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I tend to do most my shopping using my Amex Platinum card. Sometimes when there are sales, I tend to do a really big shop and then decide to return some of the items which appear as a minus figure on my statement (which shows the refund went through). However, when I get my final monthly statement I always owe Amex a lot of money. So my question is, where is my refund money going exactly?
For instance, my recent statement took a payment of over £700 but after calculating all the refunds I see on my statement I really only spent over £200 in the month on my Amex. This happens to me every month so I don’t understand how this is calculated? Sometimes the refund I get can be linked to something I bought the month before so how do I know if Amex is charging me correctly? Can someone explain in layman’s terms how these credit cards work?
There are so many terms I get confused by, like ‘total balance’, ‘available credit’, ‘closing balance’, ‘new credit’, ‘new debit’. I look at my statements and can’t make sense of it. Please help and thank you!
In my understanding the credit comes off your next bill. So your statement remains the same but your next bill will be your total spend minus the refunds.
if you buy something before your statement date, and you return part of that order and the refund comes after your statement date. Your amount due is before the refund. The refund goes towards your next statement.
Had the same issue, had a chat with an agent and this what the agent wrote “I am looking at your account and I see you have a remaining statement balance of £231.50. You don’t have to worry about this, the online account is designed in such a way that it considers actual bank payments as payments. It does not consider any refund as payment.”
I tend to do most my shopping using my Amex Platinum card. Sometimes when there are sales, I tend to do a really big shop and then decide to return some of the items which appear as a minus figure on my statement (which shows the refund went through). However, when I get my final monthly statement I always owe Amex a lot of money. So my question is, where is my refund money going exactly?
For instance, my recent statement took a payment of over £700 but after calculating all the refunds I see on my statement I really only spent over £200 in the month on my Amex. This happens to me every month so I don’t understand how this is calculated? Sometimes the refund I get can be linked to something I bought the month before so how do I know if Amex is charging me correctly? Can someone explain in layman’s terms how these credit cards work?
There are so many terms I get confused by, like ‘total balance’, ‘available credit’, ‘closing balance’, ‘new credit’, ‘new debit’. I look at my statements and can’t make sense of it. Please help and thank you!
The most concerning element of your post is that you hold probably one of the most “dangerous” cards in your pocket to misunderstand, given the very high interest that can be accumulated each month if the account is not managed well.
Total balance: no mystery, it’s just the total balance
Available credit: Let’s say your credit limit is £1000. You spend £100 on your credit card. Your available credit is now £900
Closing balance: Your credit limit is £1000. You spend £500 on the 14th of the month, with £500 available credit remaining. Your billing date is the 15th of the month. Your closing balance (or bill) is £500 and the amount you have to repay.
New credit: In layman’s terms, a repayment on your account, or an Amex offer statement credit
New debit: In layman’s terms, a new spend or charge on your credit card.(Happy to be corrected on anything I have said in that list above by those more expert than I!)
– Keep your own personal records on what you spend and what you’re expecting to receive by way of refund. I’m old-fashioned – once I request a refund, I make a diary note in an actual paper diary on a given day a week later than the refund, to ensure that I have received the refund to the amount I am expecting and serves as a good reminder to chase.
Younger or more hip than I may use their electronic devices to the same effect 😀
– Hopefully you are repaying your Amex bill in full each month, and not accumulating interest.
– Hopefully you are repaying your Amex bill in full each month, and not accumulating interest.
Not sure I can agree that this works for everyone. If one is receiving another income like dividends for example a card balance can be left to rise till the dividend payment date comes around and then pay it down. Agree with you though about keeping an eye what comes and goes through your statement.
Representative APR 704.6% on the platinum. Show me another income/dividend to beat it and I’ll show you a scam. Not a card to play games with.
There have been some threads on 0% cards recently but make sure you know the rules of the game first.Representative APR 704.6% on the platinum. Show me another income/dividend to beat it and I’ll show you a scam. Not a card to play games with.
There have been some threads on 0% cards recently but make sure you know the rules of the game first.No. The interest for purchases is 31%. If you borrow £1000, you will owe £1310 one year later on the card. There is also a £650 fee, for which you get many benefits, irrespective of spending or borrowing. It is included in the APR figure on an assumed debt of £1,200. But would be charged regardless of spend or any borrowing. The 704% is therefore misleading if you are deciding how much it would cost you to borrow for one month on the card (if the fee is already paid). But I agree: it is still an expensive way to borrow. But probably less than a 39% overdraft.
The interest for purchases is 31%. If you borrow £1000, you will owe £1310 one year later on the card.
Ouch!
I’m going to double check the terms on borrowing. I always pay by direct debit in full every month to avoid interest.
I guess the problem is I’m too used to relying on the app rather than tracking my spending so I’ll have to create some kind of spreadsheet.
@Skywalker you explanation was very helpful to explain the terms thank you!I guess the problem is I’m too used to relying on the app rather than tracking my spending so I’ll have to create some kind of spreadsheet.
What card(s) have you used previously that have done it any differently? I’ve never thought that AMEX displays any of this information in a way that is difficult to understand, or different from any other card provider?
@Farr, you’re welcome 🙂
I guess the problem is I’m too used to relying on the app rather than tracking my spending so I’ll have to create some kind of spreadsheet.
What card(s) have you used previously that have done it any differently? I’ve never thought that AMEX displays any of this information in a way that is difficult to understand, or different from any other card provider?
Amex takes its direct debit a lot earlier than it needs to, so if you get a refund more than a week after the statement date that transaction will probably still be paid off in the direct debit, leaving you to seek a refund from Amex if you have no transactions the next month. Of course you don’t have to use direct debit
I haven’t got an answer but I agree with you 100%
On a “good” month, I might not notice, but often you get a heavy bill from Amex, paid on direct debit and then a few weeks later an email reminds you that a payment is due and the amount seems far too high – as if it was two months in one…
This has never caused me a problem (beyond a bit of head scratching and wondering if I need to put more money into the account the direct debit is paid from – lucky to be in this situation I admit), But Amex seem to be exceptionally slow registering payments on your account. It just seems odd.
I guess the problem is I’m too used to relying on the app rather than tracking my spending so I’ll have to create some kind of spreadsheet.
What card(s) have you used previously that have done it any differently? I’ve never thought that AMEX displays any of this information in a way that is difficult to understand, or different from any other card provider?
Amex takes its direct debit a lot earlier than it needs to, so if you get a refund more than a week after the statement date that transaction will probably still be paid off in the direct debit, leaving you to seek a refund from Amex if you have no transactions the next month. Of course you don’t have to use direct debit
Yes agree the DD is early. To your point about “no transactions the next month”, the OP states they use it for “most shopping” so I’m confused how it even becomes an issue. And then surely they start the following month with a debit balance which is hard to miss!?
Ive only had Amex for a year and a half and my mistake on paying it back, but not fully (like £100) got hit with a £25 interest charge. I had not paid interest on any other credit cards for like 15 years. Felt sick. Notched it down to experience.
Ive only had Amex for a year and a half and my mistake on paying it back, but not fully (like £100) got hit with a £25 interest charge. I had not paid interest on any other credit cards for like 15 years. Felt sick. Notched it down to experience.
If it’s your first time, call Amex and ask politely if they can waive the charge. Obviously clear your current balance first.
Yes agree the DD is early. To your point about “no transactions the next month”, the OP states they use it for “most shopping” so I’m confused how it even becomes an issue. And then surely they start the following month with a debit balance which is hard to miss!?
Some people shouldn’t just be applying for credit cards if they cannot keep track of simple things like spending and refunds. Do they expect a personal assistant for this stuff?
Ive only had Amex for a year and a half and my mistake on paying it back, but not fully (like £100) got hit with a £25 interest charge. I had not paid interest on any other credit cards for like 15 years. Felt sick. Notched it down to experience.
Something similar happened to me when I set up direct debit payments. Unfortunately I didn’t notice that my next month’s bill wouldn’t be picked up by the D.D. and completely forgot to pay it. I realised this a week or so later when the charge was posted to my account.
Because it was the first time and they saw that I had recently set up a direct debit, all the charges + interest were reverted.
People are being a bit sniffy here but it’s made me realise how weird credit cards actually are, if you don’t have 20 years’ experience using them (like I do). If you ask to pay the “full amount” each month, you might reasonably think that would be the total balance at the direct debit date – but that’s not how it works at all.
The key thing which I don’t think anyone’s explicitly mentioned – though Skywalker alludes to it – is that there is a “statement date”, which for Amex is two weeks before the direct debit gets taken. So looking at one of my cards now, the statement date is the 15th of each month and the direct debit gets taken on or around the 27th. With one wrinkle that I’ll describe below, the amount that you owe on the statement date (the 15th for me) is what gets taken in the direct debit (on the 27th for me).
This used to be extremely obvious because you’d get an actual printed statement through the post, and would write a cheque (remember those?) to settle it. Nowadays, the formal statements still exist, but you have to go hunting around in the app or on the website to find them – the main “recent transactions” display just rolls on without a break. So I can see that if you’re coming to it cold, there is a strange lag in the process.
@notrob, this might explain why you sometimes feel you’re paying for two months in one go. In my case for example, suppose last month I did a big supermarket shop on the 16th – just after my statement date – and this month I did it on the 14th, just before my statement date. Even though I’ve spent the same amount each month and at very nearly the same time, because of the way they happened to fall in relation to the statement date, they’ll both be in this month’s statement and both collected through this month’s direct debit. On a bigger scale I do find I get “big” and “small” Amex bills even though I’m spending roughly the same amount each month, purely because of the accident of when the spending falls relative to the statement date.
@Farr, when it comes to refunds, again it depends on how they fall relative to the statement date. If I pay £100 on the 1st of the month and get a £100 refund on the 10th of the month, then they just cancel each other out like you’d expect. But if I pay the £100 on the 10th and get the refund on the 20th, then on my statement date (the 15th), the payment has been applied but the refund hasn’t. So on my statement date I do owe the £100, and therefore it will be taken in the direct debit.Amex is a bit different to some other card issuers here. Some issuers – based on my own personal experience – will reduce the direct debit by the amount of the refund if there is time to do so, but Amex is clear that it won’t do that (see here). Instead, the refund will be applied to the statement period it turns up in, so in my example it will reduce my direct debit NEXT month.
It all works out in the end, but seeing a direct correlation between the charges you see in your transaction history and the amount of the direct debits can be hard. If you find the PDF statements in the app and look at those, it’ll be clearer.
Finally, the promised “wrinkle”… pending transactions. You may have noticed that transactions are marked in the app as “pending” for a short while after you’ve made them, which means that they haven’t been definitively confirmed yet. Explaining why this happens would be another long post, but it would boil down to “sometimes there’s a good reason, but usually it’s just the way the card system works”.
The great majority of pending transactions are confirmed in due course, so the app tries to be helpful and does include them in your “total balance”. But any transactions that are pending on your statement date won’t be included in that month’s statement, and will instead be carried over to the next month. So, if you look at the total balance in the app on your statement date, it may not exactly match the amount that gets taken in your direct debit if there are pending transactions outstanding.
Whew! You don’t realise until you lay it out like that how complicated credit cards actually are – much more complicated than debit cards, and more complicated than any other kind of consumer loan I can think of right now. And the instant feedback in the app actually makes it harder to understand, compared to the old days of monthly paper statements. If they didn’t already exist and work this way, I’m not sure anyone would design them like that now.
Long back someone in the comments mentioned a weekly/fortnightly balance payment routine, just a bit of admin of say 15 mins per week/fortnight but saves a lot of hassle.
For credit cards, this is also very useful in keeping the “credit line”/”available credit” on the reports healthy if one were to believe in such things as credit scores — You almost always pay most of your balance before the statement cuts and do not utilize a high proportion of your available credit, which boosts your credit score.
I haven’t got an answer but I agree with you 100%
On a “good” month, I might not notice, but often you get a heavy bill from Amex, paid on direct debit and then a few weeks later an email reminds you that a payment is due and the amount seems far too high – as if it was two months in one…
This has never caused me a problem (beyond a bit of head scratching and wondering if I need to put more money into the account the direct debit is paid from – lucky to be in this situation I admit), But Amex seem to be exceptionally slow registering payments on your account. It just seems odd.
This is a major issue with Amex. If you pay by direct debit the payment date is way before when payment is due. Whereas with the Barclays Avios Card payment by direct debit is on the final payment due date Amex take payment much earlier. As a result I now pay my Amex bill via debit card or a direct transfer.
Long back someone in the comments mentioned a weekly/fortnightly balance payment routine, just a bit of admin of say 15 mins per week/fortnight but saves a lot of hassle.
For credit cards, this is also very useful in keeping the “credit line”/”available credit” on the reports healthy if one were to believe in such things as credit scores — You almost always pay most of your balance before the statement cuts and do not utilize a high proportion of your available credit, which boosts your credit score.
Credit scores are useless, but you are right that reducing the statement amount can be a good thing as thats what goes into databases that banks use.
This is a major issue with Amex. If you pay by direct debit the payment date is way before when payment is due. Whereas with the Barclays Avios Card payment by direct debit is on the final payment due date Amex take payment much earlier. As a result I now pay my Amex bill via debit card or a direct transfer.
If one thinks paying just a few days early is a ‘major issue’, they shouldnt be using credit cards. DD taken a few days early is a good thing – leaves time to sort out issues if any and avoid an automatic interest / late payment charge.
If one thinks paying just a few days early is a ‘major issue’, they shouldnt be using credit cards. DD taken a few days early is a good thing – leaves time to sort out issues if any and avoid an automatic interest / late payment charge.
I don’t disagree re the majorness of the issue, but the week’s interest you could have earned on the money isn’t nothing. I’ve just done a rough calculation, and for me it adds up to perhaps £30 a year or so – not an amount I’d get out of bed for, but people like to optimise and I wouldn’t criticise anyone who did. And of course, for others who put larger expenses through their cards, it could be a lot more.
Indeed, one of the benefits of using a credit card vs. a debit card is that you get to hang onto your money for longer, and can earn interest on it. So I think you can be a very savvy credit card user and still be bothered about the DD being taken a week “early”.
(For what it’s worth though, like you, I prefer the convenience and general safety of knowing it’s paid before the due date.)
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