How do charge cards work if god forbid you didn't pay it all off per month?

[Anonymous]

So, I was wondering how a charge cards works. I know you're required to PIF every month BUT what IF you didn't? Do they shut you down or just charge huge fees?

[Mattopotamus]

Well if you get in their good graces, they will allow you to carry a balance for 60 days.  There are fees and the interest would be pretty high.  Different charge cards have different fees. 

[ojefferyo]

---

@Anonymous wrote:

So, I was wondering how a charge cards works. I know you're required to PIF every month BUT what IF you didn't? Do they shut you down or just charge huge fees?

---

I would say if you have been with them for awhile they may slap you with some fees and expect you to pay it ASAP. Now if you were a new cusomter then maybe they'll just shut you down completely and want the payment immediately.

[Kevin86475391]

As I understand it (I personally don't have and don't want a charge card even though I do PIF) many of them do have a pay over time option. If you're interested here's a link to the feature from American Express:

https://online.americanexpress.com/myca/lending/enroll/us/action?request_type=payovertime

[Skye12329]

@Kevin the pay over time option is if you qualify. Its not always a guranteed thing.

As for OP i read online that they might just shut down your card. Is this a guranteed thing? Possible, otherwise i dont think the APR is horrible.

[SouthJamaica]

---

@Anonymous wrote:

So, I was wondering how a charge cards works. I know you're required to PIF every month BUT what IF you didn't? Do they shut you down or just charge huge fees?

---

My advice: don't find out. Amex is a mean company.

[Chris679]

read the cardholder agreement

[manyquestions]

---

@Anonymous wrote:

Do they shut you down or just charge huge fees?

---

Probably both. I imagine it would be similar to not meeting the minimum payment on a revolving card. With a charge card the minimum payment is typically payment in full unless other "pay over time" options are available.

[takeshi74]

---

@Anonymous wrote:

So, I was wondering how a charge cards works. I know you're required to PIF every month BUT what IF you didn't? Do they shut you down or just charge huge fees?

---

If you don't have pay over time you'd incur fees and then lates after 30+ days.  At some point if it dragged on you'd see account closure.  It's not just the account itself that matters.  Your other creditors routinely SP you and lates would be red flags to them.  Make sure you can pay in full every statement.  That said, spending what you don't have is a bad idea even with credit cards.

---

@Chris679 wrote:

read the cardholder agreement

---

^ This.  Always read the terms.  You can find them on the creditor's web site in most cases.  Here's the full agreement for the AmEx PRG as an example:

https://www.americanexpress.com/us/content/pdf/cardmember-agreements/premier-rewards-gold/PremRwrdGold.pdf

[UncleB]

Back in the '90s I unfortunately got to find out, and with Amex...

I have to say that they were surprisingly easy to work with... my account was several years old at that time and I had always paid timely until then.  They allowed me to make monthly payments at a high interest rate (I forget the exact APR, but it was high) and I believe there was a monthly 'late' fee as well, since technically it was late until it was PIF.  Of course the account was suspended to new charges until it was paid, but after they received the last payment I called them to verify it had been received and the CSR cheerfully told me my account was open to new charges.  I was pleasantly surprised, and had no further issues due to the situation.

All this being said, I would suggest that Amex in particular would look at the overall account history and experience, and base their action on that.  In my own case, I was able to make substantial payments monthly until I brought it current, which likely helped (it took 4 or 5 months, IIRC).  I would also not recommend this to anybody; there are much cheaper ways to carry a balance, and there is no guarantee that Amex would allow you to keep the account afterward (I could have just been lucky).

Hope this helps. 

(Note:  All MR points for the transactions paid in this manner are forfeited unless you pay a service charge to have them reinstated.)