American Express Will Hold Your Miles Hostage If You Pay Late

November 19, 2009 at 5:24 PM | by Omri | Comments (0)

The corporate sharks at American Express apparently see no reason why Delta, United, and American should get to levy random fees while they have to settle for regular, reasonable, generally accepted fees. How old fashioned! So the credit card, which is cobranded with Delta, JetBlue, Hilton, and Starwood Hotels, is introducing a new fine for customers who are late on their bills.

Not only will those customers have to pay all the normal late fees, but they'll also have to pay an additional fee if they want the points that they've earned to get transferred to their hotel loyalty accounts or frequent flier programs. According to Yahoo, it works like this:

Pay your bill on time or forfeit the miles or points you thought you earned for making purchases on your card during that month... beginning in January rewards won't be transferred to loyalty accounts with those partners if you are late paying your bill. You'll be hit with a $29 reinstatement fee if you want the rewards back. That fee is on top of the late-payment fee � $19 or $38 depending on your balance. A penalty interest rate, currently 27 percent, would be assessed on future balances.

We especially like the touch of targeting this new fee at travelers, aka the kinds of people who might be out of town and let a credit card payment fall to the bottom of a "to do" mail pile. We'd lash out specifically at American Express, but it seems that Citi and JP Morgan Chase, cobranded with American Airlines and United respectively, have similar albeit vague policies that penalize late payers by hitting their points.

At least this isn't a transparent attempt to dodge Congress's new credit card regulations, which limited the amount a company could penalize late payers and set ceilings on fees. Naturally Congress didn't think to limit the kinds of fees companies could charge, because who could ever imagine that someone in a boardroom would think of attacking a "loyalty" program. Ticky-tack fees just aren't the kinds of things that are known to inspire loyalty.

[Photo: Andres Rueda / Wiki Commons]

Related Stories:
· Another credit card fee is about to fly [AP]
· Credit Cards [Jaunted]
· Frequent Flier Programs [Jaunted]

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