What happens to points after a late payment? Amex is toughest

by on Tue September 4, 2012 • No Comment
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While we only recommend putting spending on mile and point reward credit cards that you plan to pay back in full each month, late payments happen. Sometimes we’re forgetful, others an unexpected event happens.

So what happens to the miles and points earned from a late month’s spending?

The answer…it depends on the credit card company. American Express is the stingiest, with fees to reinstate points on top of the basic late payment fee, Chase and Citi a touch more lenient.

Here’s a rundown…

American Express: Any late payment means you forfeit the points earned in that month. So if you spend $2,500 on the Amex card you are late on that month, you will not earn the 2,500 points, even when you do make the payment. The only way you can earn those points is to pay a ‘reinstatement fee’ of $29. Given points are usually worth 1-2 cents (more if you’re resourceful) it’s really not worth the reinstatement unless you earned about 3,000 or more points in the month. This point forfeiting policy applies to all American Express cards that earn miles and points – not just its ‘Membership Rewards’ program for the Green, Gold, and Platinum cards. The Delta, Starwood, and Hilton credit cards all have this penalty.

Chase: This is more straightforward. For its Ultimate Rewards program (which is where the Sapphire Preferred® Card and Freedom card earn) if you’re late in paying, your new points won’t post and you can’t redeem your existing points. But once you become current the points do post and you can redeem with the next billing cycle. They also reserve the right to forfeit your points, but that appears reserved for extreme situations or abuse. We have heard for 60 day late payments (which are a black mark on your credit report) they will forfeit the points yet to be posted. For non-Ultimate Rewards cards like United, Hyatt, and British Airways there is no forfeiture of your existing points – that’s in the hands of the airline or hotel, but they won’t post new points until your account is current, and likely forfeit the new points altogether after 60 days of delinquency.

  • “Ability to Earn and/or Redeem Rewards: If your Account is in default as described in your Cardmember Agreement (“Agreement”), and/or your Account is closed for any reason, and/or there is any fraud or abuse related to the accrual of points, we reserve the right to prohibit you from earning or redeeming points through your Account until the next billing cycle after your Account is no longer in default, and to cause you to forfeit any points in your Account. If your points are forfeited for any reason, we will not reinstate these points to your Account. If your Account is closed for any reason, your membership in the Program will be terminated.”

Citi: For its ‘Thank You’ rewards cards, all of your Thank You points are locked from redemption until you are current on the account that’s late. They mention paying a reinstatement fee, but the fine print says right now that fee is $0. For its American Airlines, Hilton, and other non-Thank You point cards there is no locking of your existing account, since they don’t control it. But your newly earned points and miles won’t post until you become current.

  • “Are my ThankYou Points available for redemption if I make a late payment on my Sponsor Account? If you are late in making a payment on your participating Sponsor Account, any ThankYou Points you earned through that Sponsor may not be available for redemption until you make all payments due on your Sponsor Account and pay the reinstatement fee. Currently the reinstatement fee is $0. These points will remain eligible for reinstatement until they expire in accordance with the terms and conditions of the applicable participating Sponsor Account. Any previously earned points will not be affected.”
Discover: If you fail to make a payment for two consecutive periods, all miles or rewards in your account will be forfeited.
  • “if your account is closed for any reason or inactive for 18 consecutive months or if you fail to make any Minimum Payment Due for two consecutive billing periods, any Miles in your Miles account will be forfeited.”

So lesson being, if your’e forgetful, American Express will penalize you the most quickly. As for Chase and Discover…well if you’re 60 days late you have bigger thing to deal with than losing some points.

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