Negative Change of T&C - Charge Card

[aasz1978]

From my snail mail today:

Effective 17 April 2011, the introduction of the concept of "liquidated damages" replacing the term "Late Payment Fee".

If you do not pay the full closing balance by the due date on your monthly statement, you are in default and you agree that we may charge you Liquidated Damages as specified in the Financial Table on any overdue amount. Liquidated Damages may themselves be included in a future closing balance in any subsequent statement until paid in full.

Liquidated Damages will be charged on the overdue amounts at three percent (3.0%) or $20, whichever is greater.

As at 1 June 2011 - Main cardholder is responsible for supplementary card.

Ends

I must admit, this kills the attractiveness of the card because:

1. Charge Card is supposedly 55 days interest free. My statement indicates only 44 days. Usually, balances are payable without interest/penalty as long as paid before the next statement is issued, this time, it hits you the moment it goes past 44 days.

2. This is clearly a law avoidance (from 1 July, late payment fee is abolished??) attempt by renaming late payment fee as "liquidated damages" which is the same terms used in CARE or Wilson Car Park.

3. Interest is now effectively 3% of balance owing per month as opposed to 20% pa. If you happen to forget, that $3 per $100 is going to hurt big time. Very costly for an innocent oversight. That 3% per month is equivalent to at least 36% pa (but by stealth since they don't mention 36% anywhere).

4. Penalty is hit PER MONTH instead of usual once.

Like to hear you guys opinion...

 

[ric_melb]

I too received the new conditions, but didn't read them as carefully as you.
However I must agree with you that the new conditions are more onerous than before.
Given that I have had my Gold Amex charge card for 30 years, I have no intention of changing it. Creature of habit!

However I long ago put my card on to direct debiting to my bank account, to avoid late payments for any reason, in particular when travelling.
Therefore I have never had a late payment, never look like having one, and never look like paying liquidated damages. And guess I am used to the 44 day period by now.
So in my case the changes won't affect me as far as I can see.

In your case, and for others, this may not be so.

 

[serfty]

I had a close look at that last night - also a close look at my most recent statement.

In relation to the charge cards I received it for has been the case that if paid before the next statement is due, no "Liqudated Damages" have been applied.

The new T&C indicate if full payment made after the "payment date" listed on the statement (but before the next statemenis due) then "Liquidated Damages" may be charged.

Looking at the most recent statement (6th March) - there is no pay by date indicated other than the usual "Pay Immediately - but no later than 21 days from statement date printed above".

I will be looking closely at my next statement for a "Pay(ment) Due/By Date".

 

[SimonM]

Looking at the most recent statement (6th March) - there is no pay by date indicated other than the usual "Pay Immediately - but no later than 21 days from statement date printed above".

I will be looking closely at my next statement for a "Pay(ment) Due/By Date".

For some time now my gold charge card statement has had words such as these on the latest, "Please ensure your payment reaches us by 14/03/2011 to avoid incurring Late Payment Fees and/or Charges."

I think this started happening about a year ago.

 

[serfty]

For some time now my gold charge card statement has had words such as these on the latest, "Please ensure your payment reaches us by 14/03/2011 to avoid incurring Late Payment Fees and/or Charges."

I think this started happening about a year ago.

I'm referring to a "Qantas" Business Charge card

 

[equus]

Looking at the most recent statement (6th March) - there is no pay by date indicated other than the usual "Pay Immediately - but no later than 21 days from statement date printed above".

For a Platinum Charge card, the statement wording seems to have changed - but quite a while ago.

The last statement I saw with the "Please pay immediately but no later than 21 days from the statement date" was issued on 4 September 2009.

Since then (and including the most recent on 4th March), the message have been "Please ensure your payment reaches us by dd/mm/yy to avoid incurring Late Payment Fees and/or Charges". (where the date is 14 days post the issue date).

Given that the changes to T&Cs removes the late payment fee, and introduces the concept of a due date, I would expect changes to the statement, as well as the message. I would also assume that the due date would not actually be only 14 days after the statement, considering the Platinum Credit card gives longer than this (and the Charge Card currently actually allows the full month).

It is also interesting that the T&Cs refer to the "Financial Table" which was provided when the account was established - and no update has been provided. I know the letter referred to the 3.0% or $20, but that is not an updated Financial Table. I can't find the original just now (and have had no joy finding the current T&Cs online either), so it would be interesting to know if the Liquidated Damages rate has been previously defined anywhere.

 

[mick]

I'm referring to a "Qantas" Business Charge card

As a comparison, my Qantas Corporate Amex Charge statement shows "Pay by DD MMM YYYY" next to the new balance amount at the top and it also has a line that reads "Please pay $xx_XX immediately, but no later than DD MMM YYYY. Thank you.".

Maybe it's a customised message for us because they're sick of my company paying late all the time...

 

[yohy?!]

This is a significant change in philosophy for applying the liquidiated damages/late payment fee at due date instead of 30 days.

I'll be interested to see if they actually start enforcing this in June as there will be many many legacy customers who routinely pay between 21-30 days after statement date.

Or in fact it may only be 'threat' clause to use against habitual late payers

 

[Diesellife]

Just called Centurion team and the CS confirmed that the grace period will still apply.
They are just re-defining the T&C.

So I will continue to pay 3-5 days before the next statement!

 

[zig]

I also received the amended T&Cs, but admit that I didn't read them too closely, so glad I read this thread. I am now used to paying within 14 days of the statement date.
When I have occasionally made a payment late due to travelling etc Amex have always been very happy to reverse any late charges etc with a quick phone call. I wonder if this will still be their attitude with liquidated damages.??

 

[yohy?!]

I also received the amended T&Cs, but admit that I didn't read them too closely, so glad I read this thread. I am now used to paying within 14 days of the statement date.
When I have occasionally made a payment late due to travelling etc Amex have always been very happy to reverse any late charges etc with a quick phone call. I wonder if this will still be their attitude with liquidated damages.??

Liquidated damages is the same thing as a late payment charge in this case - typically you can have 1 fee waived per year for 'good will'

 

[lovestotravel]

Just called Centurion team and the CS confirmed that the grace period will still apply.
They are just re-defining the T&C.

So I will continue to pay 3-5 days before the next statement!

Yep I recently changed my payment routine to this and rang them about another matter and they said "You have never paid late before" so you'll be fine!

I used to pay at the 21 days after statement date, then 14 days after the date, but the past few months have changed to about 25 days after statement date.

:mrgreen:

 

[aasz1978]

Liquidated damages is the same thing as a late payment charge in this case - typically you can have 1 fee waived per year for 'good will'

The main issue here is clarity.

My statement does have a due date (similar to the one that says "to avoid late payment fee please pay by mm/dd/yyyy) however, as you can see in this forum, the correct interpretation (albeit implied) of what is considered "not late" has always been payment before next statement period.

If the change is only about changing the word late payment fee into liquidated fees but not changing the "not late" interpretation, that would be ok in my view.

But dare I ask the members of this forum if you would still dare to try paying above the 14 days line and see what pops up in the end.

I don't think judging from the tone of the responses so far that we have a definite assurance.

Of course I will call over the next few days for clarification but sometimes, assurances from people from the phone doesn't guarantee you won't see 3% being charged nevertheless. And if you spend something like $10k a month, that 3% would be $300 in fees. That would be a massive cost for an experimental thing.

That aside, if this is 55 to 44 days by stealth, then this card loses out a lot to its Credit Card Reserve cousin equivalent.

 

[Diesellife]

But dare I ask the members of this forum if you would still dare to try paying above the 14 days line and see what pops up in the end.

I don't think judging from the tone of the responses so far that we have a definite assurance.

Of course I will call over the next few days for clarification but sometimes, assurances from people from the phone doesn't guarantee you won't see 3% being charged nevertheless. And if you spend something like $10k a month, that 3% would be $300 in fees. That would be a massive cost for an experimental thing.

That aside, if this is 55 to 44 days by stealth, then this card loses out a lot to its Credit Card Reserve cousin equivalent.

Personally (after contacting the amex CS), I don't think Amex is tightening the rules here. The business card still has 51 days interest free, so I think it's still safe to pay >44 days but <51 days. In any events, I will not change my payment pattern.

 

[lovestotravel]

And if you spend something like $10k a month, that 3% would be $300 in fees. That would be a massive cost for an experimental thing.

If you can afford to spend $10k per month, $300 is nothing!

 

[flyer001]

re Amex Platinum, You realise that if you have a debit of $1 and do not pay this you will be charged 2000% per month. I find the 21 days allowed from date on statement very onerous, especially as Amex is always late sending statement [I live overseas] and often it arrives after the due date. good part is so far Amex has always cancelled overdue charges when phoned about these.Re liquidated damages, I thought legally you had to sign that you would accept these, contracts cannot be changed retroactively unless agreed to by card holder, can someone enlighten us?

 

[trippin_the_rift]

If you can afford to spend $10k per month, $300 is nothing!

It's actually much higher than $300, as you'll need 2 complete cycles of paying the entire balance + interest to get back the interest free status. So depending on current balance and future spend in the following two months, this could easily be $1000+ in additional charges for a 1 day late payment.

 

[QF029]

I've always just paid before the next statement. I plan to continue this and the first time I'm charged interest I'll cancel the card. I suspect they'll also waive this the first time it happens given I've never been a day late on a payment.

P.S. You can get statements by email.

 

[equus]

It's actually much higher than $300, as you'll need 2 complete cycles of paying the entire balance + interest to get back the interest free status. So depending on current balance and future spend in the following two months, this could easily be $1000+ in additional charges for a 1 day late payment.

I don't think so. You are thinking of interest free periods on Credit cards where this is often the case. The Charge card situation which is the subject of this thread is completely different, and there is actually no "interest" involved (and hence no interest free period to regain), just "liquidated damages". The "liquidated damages" are not expressed as a "per annum" amount (which interest would be), but simply as a flat percentage.

In theory, once you are one day late, you get hit with 3% (or $20 whichever is less) of the overdue amount. This appears as a charge. Everything remains due immediately. At the end of the next statement, the damages appear as a charge (along with anything else - new charges, any amount you have still not paid etc). This is all due by the "due date" (either overdue so pay now, or when ever the actual due date may be). Fail to pay the entire amount by the next due date, get hit with another 3% on all amounts still overdue.

In theory, there is no monetary difference between paying 1 day late and 29 days late, but YMMV between the scenarios, in trying to get a waiver of any charges , and of course the payment history may have a significant impact on future dealings....

 

[Ricardo]

I've always just paid before the next statement. I plan to continue this and the first time I'm charged interest I'll cancel the card. I suspect they'll also waive this the first time it happens given I've never been a day late on a payment.

P.S. You can get statements by email.

Im with QF029, I have had various Amex charge and credit cards since 1998 and have always paid the full balance (for charge cards) before the next statement date, its never been a problem, I will test them and see if I get charged any fee then cancel or maybe threaten to cancel LOL. I guess the key word in the letter was MAY, as in they MAY charge the fee if you dont pay the full amount on the due date. They also take payments over the phone and internet as long as you have registered your bank account details which can be useful if your busy or out of town etc.