MSE news: Amex cardholders warned over penalty fees danger because of DD changes

Former_MSE_Guy

This is the discussion thread for the following MSE news story:

"American Express cardholders risk being hit by late payment fees from the autumn because the plastic provider is bringing forward the direct debit (DD) due date.

The card giant currently takes DD payments 18 days after your statement date but, from October, will take the cash after 14 days ..."

Read the full story:
Amex cardholders warned over penalty fees danger

Paul_Herring

Say your October statement is issued on the 1st of the month, under the new system, your DD should be taken on 21 October, rather than 27 October

Are you sure about that?

I got the impression that it's 14 days after the statement (which is still 7 days before the due date,) and don't recall any mention of 'working days' in the letter I received off them.

In fact the general impression that I got from my letter is that they're bringing the due date forward 4 days, and the DD will still remain 7 days ahead of that.

Edit: The exact wording of the letter:

Change to Direct Debit Period
As of your October statement, your Direct Debit withdrawal date will be four days earlier, with funds being taken from your bank account on, or around 14 days after your statement date. To minimise the impact, we will move your October statement date and every statement date thereafter so hat your Direct Debit will be taken on or around 12th[sic] of the month. Details of this change to your Direct Debit period and alternative payment methods are detailed in the Payments section.

Nothing about 'working days.'

The example in the article is wrong:

Say your October statement is issued on the 1st of the month, under the new system, your DD should be taken on 21 October, rather than 27 October.

Under the new system the DD will be taken on the 14th October (as opposed to the 18th)
Could we have the article corrected please?


As an aside, I contacted Amex about this:

Me wrote:

Could you explain to me why, when every other credit card provider is able to enact a direct debit on the due date for a credit card payment, American Express deem the direct debit date to be 7 days before the due date?

This question has been prompted by the fact that you have reduced the period between the bill being produced and the direct debit due date to 10 working days.

Their reply:

Thank you for your email regarding the date that the Direct Debit is taken each month.

I can confirm that the reason that the Direct Debit is taken 7 days before the due date is so that the payment has time to clear onto the account. If the payment was to return for any reason there is still time to make a manual payment to the account, avoiding late payment fees.

As you are aware we are changing this timeframe 4 days earlier to 14 days after the statement is produced. At American Express we continually look for ways to maintain our best-in-class Cardmember rewards and benefits which we know is the primary reason consumers carry our Cards. This amendment to Direct Debit is just one of the ways we can continue to offer these benefits.

oakhouse13

If you already have the card will you receive cashback after your first 13 months is up if you have not hit the new annual £25.00 threshold, or is the threshold still £10.00 for holders of the current card?

Paul_Herring

Current threshold is £12 - again, from the letter:

Change to the minimum threshold amount for the payment of cashback rebates

We will be increasing the minimum threshold amount for the payment of cashback rebates from £12 to £25. This change will occur 12 months after your next card anniversary date.

ylesia

I agree that the article needs to be corrected, should highlight that existing cardholders will not be affected on their next cashback due date but the following one.

And the impression I got from my letter is that my payment day will not change but instead my statement date will change. My direct debit currently collects around the 3rd and the letter states it will collect around the 3rd after the changes.

Wish I'd seen the letter before the article and avoided much confusion!!

Former_MSE_Dan

Hey folks

Paul - you are right. After reading your posts, Amex re-checked how this worked, realised they had given us the wrong info and called us back!

Also, they decided, after we wrote the article, that they would refund any late fees in October, which we have now added into the story:

Amex has confirmed it will automatically refund any £12 late fees incurred in October (though always check this gets done).
However, ensure you sort out your payments by November, with enough money to pay your direct debit, otherwise you could get hit then (see the Reclaim Credit Card Charges guide).