topic Re: Amex - Raises Minimum payment due in Credit Cards

Amex - Raises Minimum payment due

Tonya-E — Tue, 26 May 2020 17:35:34 GMT

I saw on my recent statement that the minimum payment due for Amex has increased. This won't affect anyone that uses the PIF method, but may be noteworthy if you carry a balance. This is the example they provided: To calculate the Minimum Payment Due for each billing statement, we start with the highest of: (1) Interest charged on the billing statement plus 1% of the New Balance (excluding any interest, penalty fees, overlimit amount, and plan balances); or (2) 2% of the New Balance (excluding any penalty fees, overlimit amount, and plan balances); or (3) $40. Then we add any penalty fees shown on the billing statement, up to 1/24th of any overlimit amount, any plan payment due, and any amount past due. Your Minimum Payment Due will not exceed your New Balance. You may pay more than the Minimum Payment Due, up to your New Balance, at any time. EXAMPLE: Assume that your New Balance is $2,900, interest is $29.57, and you have no active plans, overlimit amount, penalty fees, or amounts past due. (1) $29.57 + 1% multiplied by ($2,900 - $29.57) = $58.27 (2) $58 (2% of $2,900) (3) $40 The highest of (1), (2) or (3) is $58.27 If your account has any active plans, overlimit amount, penalty fees, or amounts past due, your Minimum Payment Due will be higher.

Re: Amex - Raises Minimum payment due

UpperNwGuy — Tue, 26 May 2020 19:10:18 GMT

The new minimum is still a mighty low number relative to the outstanding balance.

Re: Amex - Raises Minimum payment due

Tonya-E — Tue, 26 May 2020 19:12:20 GMT

@UpperNwGuy wrote:
The new minimum is still a mighty low number relative to the outstanding balance.

Tis true...but oh my, that's how those minimums get you.....

Re: Amex - Raises Minimum payment due

Anonymous — Tue, 26 May 2020 22:46:43 GMT

I took advantage of some plan it pay over time offers and that increased my minimum payment significantly. Used to be $30 now it's $166! But it's on a 0% interest card (Amex Everyday) so I will be carrying a 19% balance on that for the next yr...slowly paying it down while on my other cards I PIF.

Re: Amex - Raises Minimum payment due

Tonya-E — Tue, 26 May 2020 23:03:48 GMT

@Anonymous wrote:
I took advantage of some plan it pay over time offers and that increased my minimum payment significantly. Used to be $30 now it's $166! But it's on a 0% interest card (Amex Everyday) so I will be carrying a 19% balance on that for the next yr...slowly paying it down while on my other cards I PIF.

Yeah that’s a huge jump! When I saw it I was like well it doesn’t appear too bad until you start having a higher balance. Then when I did the calculations it would be a huge difference. At least it’s at 0% interest though!!!

Re: Amex - Raises Minimum payment due

Anonymous — Tue, 26 May 2020 23:15:25 GMT

Yea once I had the balance plus the multiple plan its - it adds up! I pay a few times a month but it's not my first priority since I can take advantage of the 0% for 12 more mths. I can only imagine how much worse it is on a card that charges interest.

Re: Amex - Raises Minimum payment due

Tonya-E — Tue, 26 May 2020 23:20:57 GMT

@Anonymous wrote:
Yea once I had the balance plus the multiple plan its - it adds up! I pay a few times a month but it's not my first priority since I can take advantage of the 0% for 12 more mths. I can only imagine how much worse it is on a card that charges interest.

I wonder if anyone up here has experienced the increase with interest. I just get curious on things like this. Thanks for commenting! It gives us some perspective.

Re: Amex - Raises Minimum payment due

FlaDude — Wed, 27 May 2020 14:20:58 GMT

I think they might be doing this selectively rather than across the board. I have an ED card that I used for a BT and had been paying pretty close to minimum on, they changed my mininum from 1% to 2% last December on a balance of around $4500. No biggie for me, I PIF before the promotional interest rate expired, but maybe they don't like customers paying minimums on an ongoing basis. They must not have been too spooked, I have over 50 CL accross my Amex cards and they didn't CLD me on any of them.

Re: Amex - Raises Minimum payment due

Remedios — Wed, 27 May 2020 14:23:38 GMT

Minimum payments are not assigned on individual basis.

The amount may differ based on the balance, but calculations are identical across the board.

Re: Amex - Raises Minimum payment due

Anonymous — Wed, 27 May 2020 16:58:22 GMT

@Anonymous wrote:
I took advantage of some plan it pay over time offers and that increased my minimum payment significantly. Used to be $30 now it's $166! But it's on a 0% interest card (Amex Everyday) so I will be carrying a 19% balance on that for the next yr...slowly paying it down while on my other cards I PIF.

Do you mean to say that you utilized Plan it on an existing 0% rate? If so, why? In my mind if your current rate is already 0% then there wouldn't really be a reason for Plan it.

Re: Amex - Raises Minimum payment due

NRB525 — Wed, 27 May 2020 17:17:09 GMT

@Anonymous wrote:
@Anonymous wrote:
I took advantage of some plan it pay over time offers and that increased my minimum payment significantly. Used to be $30 now it's $166! But it's on a 0% interest card (Amex Everyday) so I will be carrying a 19% balance on that for the next yr...slowly paying it down while on my other cards I PIF.

Do you mean to say that you utilized Plan it on an existing 0% rate? If so, why? In my mind if your current rate is already 0% then there wouldn't really be a reason for Plan it.

The Plan It is helpful as it distinguishes the amount you want to "carry" for a balance, during a defined term. The Plan payments pay off that amount during the number of Plan payments. Everything else on the card can be Paid In Full as you go.

With a 0% offer, while it is nice to allow you to carry a balance, one does not want to run up the full CL then pay only minimum payment through the 12 month 0% period, only to find a large open payable balance at the end.

The basic Minimum payment calculations in the opening post are no different from other banks. Paying 1% vs 2% is the difference between paying it off in 100 months vs 50 months. Still a lot of interest in those 4+ years, as long as you aren't charging anything new to the card, which is not the case with the typical balance-carrying cardholder. That interest cost tends to be perpetual as they cycle a payment and new charges.

The difference with other banks is the Plan It amount. Other banks do not offer it, so don't put it in their Minimum Payment language. But you signed up for the Plan with the understanding it would be a required payment each month. So it should not be a surprise, or interpreted as "they raised my minimum payment amount" when a Plan is utilized.

Re: Amex - Raises Minimum payment due

Anonymous — Wed, 27 May 2020 17:58:01 GMT

I guess it can be helful to those who only pay minimums, that way it right there in bacl and whie what to pay each month for it to be paid off by set date. Being one who does not pay minimum payments anyway, i know what amount needs to be paid over the course of teh 0% promo rate.

This way all my minimums remian the same not affecting DTI as much. Altough i know this is only a concern when actually apping for something, i still like to keep it and UT as low as possible at any given moment.

Re: Amex - Raises Minimum payment due

Anonymous — Wed, 27 May 2020 18:12:52 GMT

Yea @NRB525 I understand the calculations and I agree with what you wrote...I put a few big ticket items on my card taking advantage of the 0%...the plan it option allows me to divide up the payments over a set amount of time instead of me scrambling towards the end of the 0% interest time to make one big payment to pay everything off. I never pay just the minimum ever but it's good to know the plan it items are accounted for each mth and I can see in my account the progress I have made on the payments.

Re: Amex - Raises Minimum payment due

FlaDude — Wed, 27 May 2020 18:44:49 GMT

@Remedios wrote:
Minimum payments are not assigned on individual basis.
The amount may differ based on the balance, but calculations are identical across the board.

Thanks for the clarification. In that case they are either not changing all of the cards at once, or the OP just noticed a change that was made back around October 2019 because my ED min changed to 2% then.

Re: Amex - Raises Minimum payment due

Tonya-E — Wed, 27 May 2020 19:16:12 GMT

@FlaDude wrote:
@Remedios wrote:
Minimum payments are not assigned on individual basis.
The amount may differ based on the balance, but calculations are identical across the board.
Thanks for the clarification. In that case they are either not changing all of the cards at once, or the OP just noticed a change that was made back around October 2019 because my ED min changed to 2% then.

I only noticed this on my current statement. It appeared as a “change” to be reviewed. Not sure how they do it. I always PIF and have never carried a balance in this particular card. Maybe they realized I hadn’t been notified. Who knows. ETA...I just looked back on my statements- nothing there. My 5/24 statement says refer to important notices section for changes to your account terms. That is where is listed the minimum due info.

Re: Amex - Raises Minimum payment due

Anonymous — Wed, 27 May 2020 19:14:48 GMT

Looks like it's on all revolvers as of August 2020. Just checked my statements for my 3 AMEX revolvers and they all had the same message.

Re: Amex - Raises Minimum payment due

Tonya-E — Wed, 27 May 2020 19:18:06 GMT

@Anonymous wrote:
Looks like it's on all revolvers as of August 2020. Just checked my statements for my 3 AMEX revolvers and they all had the same message.

That makes sense. I have 2 revolvers with them. It’s on the current statement and effective in August.

Re: Amex - Raises Minimum payment due

joltdude — Thu, 28 May 2020 12:40:49 GMT

There are a few advantages of using a Plan it on a 0% offer.. yes the payments are larger but you can make sure to pay down the plan it before the offer is up, and you can actually still use the card and have an ongoing plan it easier...(its easier to differentiate between the card balance and the plan its) Also for some reason i was able to make plan its that ended past the 0% period at 0% (YMMV)....

Still havent gotten the math to compare a plan it fee to roughly the apr equivalent..

If you have a plan it with X fee for 3 months or 6 months, what would be the equivalent APR

Re: Amex - Raises Minimum payment due

gdale6 — Thu, 28 May 2020 13:36:49 GMT

In the 1980s minimums were typically 40 looks like they are heading back that way though I prefer 10 when I wish to carry balances.

Re: Amex - Raises Minimum payment due

Rikkumz — Sun, 20 Jun 2021 14:23:49 GMT

Apparently this happened on my Amex BCE last year but I never noticed until I carried a small balance last month.

It looks like they're going to keep gradually increasing the minimum payment for a while. Directly from their site:

https://www.americanexpress.com/ca/en/customer-service/faq.minimum-payment-due.html

When or What is my minimum payment due on my American Express Credit Card?

The Minimum Payment is the lesser of (1) or (2), calculated as follows:

(1) the total of: (a) any previously billed minimum payment that remains unpaid on the Closing Date of the statement + (b) if applicable, installment amounts (including installment fees) charged on the billing statement PLUS

(for non-Quebec residents): (c) $10 + (d) Interest, Overlimit fees and Dishonoured Payment fees; or

(for Quebec residents whose accounts were opened on or after August 1, 2019): (c) 5% of the remaining balance owing that month.

(for Quebec residents whose accounts were opened prior to August 1, 2019): (c) 2% for statements dated on or after April 1, 2020, and the following percentages apply for statements dated on or after the following dates:

August 1, 2020 – 2.5%;
August 1, 2021 – 3%;
August 1, 2022 – 3.5%;
August 1, 2023 – 4%;
August 1, 2024 – 4.5%;
August 1, 2025 – 5%.

OR (2) the entire new balance of the billing statement.