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Payment Basics: Minimum Payments

 

How does American Express calculate the minimum payment due on my consumer credit card?


Your minimum payment is the amount you must pay to avoid late fees and penalty interest rates on your account. The more you pay over your minimum amount due, the faster you’ll pay down your balance.


Beginning July 2012, to compute the Minimum Payment Due, we start with the highest of:

 

  • Interest charged on the statement plus 1% of the New Balance (excluding any overlimit amount, penalty fees and interest charged on the statement); or
  • $35.00.
     

Then, we add any penalty fees charged on the statement and 1/24th of any overlimit amount, round to the nearest whole dollar. After that, we add any amount past due. Your Minimum Payment Due, will not exceed your New Balance.

 


Jill is a Cardmember who has been paying her bill on time.

 

  • Jill’s New Balance is $3,000 and interest is $29.57
  • Jill has no penalty fees, no amount past due and is not overlimit.


Jill’s Minimum Payment Due will be the highest of:

 

(1) Interest charged plus 1% of the New Balance (excluding interest charged) = $29.57 + (.01 x $3,000 - $29.57) = $59.27
(2) $35.00


The highest of the two amounts is $59.27. So Jill’s Minimum Payment Due is $59.27.


How Your Payments Are Applied

 
In each billing period, we generally apply the first part of your payment—the minimum payment due—to the balance with the lowest APR. Any amount you pay over the minimum payment due is applied to the balance with the highest APR and then to balances with lower APRs.


Click through the steps in the example below to see what happens when Molly, an American Express® Cardmember, pays her bill. The amounts below include interest charges.

 


How Many Days Do You Have to Pay?


The payment due date is generally 25 days after the date of the statement. Billing statements are mailed at least 21 days before the due date. The due date does not change from month to month.

 

Paying late has consequences, including:
 

  • Late fees if we don’t receive your minimum payment by the time and date shown on your statement.
  • Your account will be reported as past due to credit reporting agencies if you fail to pay the minimum amount due for two billing periods in a row.
  • Paying late can also trigger the Penalty APR and restrictions on earning and redeeming rewards.
     

To help you make payments on time, American Express offers a suite of account management tools:

 

  • Pay online or by phone 24/7 – Log in to your account online or call 1-800-I-PAY-AXP
    (1-800-472-9297).
  • AutoPay – Have your payment automatically deducted from your bank account each month. (Note: You will need to have your banking information on hand when you first enroll).
  • Account alerts – Get email or text alerts when your payment due date is approaching.
  • Mobile services – View and manage your Card account from anywhere.