Consumer complaint received 2017-12-27
Company: AMERICAN EXPRESS COMPANY
State: VA
Product: Credit card or prepaid card
Sub-product: General-purpose credit card or charge card
Issue: Fees or interest
Sub-issue: Charged too much interest

Complaint:
I have a Delta Skymiles Gold American Express. In XX/XX/XXXX I used a new feature with the card called " plan it ''. I created a {$1000.00} plan, which had no interest and a small monthly fee. The fee was projected to be around {$85.00}, which is less than the interest that would have accrued. I selected a 6 month plan and my monthly payment for the plan would have been about {$180.00} a month. 

In XX/XX/XXXX and XX/XX/XXXX I used the card several times and had charged over {$2000.00} on the card. In XX/XX/XXXX I had a {$100.00} credit applied to the account and then I made a {$800.00} payment on XX/XX/XXXX. Then on XX/XX/XXXX I paid my attorney bar fee in Illinois for {$390.00} and bought two {$100.00} gift cards. Knowing I still owed money and had just charged these amounts, I made a {$1000.00} payment on XX/XX/XXXX. 

It should be noted that next to every charge that was under {$100.00} on my American Express app, there was a box next to it that said " pay it ''. Next to the other amounts was a box named " plan it ''. Thus according to my account, it appeared I could make payments to " pay it '' to lower my interest accruing account. 

After I made the {$1000.00} payment I thought I would owe {$660.00} on the revolving credit in XX/XX/XXXX and {$870.00} on the plan with 5 more payments to go, interest free. 

Instead, American Express took {$470.00} of the payment ( which was the over payment of my current adjusted balance ) and prepaid the " plan it '' feature instead of paying on the revolving account. The reason they did this is due to the fact that my " adjusted balance '' from my previous bill was showing {$0.00} even though I had charged a significant amount since the last bill. 

The end result of this is, my " plan it '' is now down to {$400.00} with 3 monthly payments left rather than {$870.00} with 5 monthly payments left, and I have an adjusted balance due in XX/XX/XXXX of {$1100.00} rather than {$660.00}. I had intended to pay the {$660.00} off easily in XX/XX/XXXX and not incur any interest on the charges. But now the only way for me to do so is to pay {$1100.00}. 26 which I am not sure I will be able to do, plus the monthly plan it of {$130.00}. Thus, instead of paying {$830.00} next month, I will have to pay approx {$1200.00} to avoid interest. 

Clearly, this is not what I intended. No consumer would willingly prepay non-interest bearing accounts prior to paying interest bearing accounts. 

I spent 1 hour and 1/2 on the phone on XX/XX/XXXX with three separate agents, the last one being a manager. I explained to them that this practice is deceiving and in my mind it is illegal. I informed them I am a XXXX. They informed me there was nothing they could do. They were willing to refund my over payment of {$470.00} but the " plan it '' feature could not be brought back to 5 months and I would then owe {$870.00} over 3 months instead of 5, which would double my monthly payment. 

I read the information that was provided to me when I set up the Plan it feature. I did not see anywhere in that literature that clearly stated if I had no adjusted balance showing, any payments for pending or new charges would go toward the Plan it account rather than the revolving account. 

My point is this, it is highly confusing and deceptive to a consumer for American Express to list next to each charge on the consumer 's account, under {$100.00}, that they can in fact " pay it '' when, if they do try to pay it ( when there is no adjusted balance showing ), the payment will not go to new or pending charges but instead will go to the Plan it feature thus paying off the non-interest account early. 

This is deceptive because an average consumer is being invited by American Express to make " pay it '' payments when in fact the company is aware that any payment made will not pay interest accruing charges but instead pay non interest accruing plan it account. 

Now I am facing either paying interest on the {$470.00} or making a much larger payment in XX/XX/XXXX than I had budgeted. 

In addition, American Express informed me that " their system '' was not set up to adjust the Plan back to 5 months once the over payment was received. I said several times that since this practice is deceptive, they need to find a way to program their system so that it can reverse situations like this. But they were not interested in fixing the system. Instead they wanted to " educate '' me so that in the future I would not make this mistake. 

In addition, I suggested that they do away with the Pay it feature all together since that feature is what is causing the confusion. Moreover, since the pay it feature does not actually go to any specific transaction, why even have a pay it feature. All it is really, is a small payment made each time you purchase something. You can do that by just making a payment as well. There is no benefit to the pay it feature, yet there is a great deal of confusion surrounding the pay it feature because it invites consumers to make payments for specific transactions when they are not able to actually pay off that transaction in certain circumstances, like the one I described above. 

Furthermore, American Express told me that all this is fully explained in the terms and conditions online for the plan it feature. I did read over the terms and conditions and I disagree that it is clearly stated. You apparently have to go to another document called Card member Agreement to see additional information to learn how they apply over payments. 

Nevertheless, the law is very clear that a business can not bury information in small print in a consumer contract that allegedly says how the credit works, yet provide a very distinctive payment button next to every charge on the mobile app, encouraging the consumer to pay small payments on their account. This is very problematic when, as in my case, there is no adjusted balance because the consumer can not make the very payment that the credit card company is inviting them to make. That is the definition of deceptive practice.

Company response to consumer: Closed with monetary relief