What Happens If You Don’t Pay Your Amex Charge Card in Full?

The first thing that will happen if you don’t pay off the entire debt on your Amex charge card is that you will be charged interest. If you carry a balance from month to month, these fees can mount up quickly and can be fairly significant, frequently topping 20% APR.

If you miss a payment deadline, Amex may also impose late fees in addition to interest costs. Depending on the amount outstanding, these costs might range from $27 to $38. Your account can be sent to collections if you keep skipping payments, which might harm your credit score.

As for credit limits, unlike other credit card issuers, Amex does not have a conventional credit limit. Instead, they provide what is known as a “spending limit,” which is determined by your creditworthiness, spending patterns, and payment history. Although you are technically allowed to charge more than your budget allows, doing so may cause your account to be marked for review or possibly canceled.

Your particular financial position will determine whether it’s preferable to close your credit cards or keep them open with no debt. Closing a card with a zero balance could make sense if you have a lot of accessible credit spread across several cards and are concerned about overspending. To maintain the account’s activity and raise your credit score, it’s normally preferable to keep the card open and occasionally use it.

Finally, it’s important to remember that closing an account will lower your credit score because it can affect your credit utilization ratio. A lower ratio is generally better for your credit score because it indicates how much of your available credit you are actually using. You decrease your total credit limit when you shut an account, which might raise your credit use ratio and lower your score.

In conclusion, using your Amex charge card without paying it off in full can result in interest rates, late fees, and even possible harm to your credit. To keep your account in good standing and preserve a healthy credit score, it’s critical to stay on top of your payments and avoid carrying a balance whenever feasible.