Kevin Kunze, 29, an entrepreneur and influencer, has nine American Express business credit cards for his various ventures, which include Section 8 housing “BRRRRs” — he has nearly 60 active renovations — and an Amazon business selling private-label products, he says.
Kunze, who goes by the handle EcomSideHustle, also sells online courses and coaching to social media followers who are interested in growing their own Amazon side hustles.
“I have been using [American Express] since I think 2018 for pretty much 100% of my spend,” he said in an Aug. 14 TikTok video. “I have spent probably $6 [million] to $15 million per year on those cards… and have been paying on autopay the entire statement balance every single month for the history of my account.”
With little warning, the bank dramatically reduced his limits, creating a cash flow crisis for his businesses, he says. Previously, some of Kunze’s cards had no preset spending limit, he says.
“I used to be able to spend anything that I wanted on any card, and now all of a sudden they drop me to a quarter million dollars spend per month on some of the cards,” he adds.
Why people think American Express is predicting a recession
Social media platforms have been flooded with viral content claiming American Express is cutting credit card spending limits because the company is concerned the economy is entering a recession.
Money embarked on a fact check to get to the bottom of these claims, starting by tracing the trend’s origins. That’s what led us to Kunze, who tells Money he was the first to post, and his original video with 2.2 million views and 120,000 likes remains one of the most viewed.
Before the flurry of videos began, American Express hadn’t made any recent announcement about credit limits or revised its macroeconomic outlook, nor were there any related media reports that may have sparked the trend.
The first mentions of the so-called “Amex recession” on X, formerly Twitter, appeared on Aug. 15, a day after Kunze posted his TikTok video declaring that he planned to cancel all his American Express cards after his credit limits were slashed.
It wasn’t until his fifth video on the matter that Kunze first mentioned the idea of a “recession.” By that point, users commenting on his TikTok were calling what happened to him a “recession indicator,” and the theory that American Express is tightening limits in response to economic concerns was appearing on other platforms.
While Kunze’s response was measured, admitting he didn’t know if this is a recession indicator, the videos that followed were not.
“This is 110% a recession indicator,” TikTok user @kiarajaxn said in her post, with overlaid text stating that “Amex is randomly cutting off millionaires đŸ˜³.”
Then the comparisons to past economic downturns began.
“The only other time this happened is right before COVID and the 2008 recession. So maybe we’re cooked,” influencer @CamCasey said in a viral post to his 1 million Instagram followers, alleging that he, too, was limited despite never missing a payment.
Why your credit limit can drop overnight
American Express has rejected the claim that it’s broadly cutting credit limits because of recession concerns.
An American Express spokesperson said in a statement to Money that the company “regularly reviews Card Member accounts and may adjust credit limits based on a variety of factors as part of our normal course of business.”
The bank added that card members are notified when limits are adjusted. Customers can call American Express support using the number on the back of their card to request reviews of credit limit decisions.
To the extent that social media claims about individual American Express credit limit changes are true, they aren’t signs that “the sky is falling down,” says Brian Riley, a director of credit advisory services and a co-head of payments at Javelin Strategy & Research.
The key concept to understand is “credit hygiene,” or a card issuer’s practice of routinely reviewing customers’ spending and credit limits to mitigate risk, he says. Not every bank is as focused on this as American Express, Riley says.
For example, he has a $90,000 limit across three Barclays cards, which he and his wife barely touch.
“That’s really not good credit hygiene,” he says. “What you see American Express do and top issuers like Citi, Chase and so forth, they routinely look at your purchase activity and line utilization.”
Even Kunze finds the recession claims unlikely at this point. Looking at the company’s financial disclosures, he saw that credit card defaults are low, making the recession theory feel less plausible.
“It only really makes sense to tighten spending if people aren’t paying,” he told Money. “But as of right now, their numbers genuinely do not show that.”
Editor’s note: This is an abbreviated version of Money’s original report.
