Tulsa World: Another credit card fee preparing to fly

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Another credit card fee preparing to fly
Paying late now has a new penalty on some cards.

By HARRY R. WEBER Associated Press
Published: 11/22/2009 2:25 AM
Last Modified: 11/22/2009 1:14 PM

ATLANTA — Another fee is coming in the new year for airline and hotel customers — this time from your credit card company.

The message: Pay your bill on time or forfeit the miles or points you thought you earned for making purchases during that month.

To get the rewards back, it's going to cost you.

American Express Co. is sending notices to customers who hold its cobranded cards with Delta Air Lines, JetBlue, Hilton Hotels and Starwood Hotels, that beginning in January rewards won't be transferred to loyalty accounts with those partners if you are late paying your bill.

You'll be hit with a $29 reinstatement fee if you want the rewards back. That fee is on top of the late-payment fee. A penalty interest rate, currently 27 percent, would be assessed on future balances.

American Express is changing the policy for its cobranded cards to align those cards with its other Amex cards that have carried the same policy for months or years.

The policy doesn't just affect the habitual late payer, it affects everyone, said John Ulzheimer, president of educational services for Credit.com. "I think over the course of time, people miss a payment at least once because of unforeseen circumstances like something getting lost in the mail or a long vacation taking your focus off making your payments," he said.

Other card issuers, like Citigroup Inc. and JP Morgan Chase & Co., also have cobranded credit cards with airlines and hotels. Citi is paired with American Airlines. Chase is paired with United Airlines and Marriott International Inc.

Citi spokesman Mark Rodgers said points earned on the company's Citi cards that offer rewards through the company's own rewards program might not be available for redemption if a card holder pays, and in some cases a fee for reinstatement may apply. Rodgers said Citi is not considering reinstatement fees for its cobranded cards with American Airlines and Hilton.

JP Morgan Chase spokeswoman Tanya Madison said that if an account is past due for the cobranded United card, a customer will not earn miles until the account is paid. "While we do not go back and confiscate miles, we will stop awarding miles on spending going forward until the account's paid in full," Madison said.

Consumer advocates aren't surprised by American Express' move considering tough new rules for credit card companies scheduled to go into effect in February. Under the new law, lenders won't be able to increase rates on existing balances unless a person is more than 60 days behind on a payment.

Banks deny that they are increasing rates ahead of the February deadline and blame fee increases on the economic downturn. American Express isn't saying how much revenue it expects to generate from the new reward reinstatement fee for cobranded cards. By HARRY R. WEBER Associated Press

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	Report Comment wilson, (11/22/2009 5:31:20 AM) When they force their customers in to bankruptcy with their fees and interest rates, how will they stay in business? They are taking the same backwards approach as government takes...we are losing money so we'll raise our prices. Ridiculous! Lower prices = more customers. 27% interest should be illegal.
	Report Comment tulsan09, Tulsa (11/22/2009 5:37:08 AM) Pay your bills on time and you will never have to worry about late fees, high interest rates, etc. If you can't afford it, don't buy it.
	Report Comment PhoenixIX, Jenks (11/22/2009 8:10:22 AM) NEWZMAX, They increased your interest rates because they consider you a risk. They must be reading your comments ! LOL
	Report Comment JR, (11/22/2009 9:21:41 AM) Git Rid Of Umm......
	Report Comment yep, Tulsa County (11/22/2009 4:11:42 PM) At some point, many people in this country adopted the mindset that they're entitled to own things they are not able to pay for yet, and this problem began. Too bad there's no longer a debtors prison. People who pay interest on credit cards are throwing away money every month, by their own choice. Charging something they can't pay off fully each month is their own choice.
	Report Comment Ron Ballew, Lawton (11/22/2009 11:22:18 PM) 27% interest is usury and white collar crime. Mobsters used to go to jail for charging 27% and so should white collar criminals.

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