Amex cuts spending limits for Lebanese card customers as economic woes deepen

Members with cards issued in Lebanon can spend only $500 per month on international transactions, regardless of their overall credit limit

CHICAGO, ILLINOIS - JANUARY 24: A sticker pasted at the entrance of a business lets customers know that they accept American Express credit cards on January 24, 2020 in Chicago, Illinois. American Express today reported better-than-expected fourth-quarter earnings attributed to growing card fee revenues.   Scott Olson/Getty Images/AFP
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American Express, one of the top global payments companies, reduced the spending limits on international transactions of customers with cards issued in Lebanon, amid continued economic turmoil and tighter controls enforced on dollar withdrawals by Lebanese lenders that has sparked public anger.

Amex, which has a large following among corporate clients and high net worth individuals, notified customers by email last month that they will only be able to spend a maximum of $500 (Dh1,835) in a 30-day cycle while outside Lebanon. The spending cap is applicable to both charge and credit cards, regardless of overall credit limits or their status – Green, Gold or Platinum, Amex customer service told one cardholder, who followed up on the email.

The move is likely to anger corporate and retail customers who rely on Amex cards to settle hotel and transportation bills.

Amex's head of digital & marketing for the Middle East, Paul Mampilli did not address specific questions put forward by The National and said the company is constantly reviewing "lending policies in alignment with market conditions". The spend limits "are not applicable for any spend in Lebanon", he said on Tuesday, without explaining when and where these limits are being applied.

“We understand that our customers in Lebanon maybe facing some challenges due to the prevailing market environment,” Mr Mampilli said in response to emailed questions, without saying why spending limits were slashed.

In November Amex reduced credit limits and cash advances of customers holding cards issued in Lebanon. Amex customers found out about reduced credit limits once their monthly statements were issued or received a notification by email.

Amex’s move comes amid a dollar liquidity crisis in the country. Banks have imposed informal controls on withdrawals and transfers abroad since September. Now lenders have halved the amount of dollars customers can withdraw every month.

These withdrawal limits vary from bank to bank but they have so far generally been capped at about $1,000 a month. Some lenders who previously allowed withdrawal of as much as $2,000 a week, have now capped it down to about $200 per week, according to a Lebanese bank customer, who declined to be named.

Several banks have allowed slightly larger withdrawal allowances to depositors who have more than $100,000 in their accounts. However, even those who have more than $1 million in their accounts cannot withdraw more than $2,000 to $3,000 a month, according to media reports.

Lebanon is experiencing its worst economic crisis since the end of a 15-year civil war in 1990, which gave rise to an unprecedented wave of public protests. Lebanese blame the country’s political elite for widespread corruption and nepotism, which they say contributed to the country accruing $89.5 billion of public debt as of the end of November, equivalent to 166 per cent of GDP, one of the highest ratios globally.

The country’s central bank on December 4, instructed lenders to cut interest rates on dollar and Lebanese pound deposits by half. In November, S&P Global Ratings downgraded three of Lebanon’s top banks to “selective default,” from CCC, following similar ratings actions by other agencies due to measures implemented by the banking regulator.

Lebanon's currency, although pegged since 1997 to the US dollar at 1507 pounds, has lost a third of its value against the greenback on the black market.

Amex was targeting single-digit revenue growth in the Middle East in 2019, as it increased merchant partnerships and launched new products and services, Mazin Khoury, chief executive of American Express Middle East, told The National in a June 2019 interview. The company has not revealed it 2019 growth figures yet.

Corporate spending worldwide was forecast to rise in 2019, according to the findings of Amex’s 2019 annual spending outlook for the Mena region.