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"Missed repayment could mean hiked rates from American Express"

By admin | October 8th, 2009 | Credit Cards

In the current financial climate many credit card customers have missed repayments on their credit card debt, and for customers of one credit card giant this could turn out to be a very costly mistake.

According to reports credit card and financial giant American Express is increasing interest rates for customers that miss a repayment, and those that do miss their repayment could see their interest rate increase by up to 4 percent.

This means that someone paying an APR of 19.9 percent on their American Express card who then misses a repayment could see their rate increased to 23.9 percent. The only way that the customer will be able to drop back down to the original rate again will be to agree to cancellation of the account, which then reassures the lender that the consume will not be spending any more on the card.

Officials from American Express have said that they use a range of measures to ensure that consumers do not miss repayments in the first place, such as sending reminders, and that the increased interest rate was a last resort measure that was being used. They also said that they advise customers to set up direct debits for repayments to further minimise the chances of missing a repayment and being penalised.

However, this did not pacify one angry customer who said that he had an otherwise perfect repayment record that had not been taken into account by the card provider. He said: ‘American Express said it was acting responsibly, but how can increasing interest rates for people struggling with their payments be seen as responsible?’ In the meantime the credit card giant has not disclosed how many of its customers have been moved onto higher rates of interest so far.

Tags: credit card charges, american express

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