The latest instalment is to occur from May 1. It will involve a 33 per cent lift in charges for bounced payments and late payments with a slightly lower increase for running up debt beyond the allowed credit limit.
Until now there was a $20 dishonour fee if
your cheque bounced or your direct debit was rejected due to insufficient funds.
There was also a $20 late payment fee if the payment was made more than 30 days after the due date. It is a computer-generated charge that can be reversed by phoning Amex and telling them the circumstances of the late payment.
The customer service person has some discretion to reverse the charge if your payment track record is good, the late payment is uncharacteristic and the reason for it is reasonable.
Those fees have now been raised to $30.
No bank, it seems, takes any notice of consumer price index increases. If the CPI were followed, the increase would have been a lot less than 50 per cent.
If the cardholder spends more than his or her credit limit, the fee jumps by $5 to $30.
Amex's view is that the fees are entirely avoidable. They are associated with cardholders defaulting on accounts and have been raised to cover administration costs, it says.
Card members can avoid paying the fees by keeping up to date with credit card payments and ensuring they keep within spending limits.
In any event, says Amex, the fees are in line with what banks are charging on their Visa and Mastercard products for "defaulting" so all it is doing is bringing its charges in line with what the market already charges.
What has happened to competition you may well ask? None of these organisations seems happy until they are all charging what they reckon the market will bear. One big bank moves with a fee increase, closely followed by another and another.
When all the banks charge the same amount, the non-bank institutions feel the urge to fall into line, too. Competition, it seems, does not mean being different, but charging the same as everyone else.
I remember a banker telling me that perfect competition is when all the players in a particular market charge the same price for the product. I told him that it sounded more like an oligopoly to me, at which point our conversation ended.
Amex says it has made it easier to avoid the new fee increases by enrolling customers with Amex Online services to gain 24-hours-a-day, seven-days-a-week access to the payment system or to arrange an automatic payment plan from a nominated bank or credit union account.
The push to move people onto automated payment systems led Amex to introduce a further
$2 charge almost two years ago if cardholders preferred to pay in person by cash or cheque at an American Express office. Does this sound familiar?
Most banks have a similar charge, sometimes
a little lower, sometimes a little higher, to discourage the rabble from approaching their
tellers in a branch.
Amex explained that this fee helped push people to online services and covered the administrative costs of handling payments in person. The helpful spokeswoman said that most cardholders preferred to pay electronically, use BPay or pay by cheque anyway.
If you have a credit card you pay an annual fee for the card, interest well into double digits on the outstanding amount, and then more still if you cannot meet the card issuer's payment timetable.
Seems like an expensive way to spend money.
