American Express Seeks Faster Payments

NEW YORK -- Hoping to curtail rising delinquencies, American Express Co. has changed the way it bills holders of its charge cards.

The company has recently begun to include on its monthly statements a date by which payments should be mailed. But the "please pay by" date is about two weeks before payment must be received by American Express to avoid past-due status.

Previously, American Express statements simply said "payable upon receipt."

Just a Suggestion

An American Express customer service representative working at the company's toll-free hot line explained that the payment date now included on bills is a "suggested" date rather than a firm due date. The date is significantly earlier than the actual payment deadline, she said, to compensate for the slow mails.

A spokeswoman said slow mail delivery was a big reason for the change. The new dates will get payments to the company before the account is 30 days past due, she said. "We're notifying the customers at what point their payment becomes past due," she added. "In the past, a lot of them said they did not know."

Addition to Reserves

Like most companies that receive many payments by mail, American Express uses a lockbox service to speed its access to remitted funds. Lockboxes -- actually post office boxes -- are usually in cities with the quickest mail service.

According to the spokeswoman, American Express implemented the due-date policy a couple of months ago. In April, the company said it was adding $50 million to its reserves to cover loan losses. Many of those losses occurred at the travel-related services division, which runs the company's card businesses.

The division reported a 25% decline in earnings during the first quarter, which it attributed to the Persian Gulf war and the recession.

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