Tip: Amex’s ‘Please Pay By’ date isn’t the same as your payment due date
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While banks and credit card issuers haven’t always been the most consumer-friendly, things have gotten a lot better for cardholders since the financial crisis of 2008. Legislation, especially the Credit Card Accountability, Responsibility and Disclosure Act of 2009 (CARD Act), laid out strict guidelines on how card issuers communicate with customers about everything from interest rates and benefit changes to payment due dates. But that doesn’t mean consumers shouldn’t check the fine print.
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‘Please Pay By’ dates are only suggestions
I applied for The Business Platinum Card® from American Express at the end of 2018 to take advantage of the card’s 75,000-point welcome offer before Amex raised the annual fee to $595 (see rates and fees). New applicants can now earn 125,000 Membership Rewards® points after you spend $15,000 on eligible purchases with the Business Platinum Card within the first 3 months of Card Membership. This is worth $2,500 based on TPG’s valuations.
Spending $15,000 in three months is a lot, so after opening the card I closely monitored my account activity. My first statement closed on Dec. 25, and I was a little alarmed to see that Amex was only giving me 15 days, until Jan. 9, to pay off my five-figure balance.
If you’re a small business owner with other tasks demanding your attention, you might’ve simply circled that date on your calendar and moved on. But something didn’t seem right. By comparison, here’s what my account page for my personal The Platinum Card® from American Express looked like at the same time:
While my personal Amex Platinum card clearly told me the date my payment was due, my Business Platinum card had Amex’s suggested “Please Pay By” date. After calling an Amex rep and digging a little deeper into my statement, I learned that I wouldn’t actually be charged a late fee as long as I paid my bill in full by Jan. 19, 2019, more than two full weeks after the date Amex suggested I pay.
It’s important to be aware of this, since if you think you need to pay your bills two weeks earlier than you have to (to avoid late fees), you may be redirecting funds that could otherwise be used on payroll, inventory and/or growing your business. This two-week squeeze could be especially frustrating to small businesses that are struggling to manage their expenses right now as the ongoing coronavirus-induced recession continues to drag on the economy.
If you’re wondering how it can possibly be legal for a bank to mislead its card holders about payment due dates, the answer is that it might not be. Subsection 201 of the CARD Act says the following about late payment disclosures:
‘‘(A) LATE PAYMENT DEADLINE REQUIRED TO BE DISCLOSED.—In the case of a credit card account under an open end consumer credit plan under which a late fee or charge may be imposed due to the failure of the obligor to make payment on or before the due date for such payment, the periodic statement required under subsection (b) with respect to the account shall include, in a conspicuous location on the billing statement, the date on which the payment is due or, if different, the date on which a late payment fee will be charged, together with the amount of the fee or charge to be imposed if payment is made after that date.”
The CARD Act references consumer credit plans, so it’s unclear whether these same regulations would apply to the Business Platinum, which is both a business credit card and unlike typical credit cards, the card allows you to carry a balance for certain charges, but not all. Either way, Amex’s behavior is at odds with the way Congress wants card issuers to treat their customers
Nowhere on my five-page monthly statement is there any mention of what if any late fees I would owe on what date. The only acknowledgement of any late fees is: “You may have to pay a late fee if your payment is not received by the Next Closing Date.”
Amex has actually come under fire for its reporting of due dates before, settling and paying an $85 million dollar fine in 2012 for labeling the “Please Pay By” date as the actual due date on the account.
It’s easy to trust a company that’s willing to analyze your spending to help you earn the most rewards (as Amex does with the 4x bonus categories on the American Express® Business Gold Card; applies to up to $150,000 in combined eligible purchases each calendar year; then 1x). But this is a reminder that you need to be your own advocate. If you have an Amex card, it’s worth double-checking the language around your payment due date to make sure you don’t feel compelled to pay large bills earlier than you need to.
For rates and fees of the Amex Business Platinum card, please click here.
Featured image by Eric Helgas/The Points Guy
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