American Express Membership Rewards - Delta Skymiles AMEX (and ALL? AMEX) change grace period

The Delta Skymiles AMEX is also changing their grace period. From what I can understand from their fine print, unless you pay your balance in full BEFORE you make any additional new charges, then the new charges will incur finance charges. If you pay your balance in full for the 2nd statement (which may include finance charges for the "new" charges before AMEX received your 1st statement "payment in full"), then those "new" charges between 1st & 2nd statements will not incur *additional* finance charges on your 3rd statement if you pay the 2nd statement in full, but will have already incurred those finance charges from the 2nd statement.

Is this making sense? Once a finance charge is charged (ie on those "new" charges before AMEX receives payment in full for the previous statement), I don't see AMEX ever crediting that back --- what a logistic nightmare. They just won't charge more finance charges on those charges for the next period. And we won't be able to see what finance charges are supposedly for what purchases unless you're a mathematical whiz (and definitely the CSRs won't know).

The CSRs I talked to about this new change were completely clueless. I think I will be using my AMEX cards very carefully, and not very much. This is a SERIOUS downside I see for AMEX vs normal VISA/MC. Hopefully this is not a trend amongst the credit industry.

FYI for mods, this discussion is also on the Delta forum:

http://flyertalk.com/forum/showthread.php?p=3816086

Hopefully we can get these threads joined, but anyway...

I think that the new grace period only applies as a penalty for late payment. If you pay in full by the due date every month, you will not incur finance charges on new purchases. BUT, if you make one late payment, then your new purchases will incur immediate finance charges until payment is received. This continues until you have paid two consecutive monthy statements on time.

[Edited to remove redundant discussion of Previous Balance from other thread.]

I must disagree. It has nothing to do with late payment...only full payments. The only time you will get a grace period on new purchases is if you paid the last 2 statements in full on time. Once you keep a balance for even onw month all purchases after that will have finance charges until you get those 2 consecutive months paid in full. This is an absurd policy, and I have no idea what they are trying to pull (duh! to make money)

Yes, full payment is required for the two-month period in order to eliminate the penalty. But any balance carried forward would have been accruing finance charges anyway, so the penalty is only on new purchases (which would otherwise have had a grace period).

I find the new policy to be confusing, particularly with respect to payments made on time, but while carrying a balance. In the text of the policy, they repeatedly refer to "payment in full of the New Balance," which (as you point out) is NOT merely the "New Activity," but the entire balance owed on your account.

AMEX provides some discussion about the new policy, which doesn't necessarily help to clear things up..

We are changing the grace period applicable to your Account. A 'grace period' is the period of time in which finance charges are not assessed on certain balances. Previously, if you paid the new balance on your prior statement in full by the payment due date, finance charges would not be assessed on purchases during the current billing period. We are changing the grace period so that when you pay the prior new balance by the payment due date, finance charges will be assesed on purchases during the current billing period until the date that full payment of the prior new balance was received; purchases will not have a grace period for the entire billing period in this instance. However, if you paid the new balance on each of your two prior statements by their respective payment due dates, you will not be assessed finance charges on purchases for the entire current billing period. Also, if the previous balance on your billing statement is zero or a credit balance, no finance charges will be assessed on your purchase balance for the billing period. There is no longer any grace period for balance transfers.

They *seem* to be talking about payment in full for purchases made during the prior two billing periods, but that is not how their new policy reads. As it reads, I think you're exactly right. If you don't pay your statement in full every month by the due date, they will impose an immediate finance charge penalty on all new purchases until after you have paid your statement in full by the due date for two consecutive months.

So what's the bottom line here? AMEX is going to provide "credit" cards with no grace period? If so, that's certainly going to make people rethink major purchases. It would be interesting to see a comment from someone at AMEX... any lurkers?

ET, did you have any more luck with the AMEX phone reps?

So what's the bottom line here? AMEX is going to provide "credit" cards with no grace period? If so, that's certainly going to make people rethink major purchases. It would be interesting to see a comment from someone at AMEX... any lurkers?

ET, did you have any more luck with the AMEX phone reps?

I just called to ask and the rep stated that as long as you pay your balance in full by the due date, absolutely no finance charges will accrue. Also, I noticed this change on my Delta SkyMiles card, but not my Starwood. Odd...

From what I've read on both threads, I'd agree on this last interpretation. If you always pay you bill in full every month, it sounds like you'll continue to have a grace period, and you won't have any additional (finance) charges added).

When you DON'T pay your balance in full is where the changes would appear to be. Either the finance charges will start to accrue sooner, and/or it will take longer to get your account back to the point where you finance charges are accrued. You have to wonder what John Q Public will think of it - we have some pretty bright people here on FT, and even we can't come ot a definitely conclusion on what it actually means.

Jeff

I just called to ask and the rep stated that as long as you pay your balance in full by the due date, absolutely no finance charges will accrue. Also, I noticed this change on my Delta SkyMiles card, but not my Starwood. Odd...


FYI-I did get the notice for my Starwood Amex-appears all cards are involved in this scheme.

This policy s*cks. However, they're not the first company to do it. To combat the games CC companies play, I started my own.

My calendar has a recurring "appointment" on the close date of each of my credit cards. On that date I go to their site & get my balance. I then go into my bank account and schedule the payment for about 10 days later.

This ensures that I make the payment before I get the bill in the mail. First USA is notorious for taking 10 days to get a statement in your mailbox. This will also ensure that I won't be a day late and get caught paying interest on 2 months worth of heavy charging, since Amex cards are my primary cards.

It looks like I may be switching over to my diners club for primary use now that they will be accepted at MC merchants. At least the club rewards program is better than membership rewards.

This will also ensure that I won't be a day late and get caught paying interest on 2 months worth of heavy charging, since Amex cards are my primary cards.
As long as you pay in full by the due date (or before the statement closes for charge card products) you won't pay any interest. There's no change to that.

The change is that if you carry a balance you're going to pay a few extra days / weeks.

An interesting point: my Costco True Earnings card appears to NOT have this grace period change. I got a long list of "changes" at the end of my statement and I expected to see the grace period change --- but it was absent. The other changes were there. But my husband's Costco Platinum Cash Rebate card did have the grace period change. I wonder if they are making the change to specific cards they dislike supporting.

OK, it seems if you always have paid your credit card balances in full and continue to do so, then perhaps you won't owe finance charge anywhere. But I really don't see that clearly stated, and I personally wouldn't trust any CSR at this point. I have my doubts because my Macy's account is also mired in credit-doublespeak. They also claim that if you pay in full by the due date, that no finance charges will accrue. But what is galling, is they add the finance charge to your bill total in advance, and that becomes part of the "pay in full" amount. The paper bill claims that the finance charge will be refunded back to you if indeed you pay it in full by the due date, but that has never happened. Also, *the no finance charge if you pay in full* only seems to apply if you make no new charges at all during the new period. This is fact by trial and error, no matter what my bill says or what any CSR says (and also trial by error, credit do not count as payments). I have had to call their CSRs (India call center, talked to even supervisors w/ no clarity) and they always tote the incorrect company line and in the end just credit back all the finance charges manually. I no longer use my Macy's card. They are small amounts here and there, but it is very irritating.

Sorry for the long talk on the Macy's credit card, but I fear problems like those will in the horizon for AMEX with their new rules. It is definitely not worth any more of my time to try to decipher this as there are plenty of other good credit cards out there.