy are struggling to pay their bills. And when that happens, credit card debt usually drops to the bottom of the priority pile, behind much higher ranked financial obligations such as rent or the mortgage, food, car payments, insurance, etc.
They don't really care about cardholders lowering their debt... that's how they make their money! Off of cardholder debt!
And do they really want to encourage people to manage their credit responsibly? Or just responsibly pay them off in full and then kick rocks?!
The way I see it, AmEx figures they can give cardholders a $300 prepaid gift card after they get all of their money, and after the account is officially closed and can't be charged back up, all in an effort to sleep better at night without worrying if cardholders will pay or not. They just want to get the folks giving them bubble-guts off of their books altogether!
Oh, and never mind that they'll make money each time those gift cards are swiped in the form of merchant processing fees, which will of course, offset some of their expense of the cards.
Couldn't they have just reduced the outstanding balance cardholders owed by $300 instead of issuing $300 gift cards? But then again, that offer may not have been as sexy. I'm just saying...