AmEx Charges You For Having A Negative Balance. What?

American Express hit Mike with a finance charge because his Blue card had a balance. A negative balance. Incredulous, Mike called and said, “so you dinged me for carrying a balance and not making a payment, even though it was a negative balance?,” to which AmEx replied, “Right, even negative balances.”

Mike writes:

I received an e-mail reminder to pay my American Express Blue card bill a few days ago, and, as always, I scanned the statement for any unusual charges before I submitted my online payment. To my surprise, there was a $1.55 Periodic Finance Charge. I have paid this card off in full every month since I got it and never been late for a payment, so I called their customer service number and was able to reach a human without much trouble.

While the service person was looking up my account information, I scanned my payment history on their web site, noticed that I had not submitted a payment in March, and remembered that the reason was that I had received my annual cashback reward, which was a sum larger than my balance at the time, resulting in a negative balance on that statement. I mentioned this to him as being the potential cause for the mix-up, at which point he explained to me an American Express policy of which I was unaware: there will be a finance charge any month during which you carry a balance and do not submit a payment.

“So you dinged me for carrying a balance and not making a payment, even though it was a negative balance?”

“Right, even negative balances.”

“Was I supposed to submit a payment for zero dollars? I didn’t owe anything.”

“I realize that. It’s just our policy.”

“Doesn’t that sound a littleÖinsane to you?”

He replied by saying that he would rectify it in the computer, and the charge would show up as a credit on my next statement. I am still incredulous that this is actually a company policy, and you have to call and complain to avoid penalties for carrying a negative balance of a few dollarsÖ ironically, a negative balance that resulted from their cashback rewards deposit.

(Photo: DCvision2006)


Edit Your Comment

  1. your new nemesis says:

    I would like to hope that this could be the pinnacle of stupidity that credit card companies could come up with, but we all know its not. So, as I understand this, you were supposed to pay nothing? They created a problem you were not supposed to pay for but they charged you? Wow, stay classy Amex.

  2. ChicagoKev says:

    In a sane world, they would have applied a negative finance charge to the negative balance, or as us humans call it, “interest paid”.

  3. JulesNoctambule says:

    Is there some kind of contest among large companies to see who can institute the most ridiculous fees, or are they just trying to see how many ways they can nickle and dime people before they start to complain?

    • mac-phisto says:

      @JulesNoctambule: personally, i think they’re all in league with the pharmaceutical companies & trying to get us all hooked on thorazine, clozaril & zyprexa. but then, maybe i’m being a bit paranoid. *swallows fistful of anti-psychotics* 8-}

  4. edbro says:

    That is insane. Transfer a penny into the account as payment next time I guess.

    I’m concerned because they normally show your cashback balance at the top of the statement. This month mine doesn’t show the balance, just an advertisement stating “Earn cashback virtually everywhere”.

  5. Trai_Dep says:

    I killed my Amex Blue a couple months ago, precisely for this kind of stuff (well, that and pruning). Haven’t looked back since.
    The days when having an American Express meant something are over.

    • Skankingmike says:

      @Trai_Dep: but.. but.. I never got one….

      I was still under the impression you couldn’t carry a balance each month and there was a fee to own the card but with it came magical powers that were bestowed upon me!

      • Trai_Dep says:

        @Skankingmike: Well, to be fair, there was a time when Mastercard/Visa was abysmal to take overseas, but I think they’ve caught up.
        And AMEX has great marketing. I’m in awe.
        But in the cold reality of a spreadsheet, there’s not as much benefit to the cost.

        • Skankingmike says:

          @Trai_Dep: Personally I’ve had great luck with Citi Bank and their platunium card and Wahovia’s card both have never given me trouble dispite what I read here.

    • Jim Topoleski says:

      @Trai_Dep: The days where over in the late 80’s early 90’s.

      All Amex is now is a Discover Card that gives you anal a lot more often. At least Discover Card has the decency to pretend to give you money back and give you nice calls when they are going to ding you on top of not being able to be used at half the stores out there.

      Amex only gives you the former if you have the right card, and never gives you the later anymore.

  6. morganlh85 says:

    We can send man into space, but a computer can’t tell the difference between a negative and a positive balance?

  7. wagnerism says:

    Is the company policy as stated, or is it their policy to not correct programming mistakes? Or… Is it their policy to not spend money on a mistake that earns them money?

    blah blah… horrible.. blah blah.. asinine policy blah blah cancel card etc and go to abc or xyz card issuer.

    A few months later… blah blah stoooopid abc company, I’m going to xyz.

    Short version: It is not a matter of “if” but a matter of “when” you’ll be stung by some asinine policy. I only hope that credit unions prove me wrong at least sometimes.

    BTW, this also applies to your internet service provider, sat/cable television provider and phone provider – choices don’t fix problems when prices are ground down to minimal margins.

    /doesn’t work for any of the above mentioned industries.

  8. Cant_stop_the_rock says:

    I think this CSR misunderstood something. The OP was probably right that it is related to the fact that his bill was covered by his cash back and not by a payment. I don’t think it has anything to do with the negative balance.

    • zentex says:

      @Cant_stop_the_rock: this makes sense. a payment was due but not paid because the cash back. The system didn’t get the payment-made bit set so it charged a fee as it’s supposed to…cause cash back prolly doesn’t register as a payment, but a credit.

      • Skaperen says:

        @zentex: That’s wrong logic. A flag for payment-made does not mean ENOUGH payment was made, for example. Late fees should be based on whether the minimum amount has been credited. Another possible scenario that this fixes is when there is only one charge for the month (making a balance due) and it’s in error and gets credited back (before the due date). Again, that should zero the amount due, and there should be no late fee because there is no carry-over amount due. The correct logic is to check for a carry over amount that is positive.

      • Charmander says:

        @zentex: Yes, that happened to me just recently. I accidentally made a large payment on one of my Amex accounts – only not the one I wanted to pay on. A few days later I had that sum transferred to the account I wanted to pay in the first place. I thought that would constitute “payment” on my monthly balance.

        But as zentex just pointed out, it ended up as a credit on my account, and I was charged not only a finance charge, but a late fee as well, because I had never made a “payment” that month.

        I got it all straightened out, but I understand now why it happened.

    • Michael Belisle says:

      @Cant_stop_the_rock: Yeah, I’m pretty sure the CSR is just an idiot.

  9. smileboot says:

    Simply poor backend programming. Next time they should hire someone who’s not a a moron to code it.

    • Cant_stop_the_rock says:

      Woah there Mr. Know-it-all. How do you know it’s the developer’s fault? Have you seen the requirements he was given? In a proper software development process the developer and QA will both work against a documented set of requirements. If the requirements did not accurately capture the business rules, that is not the developer’s fault. If the business rules did not account for this situation, that is not the developer’s fault.

      • Skaperen says:

        @Cant_stop_the_rock: Both were probably part of the overall system development process that was carried out by the lowest bidder from a country with a low standard of living.

        • mac-phisto says:

          @Skaperen: i’m thinking they were mayan.

          (their culture has no known method for the calculation of negative numbers. also, this joke would be funnier if i didn’t have to explain it.)

      • elganador says:


        Speak truth to power, brother/sister!

      • Anonymously says:

        @Cant_stop_the_rock: This is a credit card company we’re talking about. The software developers probably spend 14 hours a day fighting fires instead of doing something proactive. At most company “specs” are what old, visually impared people wear and have nothing to do with software.

  10. dow24 says:

    I have to wonder how, precisely, this is applied. I had a -$9 balance on my Blue Card for quite a few months. And then I charged something to my card and they credited that $9 towards the balance.

  11. pollyannacowgirl says:

    My grandfather used to overpay his bills by a few cents just to mess with the electric company. This was (obviously) back in the day, before computers. I’m not sure how much it really did mess with their books, but it made him feel vindicated, so…

    • Jacob Morgan says:

      May I just say, I love your grandfather.

    • Skaperen says:

      @pollyannacowgirl: He should have done the same thing to the water company and the telephone company, too. Why not also do it to the cable or satellite TV company, or internet provider. Even better, confuse your local PBS TV station by pledging $50 and sending them a check for $55.

    • mac-phisto says:

      @pollyannacowgirl: lol! i used to process checks manually for an accounts receivable department – let me tell you, what your grandfather was doing worked. the software we used would default to the amount owed & if you weren’t particularly attentive, it was easy to post the wrong amount & then have to rectify it later.

      completely awesome.

  12. scoobydoo says:

    Oh how the mighty have fallen.

  13. Grrrrrrr, now with two buns made of bacon. says:

    If you had a negative balance, they owed you money, so call them up and ask them why they didn’t send you a check. I think I’d ask for some ridiculous late fees from AmEx too.

    Are all credit card companies run by greedy morons?

  14. Anonymous says:

    I don’t understand how they can charge interest on a negative balance. If finance charges are calcuated as Interest Rate * Balance then..they should have gotten a negative finance charge. Because even a third grader knows Positive * negative = negative. Then again, we’re talking about credit card companies…

  15. theczardictates says:

    Not to defend the CSR (although my experiences with AmEx CSRs are usually very good), whose explanation was at best confusing, but it’s just possible that the fee was correct.

    If the cash back was shown on that statement but not applied to the account until after the due date, there would be a small finance charge due. It also wouldn’t be unusual for AmEx to waive a small fee for a good customer (they’ve done that for me in the past when I made payment screw-ups that were entirely my fault, and once without even being asked.)

    Unfortunately I don’t know how this kind of “cash back” card works (why is it called “cash back” if you don’t actually get cash, you just get a credit on your account?) as I have the Costco co-branded card that gives you an actual check that you can cash or spend at Costco rather than an account credit.

    • TEW says:

      @theczardictates: The OP should look at his terms of agreement. My USAA card says that the cash credit may not be credited in time to pay off the balance so you should send in a check just in case. USAA admits that this might happen and they will charge you a fee so you need to cover your a**. My gut feeling is that AmEx did not cover the balance in time to cover the balance and that is why the fee was issued.

  16. HiPwr says:

    I don’t have one of these AMEX blue cards, but I have a couple of Chase cards that I have overpaid and they never charged me a finance fee on them. They just keep sending me a bill month after month showing my negative balance and telling me that my payment is zero. They even send an envelope.

  17. MyTQuinn says:

    Probably an honest mistake caused by a programmer looking for a non-zero balance, as opposed to a positive balance. I can understand that mistakes happen, but a mistake like this should have been discovered and corrected a long time ago. The shameful part is having a CSR who not only sees nothing wrong, but believes that this is the result of some policy. In the absence of an economic crisis, somebody this stupid should be digging a ditch somewhere (no offense to ditch diggers), but with the economy the way it is, this CSR should be on the unemployment line.

    • Skaperen says:

      @MyTQuinn: They are trained to say anything and everything is policy. If the computer figures it a certain way, well then that must be company policy. What should have been asked … of management … is why is it policy to do something clearly and obviously wrong. Ask the CSR “why does the company have a stupid policy”. Of course the CSR would probably say “That’s company policy” which can be concluded to mean “Company policy is to make stupid policies”.

      All this because they farmed out the system development to the lowest bidder.

      • jf8201 says:

        @Skaperen: In reality, there may be a valid reason for not catching this sooner. This is not a typical scenario (a negative balance that is not the result of a payment). Unless the test data the programmers were given included this scenario, likely the programmers wouldn’t have encountered any problems in testing.

        Further, give the poor CSR a break. They are paid to back “company policy” regardless of what it is. I doubt they have any programming knowledge either to deduce that this is a programming error, so they probably assumed that “non-zero balance includes negative ones” whether they agree with it or not. This makes me wonder if the CSR would even realize this is something that needs to be addressed with their programming staff and should be fixed.

    • johnva says:

      @MyTQuinn: Why correct mistakes if they make you money? That’s the corporate American way.

  18. Blackneto says:

    Anyone still think there is “Good Debt” ?
    this is ridiculous.

    • Charles Duffy says:

      @Blackneto: Given as “good debt” consists of asset-backed debt like mortgages, which have nothing at all to do with this article… what’s the point you’re trying to make, again?

  19. SlappyWhite says:

    I’d like to see a copy of the bill with due dates and everything. The OP said he didnt submit a payment in March. So depending on what day the cash back credit hit, there was probably a few days in the billing cycle in which the OP had a balance that was generating finance charges, based on him not making the March payment. Hence, the $1.55.

    I think if my assumption is correct, instead of bashing AmEx for charging him a $1.55, which we should applaud them for not hitting the OP with a $39 late fee.

    • Anonymous says:

      This is probably correct. Since most credit card companies charge interest on the daily balance, the OP was responsible for the amount of interest due for the days his or her balance was positive, before the cash back credit was applied. Before assuming that the cash back bonus will apply to the daily balance interest, read the fine print in your contract. I feel the OP was mistaken to not check his or her statement before assuming that the balance was zero or negative. I don’t think the AmEx rep. was correct in agreeing with the OPs incorrect assumption that the interest may be applied to negative numbers.

  20. sanjsrik says:

    Try and ask Amex how your membership points are calculated. You’ll get numerous answers EVEN from the membership points “specialists” aka morons. I was first told that the points accrue when you make the charges. Then I was told that they ONLY accrue when you pay the bill. THEN I was told that they only accrue when you pay off the entire balance.

    To date, even they contradict themselves.

    Oh, and wait until you start getting hit with the inactivity charge because you haven’t used your card for a year or so. That’s $35 or so.

  21. twophrasebark says:

    I doubt the CSR’s explanation was correct.

    • Skaperen says:

      @twophrasebark: They are trained to just come up with explanations for what is otherwise management stupidity. It’s called CMA … Cover Management’s A…

  22. savdavid says:

    Look, if you don’t carefully check each statement and loudly complain about the fees, credit card companies will try every nasty, dirty trick in the book to steal from you.

  23. RandomHookup says:

    I’ve had a cashier insist I pay a negative balance at the register (after using coupons). I paid because I knew there was a mistake somewhere in the calculation, but I still had a laugh pointing out the “negative 1.29” balance on the screen. I hope he got in trouble for his drawer being out of balance (I know I’ve been in New England too long — I originally wrote “draw”, just the way they say it up here).

  24. witeowl says:

    He clearly should have paid off the negative balance with a check written for the exact (negative) amount. I’m not sure where the problem is.

    /sarcasm off
    /daydreaming on

    I wonder how the bank(s) would respond to that… Hmmm….

  25. MsAnthropy says:

    AmEx’s computers have trouble adding up at the best of times. When you make a payment on an AmEx credit card, your “available credit” will then show as the total of your overall credit limit plus the amount you just paid (as opposed to your previous remaining available credit plus the amount you just paid)… takes it a few days to straighten out. Doesn’t surprise me that it’ll also try to charge interest on a negative balance. It’s probably not really “policy”, just crappy software.

  26. lehrdude says:

    Maybe he got the negative discount from Best Buy???

  27. Thomas Traynor says:

    For the person who commented on programmer error that is not very likely. I do maintain a billing system and the first thing we look for is a non-zero balance, the second thing is to see if the balance is a debit or credit. If it is a credit (company owes the client money) then we don’t calculate charges (this is not for a credit card company though). I don’t see AMEX having anyone on their development team that stupid and if they do peer review of the code it would get caught very quickly.

    • MsAnthropy says:

      @Thomas Traynor:

      Well, like I said (I don’t know if that was addressed to me or not, but I’ll answer anyway!), the website (and automated phoneline) really is incapable of telling you your correct amount of available credit after you’ve made a payment. If you have a $5000 limit, say, and a $1000 balance, and then pay that $1000 balance, instead of showing your available credit as being $5000, it will show $6000. It takes a few days to correct itself. I have no idea what that’s all about, but something’s clearly wrong somewhere.

      Not just me – this is a widely-reported glitch.

  28. halo969 says:

    I’m done with American Express. I’ve had an AMEX for over a decade and made a late payment one time and they refused to waive the $19 charge. I was told the system wouldn’t allow it “under the circumstances” but the manager couldn’t explain to me what those circumstances were. Clearly I’m not a valuable customer to them so I took my card and locked it up. Not going to cancel it since it helps my credit score, but I’m certainly never using it again either. Discovercard doesn’t pull this bullshit on people.

  29. ninjatoddler says:

    That actually worse than Wells Fargo’s policy of eating up your negative balance. So if you overpay WF’s VISA card balance, you lose that amt or so as I’ve heard.

  30. Bs Baldwin says:

    I think the rep didn’t understand the question, all they heard was “carrying a balance”. I have had credits on cards before for months on end, and never got charged.

  31. Winteridge2 says:

    If a negative balance annoys them, why do THEY not send YOU a payment? Maybe even add on a finance credit? Cancel them.

  32. FixinTo says:

    I have a retail business, and 11 years ago when we started, we thought it would be good to accept Amex. Over the years, Amex raised its merchant fees at a much faster and higher rate than Visa/M-Card/Discover — plus they were slower to deposit our transactions. We finally wised up and decided to drop Amex. Soon afterwards, we notice that Amex debited our business checking account for $4.50. When we called about this, they said it was a fee for non-activity. I had to remind them that we no longer accepted Amex, so naturally, there would be no activity. I wonder how long they would have charged non-activity fees if we didn’t pay close attention to our business checking account….

  33. David in Brasil says:

    Oh, I got a better one than that. My company once accepted Amex. The account was opened by a former business partner who we discovered was a crook, so we kicked him out of the business. Later, we found that he had set up a competing business and had changed the address that AMEX had on file for us to his new address. Concerned that he was going to do something shady with our account (I’m not even smart enough to think of all the crooked things he could have done), I called Amex and explained and asked for the address to be moved back to our correct one, or for the account to be closed. No such luck, says the Amex rep; the account can only be closed/moved by the registered agent; the person who originally opened it. I explained the situation in detail, and I’m pretty sure that they understood, but still no dice. I called their identity theft and fraud department, who were sympathetic, but still would not move the address or change the name of the registered person on the account. Amex gives lip service only to identity theft, but obviously doesn’t put its money where its mouth is.

  34. GThompson says:

    As an AMEX employee (Fort Lauderdale, Fl service center), I can honestly say this is the worst company in the United States to work for. The company has been moving most of our U.S. jobs to India. You wonder why customer service is so bad? They pay their India customer service representatives around $4.00 per hour (no additional benefits at all).

    If you dispute a charge on your card, chances are it will be handled by Indian representatives that has no clue how American personal finances work. If anyone complains about any aspect of their job at AMEX, their told to shut-up (I’ve heard this many times within the past 6-8 months) and are advised that we should consider ourselves lucky that they haven’t been replaced with cheap Indian workers yet.

    Even as late as 2008, AMEX was in the top 100 companies in the USA to work for (no longer on the list); however, since the economic crisis, they could care less about their employees. Since the economic crisis, every change in our jobs has been negative. The AMEX vice president and Fort Lauderdale center head (DORIA) stated “like it or not, that’s the way it is”. We hear this constantly now as her quote from our supervisors. It has become a dreadful dreadful dreadful place to work. Forget the comercial where the girl sits at a nice clean desk in her large sunny cubicle, all happy and greets the male customer with such a wonderful sweet flirty phone conversation. The reality is, AMEX customers are being greated on the phone by employees that are now being treated like the sweat shop factories in China.

    AMEX has also fired so many people (Americans), there simply isn’t the staff in the United States to answer the phones without the Indian accent that Americans have grown to hate. Each American rep now has to reduce phone time per customer to handle the huge call volume. You will now experience a longer wait time trying to reach a representative.

    American Express does not care about their employees, could give a shit about the customer, only the dollar is god to AMEX. Most American companies don’t exist very long when adapting this comany ethic. The company logo is “winning the hearts, minds, and wallets of our customers”.

    A little behind the scene insight into why AMEX customers are receiving extremely low level of customer service.

  35. chenry says:

    I’ve carried a negative balance on my Amex before and never been dinged for it.

  36. provolone says:

    I’m sure the CSRs explanation was incorrect. That is, assuming that the Mike’s account of this phone call is even accurate, which I doubt.

  37. Michael the Great says:

    I think you should have paid the negative $2’s online and watched the entire banking system implode!

  38. LorneReams says:

    If it’s a calculation error with the system, I’m unsure how it didn’t calculate a negative interest balance as well.

  39. Anonymous says:

    The card you have is a credit card that has a due date if your payment is not posted to your account by that due date you will receive a finance charge and i am surprised you did not get hit with a late fee. The cash rebate is usually put on the statement at the end of the month just before the account closes so when your payment was not received by the due date the system will automatically put the finance charge on the account because yyour cash back was not in the system or i should say it was not posted to the system had it been posted before the due date you would not have received the finance charge. You may have looked at your account after the due date an seen the cash back and assumed you did not have to make the payment because at that time the cash back was on the account but bottom line is you have a due date and that payment has to be paid by the due date i work for a financial institute and i have a cash back card and per the cardmember agreement they were correct in charging you a finance charge. People fail to realize that now a days everything is done by computers so if the system doesn’t show the credits before the due date you have to pay the account and you can either apply the credit to your next statement or have them send you back the cash. The one thing that puzzles me the most is when people say this was the first time this has happened and i can’t believe this company did this to me I know everyone is listening to the knews cnn and every other station is telling people now is not the time to be late with anything credit cards charge cards mortgages or anything else you make a payment on because it can really hurt you and they tell you what they can do they can raise the intrest rate they can lower your lines of credit they can close your accounts it is a tough economy and alot of credit card companies are taking huge losses so they have to do the things they are doing to protect themselves and to keep there business going. Anyone and everyone that has a business can tell you it is tough today and if people are late paying there bills then why should they not pay the price it hurts the other people who are paying. And big corporations get hit alot harder and they have bills they have to pay to so for every account that is late that means they are going to be late paying there bills. so if companies didn’t do this how long would they be in business and guess what you wouldn’t have those funds to borrow, so that you wouldn’t have to use your cash. last but not least bottom line is they didn’t hide these fees it is clearly in the contracts. I truly understand your point but also working for a finacial institute and because i have a cash rebate card and have been treated very fairly by the company and have never had an incident that wasn’t my fault and they fixed it anyway i have to side with them and tell you straight up your credit was not on there by the due date so you were late and i think that it was very nice of them to take that fee off of there and that they didn’t charge you a late fee and that is probably because the system did recognize you had a credit at the close of you statement that is why i am assuming you did not get one. so overall i think you should really reconsider your remarks about the company. and understand there point of view i hope this helps