Amex to Start Withholding Travel Rewards for Late Payments

(DiveTravelBusinessNews - Nov 28, 2009) -- Beginning in January 2010, American Express will not award miles or points earned during a billing period for which cardholders' accounts are past due. Once cardholders are current on their payments, American Express will charge a $29 fee to restore the missing miles, on top of the late payment fee. American Express is linked to the loyalty programs of Delta, JetBlue, Hilton and Starwood.  

Withholding miles from latepaying cardholders makes sense because American Express must purchase the miles and points from their mileage partners, and if the cardholder doesn't pay his or her bill, American Express is awarding miles without being compensated for them. However, charging a reinstatement fee is high-handed: This process is automated and costs Amex nothing. 

American Express issues more travel-rewards cards than any other financial institution, so there is a strong possibility they will set the standard for other rewards-based cards.  Make sure your client is cognizant of billing dates and pay them on time so as not to pay a reinstatement fee.

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