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While banks and credit card issuers aren’t always consumer friendly, things have gotten a lot better for card holders since the financial crisis of 2008. New legislation, especially the Credit Card Accountability, Responsibility and Disclosure Act, have 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.

‘Please Pay By’ Dates Are Only Suggestions

I recently applied for The Business Platinum® Card from American Express to take advantage of a tiered 75,000-point welcome offer before Amex raised the annual fee to $595 this month. New applicants can earn 50,000 Membership Rewards points after spending $10,000 in the first three months and another 25,000 points if they spend $20,000 in the first three months, for a total of 75,000 points (worth $1,500 based on TPG’s valuations).

Spending $20,000 in three months is a lot, so I’ve been closely monitoring 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 simply circle 1/9/19 on your calendar and move 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:

While my personal Amex Platinum card has clearly told me the date my payment is due, my Business Platinum card has 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 1/25/19, 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.

Confusing, Much?

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 a charge card. Either way, it’s clear that 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.

Bottom Line

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). But this is a reminder that you need to be your own advocate. If you have an Amex charge 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. 

Know before you go.

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