In a new promotion that has garnered the attention of headlines across the county, American Express (NYSE AXP) is offering $300 gift cards to selected consumers if they pay off their remaining balances and close their accounts.  The promotion is just one of many ploys being used by credit card companies in an attempt to combat the losses incurred since the onset of the current economic crisis.  As the nation continues to dig itself out of this financial hole, consumers should be wary when confronted with offers such as this from their credit card companies.

Many analysts agree that the promotions currently being offered by American Express and similar companies are simply a last-ditch effort to draw as much money from consumers as possible before they default on their credit lines.  As more and more consumers file for bankruptcy and default on their credit card payments, lenders are facing tremendously increasing losses on write-offs.  These losses are adding to the already surmounting pressures to raise capital and cut costs to avoid financial hardships.  The result is a seemingly endless spiral of financial struggles for consumers and businesses alike.

Customers should be especially cautious of offers and promotions from their credit card companies which require the customer to close their account.  After closing their accounts, these consumers are having a very difficult time finding other credit options or being approved for other credit lines.  Consumers should be aware that if they lose their credit line, there is no guarantee that they will find a suitable alternative.

Alternatively, several companies are currently offering promotions to assist customers without forcing them to close their accounts. CompuCredit (NASDAQ CCRT) has a current promotion which helps indebted customers reduce their credit balances while keeping their accounts open.  This in turn makes the monthly payments more affordable for struggling borrowers and dramatically decreases the risk of the customer defaulting on their credit line payments.

As more and more credit card companies turn out new promotions aimed at alleviating the concerns of growing default and write-off rates, consumers should be aware that not all programs are directed at their best interest.  Consumers should always be aware of the full ramifications of their actions and agreements before taking part in one of these popular new credit card company offers.