topic Re: ANSWERED: Why AMEX Only Allows One Payment In The First 30 Days in Credit Cards

ANSWERED: Why AMEX Only Allows One Payment In The First 30 Days

RicHowe — Sun, 18 Mar 2018 06:42:34 GMT

One of the most common questions that is posed on the forum is in regard to American Express' policy of only allowing one payment through the online portal within the first 30 days of linking your bank account.

Since I had this same question when I was a new AMEX cardmember, I thought I would try and explain the reasoning behind the policy.

WHY ONLY ONE PAYMENT
New cardholders are frequently disturbed and perplexed to find that AMEX will not allow you to make multiple payments through the online portal within the first 30 days of creating your account AND linking a bank account to fund payments. Why would AMEX prevent me from making a payment? This doesn't seem to make sense! Don't they want my money? This is a stupid policy! What difference does it make?

First, Some Background
American Express has "historically" been a very conservative bank. Although it isn't entirely true today; once upon a time, it used to be more difficult to become a cardmember because they had more stringent underwriting to even be approved for their green charge card. Still today, their bank-issued credit cards (e.g BCE, BCP, ED, EDP) have slightly higher underwriting standards than the co-branded credit cards (which is why some can be approved for a Delta Gold card but be declined for the Blue Cash Everyday card). I wanted to point out what some might consider obvious for reasons what will be apparent later.

Second, Automated Clearing House (ACH) transactions
Have you ever noticed that when you make a payment on your AMEX card, the funds usually take a day or two to post to your checking account? That's because when you make your payment, AMEX initiates an ACH transfer of the funds from your banking account to AMEX. Since these funds must be audited and routed through the federal reserve system, these batch settlements cause the lag in time between the actual transaction and it's eventual settlement. This is important to remember.

Now back to our regularly scheduled programming
We all know that there are nefarious people who will open credit card accounts either through identity theft, or simply applying for a card using some other fraudulent method. We'll call this guy Black Bart. Bart also likes to open up fraudulent checking accounts at banks using these same means. Using a stolen or otherwise duplicitous AMEX card, Bart charges as much as he can with these cards and schedules payments to be made through their fraudulent checking accounts (yes there is actual money in the checking account). Bart knows that AMEX will initiate the ACH transfer and they will get a confirmation that there are funds cover the payment, but immediately after scheduling the payment, he withdrawals the money leaving the account empty. Bart has swindled both the merchant he purchased goods and services from, and left both the merchant and AMEX hanging.

CONNECTING THE DOTS
AMEX is unique from Visa and MasterCard in that they are BOTH the card issuer AND the acquiring bank. They benefit from making money from both the swipe fees and the discount fees charged to the merchant. They also have another huge advantage that neither Visa and MasterCard have, which is the ability to see how you spend AND pay your credit obligations. Over time, AMEX builds a really good profile of your spending and payment habits. Being the "conservative" bank that they are, they simply want to ensure that it is you making the purchases and payments and not Black Bart. In their determination, 30 days from linking a bank account for payment is enough to know whether your account is legitimate or not.

But I want to make multiple payments!
Often, those who are re-building their credit fear getting back into debt (a good fear to have) - they want to ensure that whatever they charge gets paid right away and they are not charged interest (another good idea). While is is simply fine to make one payment a month to AMEX, if you feel the need to make mid-cycle payments and you are still within the first 30 days of linking your bank account, you can call a CSR and request that they pull the funds from your linked bank account. They will be happy to do so. After the first 30 days from linking your bank account, you will be free to make mid-cycle payments whenever you have posted charges on the account.

A Final Caveat
If you do make a payment and for whatever reason that payment is returned unpaid, you will find your cards shut off (AMEX is always keeping a watchful eye out for Black Bart), so please make sure this never happens.

Relax! Enjoy your cardmembership. I'll see you in the Centurion Lounge!

Re: ANSWERED: Why AMEX Only Allows One Payment In The First 30 Days

red259 — Sun, 18 Mar 2018 05:31:01 GMT

Nice answer. I haven't tried this yet, but does this 30 day rule apply to new amex cards when you already have prior amex cards with the same bank account linked?

Re: ANSWERED: Why AMEX Only Allows One Payment In The First 30 Days

RicHowe — Sun, 18 Mar 2018 05:34:41 GMT

@red259wrote:
Nice answer. I haven't tried this yet, but does this 30 day rule apply to new amex cards when you already have prior amex cards with the same bank account linked?

Good question. The 30 day rule applies to newly linked bank accounts, not to your credit cards. This is why I make a point to say "30 days from linking your bank account" as opposed to 30 days from card opening. For instance, I recently got the BCE card but had already linked my bank account for both the Delta Platinum and Platinum charge. I was able to make payments as necessary.

Re: ANSWERED: Why AMEX Only Allows One Payment In The First 30 Days

Gmood1 — Sun, 18 Mar 2018 05:42:40 GMT

I've also noticed payments are registered instantly on my Amex business cards verses the personal cards. In other words, the credit limit is updated in real time.

By the way OP, my 3 year old loves your Avatar!😀 She's a Mickey and Minnie mouse fanatic. 😂

Re: ANSWERED: Why AMEX Only Allows One Payment In The First 30 Days

Anonymous — Sun, 18 Mar 2018 05:43:33 GMT

I have 5 cards from Amex and have never been denied or had a payment paused or pend until after the first 30 days. I have paid all my cards multiple times before the first 30 days were up. I have OCD like that, as soon as my transactions post, I pay them.

Re: ANSWERED: Why AMEX Only Allows One Payment In The First 30 Days

Anonymous — Sun, 18 Mar 2018 11:12:59 GMT

Very grateful for your post OP...

Re: ANSWERED: Why AMEX Only Allows One Payment In The First 30 Days

UpperNwGuy — Sun, 18 Mar 2018 11:44:06 GMT

I suspect that similar fraud concerns explain why some other card issuers delay posting payments to new accounts for periods of 7-10 days.

Re: ANSWERED: Why AMEX Only Allows One Payment In The First 30 Days

digitek — Sun, 18 Mar 2018 11:37:41 GMT

Never put it together that Amex runs their own payment network and also issue their own cards.

Thanks for the post, explains some things.

Re: ANSWERED: Why AMEX Only Allows One Payment In The First 30 Days

simplynoir — Sun, 18 Mar 2018 14:12:39 GMT

@Gmood1wrote:
I've also noticed payments are registered instantly on my Amex business cards verses the personal cards. In other words, the credit limit is updated in real time.

Really? In my experience the limit is immediately available - both personal and business - as soon as the payment is submitted even if it takes a day or two to officially post.

Re: ANSWERED: Why AMEX Only Allows One Payment In The First 30 Days

Gmood1 — Sun, 18 Mar 2018 14:25:02 GMT

@simplynoirwrote:
@Gmood1wrote:
I've also noticed payments are registered instantly on my Amex business cards verses the personal cards. In other words, the credit limit is updated in real time.
Really? In my experience the limit is immediately available - both personal and business - as soon as the payment is submitted even if it takes a day or two to officially post.

Well that explains it. Being you are Simplynoir ( The Bee's knees of Amex) would make all the difference in the world.😉

Yeah, not sure why it's like that for me Noir. I do have several bank accounts linked to the personal side. Maybe I used an account thats not used regularly. I'll have go back and check it out.

However, I'm sticking with the bee's knees theory or hypothesis.😁

Re: ANSWERED: Why AMEX Only Allows One Payment In The First 30 Days

BronzeTrader — Sun, 18 Mar 2018 14:28:04 GMT

You can just make whatever many payments you want from your own bank. Problem solved. So easy. Do not need to analyze all this....

Re: ANSWERED: Why AMEX Only Allows One Payment In The First 30 Days

simplynoir — Sun, 18 Mar 2018 14:30:13 GMT

@Gmood1wrote:
@simplynoirwrote:
@Gmood1wrote:
I've also noticed payments are registered instantly on my Amex business cards verses the personal cards. In other words, the credit limit is updated in real time.
Really? In my experience the limit is immediately available - both personal and business - as soon as the payment is submitted even if it takes a day or two to officially post.
Well that explains it. Being you are Simplynoir ( The Bee's knees of Amex) would make all the difference in the world.😉
Yeah, not sure why it's like that for me Noir. I do have several bank accounts linked to the personal side. Maybe I used an account thats not used regularly. I'll have go back and check it out.
However, I'm sticking with the bee's knees theory or hypothesis.😁

I will say while I have several bank accounts set up I do primairly use one to pay off on the personal side it being a local bank while on business side I use several.

Re: ANSWERED: Why AMEX Only Allows One Payment In The First 30 Days

Shadowfactor — Sun, 18 Mar 2018 14:36:34 GMT

I don’t have any business cards with Amex so I can’t speak to the business side.

But the personal side. When I make a payment to Amex on my Revolver. The available credit updates immediately and is available for use. I use three different bank accounts at three different banks for payments and they all reflect immediately.

Re: ANSWERED: Why AMEX Only Allows One Payment In The First 30 Days

Gmood1 — Sun, 18 Mar 2018 14:50:15 GMT

Do you guys have AUs bank accounts linked to your Amex accounts? Where they can pay their balances directly?

Re: ANSWERED: Why AMEX Only Allows One Payment In The First 30 Days

Shadowfactor — Sun, 18 Mar 2018 14:53:03 GMT

I do have AU’s on both of my Amex accounts.

The PRG has my mother but she doesn’t have online access setup. I have her account linked to my online account. If she needs to make a large purchase. I just call Amex and tell them. Then withdraw the money from her account using my login. Never had an issue

On my Delta Gold. I have my fiancé but she’s only made payments about 10 times through her own login. Her bank account is linked to my login and also the same account is linked on her login. ( she has her own Amex cards as well). The only charges she puts through the card are bills if we need to split them and I’m away for work. So every charge that gets made Gets paid by 2 different banks.

Re: ANSWERED: Why AMEX Only Allows One Payment In The First 30 Days

Anonymous — Mon, 19 Mar 2018 00:23:53 GMT

umm I have made like 4 payments on my Amex card since i recieved it a week ago. I dont understand this rule. Who does it apply too?

The card has only been open for 2 weeks.

Re: ANSWERED: Why AMEX Only Allows One Payment In The First 30 Days

Anonymous — Mon, 19 Mar 2018 00:54:33 GMT

A few comments in green.

@RicHowewrote:

Second, Automated Clearing House (ACH) transactions
Have you ever noticed that when you make a payment on your AMEX card, the funds usually take a day or two to post to your checking account? That's because when you make your payment, AMEX initiates an ACH transfer of the funds from your banking account to AMEX. Since these funds must be audited and routed through the federal reserve system, these batch settlements cause the lag in time between the actual transaction and it's eventual settlement. This is important to remember.

Isn't this is true for every issuer (except when you use a bank account for that issuer)

Now back to our regularly scheduled programming
We all know that there are nefarious people who will open credit card accounts either through identity theft, or simply applying for a card using some other fraudulent method. We'll call this guy Black Bart. Bart also likes to open up fraudulent checking accounts at banks using these same means. Using a stolen or otherwise duplicitous AMEX card, Bart charges as much as he can with these cards and schedules payments to be made through their fraudulent checking accounts (yes there is actual money in the checking account). Bart knows that AMEX will initiate the ACH transfer and they will get a confirmation that there are funds cover the payment, but immediately after scheduling the payment, he withdrawals the money leaving the account empty. Bart has swindled both the merchant he purchased goods and services from, and left both the merchant and AMEX hanging.
Probably not both. Either Amex will pay the merchant (and take the loss) or they won't pay, and only leave the merchant out of pocket. Usually depends on various rules about card type (chip or not), merchant's POS etc.
CONNECTING THE DOTS
AMEX is unique from Visa and MasterCard in that they are BOTH the card issuer AND the acquiring bank. They benefit from making money from both the swipe fees and the discount fees charged to the merchant. They also have another huge advantage that neither Visa and MasterCard have, which is the ability to see how you spend AND pay your credit obligations. Over time, AMEX builds a really good profile of your spending and payment habits.
The first part is indeed an advantage for Amex (and in a perfect market would lead them to charge LOWER swipe fees, but apparently not!) Don't get your second part at all. Any issuer, such as Chase, can see what you have charged on their cards and how quickly and well you pay them. Amex, as far as I can see, has nothing special here,, unless you also bank with them, but that applies to any other bank issuer as well. What do you mean?

Re: ANSWERED: Why AMEX Only Allows One Payment In The First 30 Days

BronzeTrader — Mon, 19 Mar 2018 01:09:30 GMT

Give you a good example. A minor in my family opened a BCE card with a $500 CL. The welcome offer was $250 for $2,000 spending. It also came with a 10% offer with up to $2,000 Amazon purchases. The welcome offer is a total of $450 cash.

Within the first month, we put on $1,800 purchases. We paid $1,700 (7 separate payments) from our bank account. Within 1.5 months, we met all the spending requirements (most from Amazon). It was one of the easiest SUB to meet.

You are just not limited by making the payments out of AmEx. I do not even like to store my payment info at each bank...

Re: ANSWERED: Why AMEX Only Allows One Payment In The First 30 Days

Anonymous — Mon, 19 Mar 2018 01:16:50 GMT

@BronzeTraderwrote:
Give you a good example. A minor in my family opened a BCE card with a $500 CL. The welcome offer was $250 for $2,000 spending. It also came with a 10% offer with up to $2,000 Amazon purchases. The welcome offer is a total of $450 cash.

Within the first month, we put on $1,800 purchases. We paid $1,700 (7 separate payments) from our bank account. Within 1.5 months, we met all the spending requirements (most from Amazon). It was one of the easiest SUB to meet.

You are just not limited by making the payments out of AmEx. I do not even like to store my payment info at each bank...

Yes, I suspect the "rule" referred to by OP is just that you can make one payment FROM the Amex website in the first 30 days. Not sure what happens if you link more than one bank there. Are you able to do one per bank, or just one in total?

Regardless, at best it allows Amex to confirm that they can pull from the linked account and receive their money. You may never use that account again.

Re: ANSWERED: Why AMEX Only Allows One Payment In The First 30 Days

BronzeTrader — Mon, 19 Mar 2018 01:24:33 GMT

I think the OP observation is true. I've also noticed this. But we got around with it with paying FROM my bank. Now I saw we have two bank accounts linked to this AmEx account, but I do not recall if we made one or two payments FROM AmE at that time.