September 07, 2010
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News: AmEx Has Some Explaining To Do
Unlike American Express (AmEx) will have some explaining to do to its customers. A recent study indicated that the premier credit card company hasn't been calculating cardholder's past due figures accurately. The study indicated that American Express reports that online customers that have only been past due for a couple of days is 30 plus days past due. This type of reporting can hurt credit cardholder's credit scores because a major portion of the score is calculated based on the cardholder's payment history. The news is apt to make American Express credit cardholders a bit anxious over concerns relating to their credit scores.
The creator of the study said he chose to look more closely at the credit card reporting activities of credit card companies as it relates to late payments. He was motivated by his own past due situation of less than 15 days. When he made his American Express payment online, he was informed that he was 30 plus days past due. In fact, he was only 12 days past due. After contacting AmEx, he was told that it is a "nomenclature" problem and that the company was working on getting it fixed. According to the report, American Express claims that a different nomenclature is used for the company's internal aging than for the online system. However, the company maintains that it does not change the way they apply penalties for late payments. The company said they are working on clarifying the language online so that customers are not confused.
The Credit CARD Act of 2009 prohibits card issuers from changing the cardholder's interest rate before the account is 60 days past due. The question is; is it based off of the due date or the odd method by which American Express has been calculating its online past due notice which would give cardholders less time to set their account straight before their interest rate was increased? According to a statement from American Express, the company does not increase the interest rate until the account is 60 days past the payment due date.