American Express Membership Rewards - Amex credit card payment question

An odd question has occurred to me, given that I will have an end of month statement total of several thousand, but will shortly have a credit of a thousand or so from a cancelled airline ticket.

What constitutes "payment of full balance" to avoid interest charges? Is it the amount paid in by the cardholder, or the sum of all credits into the account?

To simplify thinking, consider the following three scenarios:

In all cases start with a zero balance.

(A) In month 1 I buy a £1000 flexible ticket. Statement balance £1000. In month 2 I cancel the ticket and have it refunded to the card. No other transactions. End of month balance = zero. Did I have to pay anything more in month 2 to avoid interest? (Fairness says no, but is the actual answer yes, £1000?)

(B) In month 1 I buy a £1000 flexible ticket. Statement balance £1000. In month 2 I cancel the ticket and have it refunded to the card. Now I buy a TV for £1000. End of month 2 balance = £1000. Did I have to pay anything more in month 2 to avoid interest? (Fairness says no, but is the actual answer yes, £1000?))

(C) In month 1 I buy a TV for £1000. Statement balance £1000. In month 2 I buy and cancel a £1000 ticket. Total payment into account in month 2 therefore is £1000 which equals my starting statement balance. Did I have to pay anything more in month 2 to avoid interest? If not, repeat ad infinitum for an interest-free £1000 loan.

My experience is that a credit posted to my account for a returned item is the same as a credit for a payment that I mail in. When I have returns (or canceled tix) in a month I will pay less real cash that month, though it eventually will catch up once you stop having a return. In all three of your examples I believe the answer is "no" to the situations you've described.

Do you actually mean 'no' not 'yes'?

An odd question has occurred to me, given that I will have an end of month statement total of several thousand, but will shortly have a credit of a thousand or so from a cancelled airline ticket.

What constitutes "payment of full balance" to avoid interest charges? Is it the amount paid in by the cardholder, or the sum of all credits into the account?

To simplify thinking, consider the following three scenarios:

In all cases start with a zero balance.

(A) In month 1 I buy a £1000 flexible ticket. Statement balance £1000. In month 2 I cancel the ticket and have it refunded to the card. No other transactions. End of month balance = zero. Did I have to pay anything more in month 2 to avoid interest? (Fairness says no, but is the actual answer yes, £1000?)

(B) In month 1 I buy a £1000 flexible ticket. Statement balance £1000. In month 2 I cancel the ticket and have it refunded to the card. Now I buy a TV for £1000. End of month 2 balance = £1000. Did I have to pay anything more in month 2 to avoid interest? (Fairness says no, but is the actual answer yes, £1000?))

(C) In month 1 I buy a TV for £1000. Statement balance £1000. In month 2 I buy and cancel a £1000 ticket. Total payment into account in month 2 therefore is £1000 which equals my starting statement balance. Did I have to pay anything more in month 2 to avoid interest? If not, repeat ad infinitum for an interest-free £1000 loan.

Let me try to answer your questions according to my experience as cardholder:

1. After the "billing cycle" you get the monthly balance and then you make a bank transfer of the amount within the specified period to avoid interest rates or you have agreed (e. g. in Germany) the bank withdrawal from your current account.
In the case of the bank withdrawel they simply take the balance at the day of the statement and wihtdraw this amount. Due to the fact that they have only one billing cycle per month ALL PUCRHASES and ALL REFUNDS made thereafter appear on the next statement.
So as they give you "free credit" during the billing cycle when you buy goods you give them "free credit" until your next statement if you have more refunds than purchases. (In practical view: I think this is very seldom the case).

If you pay by your own you can choose how much the amount is you pay them. So if you pay the "full amount" it's the same procedure as before.
If you pay less, the amount stays open until the refund is processed.

So I think (but never have experienced this my own) they charge the interests like you have an open balance.

So the question to a / b / c is nearly the same. And naturally all refunds are processed in the part of your statement where your purchases are processed with "CR" after the amount indicating that this is a "plus" transaction to your account.
It's not calculated in the part of your account where they state the received payments because of the fact otherwise you would always:
1. Collect points with your refundable ticket
2. Refund it at the payment's section
3. Buy the next etc.

So also the MR points for a refund are deducted.

Hope this helps. @:-)

(C) In month 1 I buy a TV for £1000. Statement balance £1000. In month 2 I buy and cancel a £1000 ticket. Total payment into account in month 2 therefore is £1000 which equals my starting statement balance. Did I have to pay anything more in month 2 to avoid interest? If not, repeat ad infinitum for an interest-free £1000 loan.


There are better ways to get 0% interest.

If you do this repeatedly AMEX / any other credit card companies will close your account.

Do you actually mean 'no' not 'yes'?

Yeah...I fixed it. Thanks.

In my experience on my green card, refunds to the account reduce the balance due indicated on the "Summary of Accounts" page (the initial one you get when you log in) by an equal amount. So if my statement closed with a balance of $1,000, the "Payment Due" field would be $1,000. If then, after the statement closed a refund of $500 posted, the "Payment Due" amount would then be $500. I have paid this reduced amount before and never been charged interest.

So, a payment is a refund, an account credit, or an bank transfer (check or ACH or wire), at least in my experience.