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Payment Basics: Interest Charges


How American Express Determines Your Interest Rate

Different card products carry different terms, conditions and benefits—including different interest rates, also known as the Annual Percentage Rate or APR. Based on your individual credit profile you may qualify for a lower or higher APR than your friends, family or neighbors. By paying your bills on time each month, you will continue to build a strong credit profile and will increase your ability to qualify for cards with lower APRs.

Where to Find Your APR

You can find your APR on your billing statement, below your Card Activity Details.


Can American Express Change My Interest Rate?

Credit card companies, including American Express, must give you at least 45 days notice if they change certain key terms of your consumer credit or charge card account, including changing your interest rate or “APR.” Additionally, if your Card's APR increases, we must tell you why and the higer APR will apply only to new transactions. In this instance, we will also re-evaluate that rate increase every six months. If a reduction of your rate is indicated, we will reduce it within 45 days after we complete our evaluation.

Consumers have the right to opt out of, or refuse to accept certain terms changes, other than APR changes, before they change. In most cases, however, this will lead to cancellation of your account.


How Are Interest Charges Calculated?


American Express generally charges interest on purchases, cash advances and balance transfers beginning on the transaction date. If you pay your bill in full every month, you can avoid paying interest on purchases. However, you cannot avoid paying interest on cash advances and balance transfers.

We use the “Average Daily Balance” method (including new transactions) to calculate the interest on your account each month.

To determine your monthly interest, we multiply the average of the daily balances times the Daily Periodic Rate times the number of days in the billing cycle. The Daily Periodic Rate is determined by dividing your account’s APR by 365.

This method of calculating interest results in daily compounding of interest.
Please refer to your Cardmember Agreement for a more detailed explanation of how we calculate interest on your account, including how we calculate daily balances.


TIP: Pay More Than The Minimum Payment
The larger the payment you make and the earlier in your billing period you make it, the lower your overall interest charges will be.

TIP: Always Pay On Time
Late payment will negatively affect your “FICO” or credit score. Click here for more information.

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