Consequences Of Not Paying Off Charge Card

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kcm7
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Consequences Of Not Paying Off Charge Card

Postby kcm7 » Fri May 30, 2014 2:53 pm

I've never had a charge card -- only revolvers, and I've been wondering about this: What are the consequences if you don't pay your charge card (like a Green card or a PRG) off in full and on time?

I checked the Green card's terms online, and it says the penalty fee is $37 or 2.99% of the balance, whichever is greater, if you fail to pay on time two billing periods in a row.

Are there any other bigger sticks they use -- like freezing your account if you keep not paying on time?

Because I was thinking, say you have a $5,000 balance on a charge card you can't pay off in one month. You could just then pay it off over few months and eat the fees. Is there anything stopping you from doing that (besides the pain of paying a pretty-darn-high 2.99% every month)?

Disclaimer: I'd never do this, myself! Just something I was curious about.
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ncosky290
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Postby ncosky290 » Fri May 30, 2014 5:01 pm

Amex has a feature called "pay over time" which you would have to enroll in. Once doing this you can have certain charges and amounts rolled over into monthly payments. If you do not do this they will suspend your account until paid in full.
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thom02099
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Postby thom02099 » Fri May 30, 2014 7:21 pm

kcm7 wrote:I've never had a charge card -- only revolvers, and I've been wondering about this: What are the consequences if you don't pay your charge card (like a Green card or a PRG) off in full and on time?

I checked the Green card's terms online, and it says the penalty fee is $37 or 2.99% of the balance, whichever is greater, if you fail to pay on time two billing periods in a row.

Are there any other bigger sticks they use -- like freezing your account if you keep not paying on time?

Because I was thinking, say you have a $5,000 balance on a charge card you can't pay off in one month. You could just then pay it off over few months and eat the fees. Is there anything stopping you from doing that (besides the pain of paying a pretty-darn-high 2.99% every month)?

[color="red"]Disclaimer: I'd never do this, myself! Just something I was curious about[/color].


AMEX can get cranky if payments are not received in a timely manner. As stated above, they would likely suspend the account until it is paid, and could initiate a financial review to determine future credit worthiness.

Since we're dealing with "hypotheticals" (wink, wink) what one could do in a situation to avoid this predicament would be to balance transfer the amount owed on the AMEX card to another card, preferably one that has no fee BT option.

One could also apply for the pay over time option noted above as well; the caveat there is, it's not always offered to all card members, and one could be declined, particularly if one is applying with a substantial charge on the books.
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