Reward Penalties

It’s bad enough getting hit with a fee, and possibly a higher interest rate, for making a late payment on your credit card, but many card issuers may also take your points or air miles and hold them hostage, or worse, cancel them. Diners Club is the latest card issuer to make its “Club Rewards” points subject to forfeiture for missing the payment deadline. Effective with the July billing cycle, cardholders will forfeit points if they fail to make the minimum payment within two billing cycles of the statement date. Diners Club offers a 55-62 day grace period on card charges, a major advantage over other credit or charge cards in the USA. But if you pass the two-month cut-off date, you’ll get hit with a hefty late fee of 2.5% per month on the unpaid portion plus a $30 fee. (Diners is also jacking up the late charge from $20 to $30, effective July 1st.) Diners will reinstate the forfeited “Club Reward” points if the cardholder brings their account current and pays a $15 fee for each billing period of points missed. American Express also imprisons or cancels “Membership Rewards” points for delinquent cardholders. Other popular reward programs such as “Citibank American Airlines AAdvanatge” and Bank One’s “United Airlines Mileage Plus” have similar penalties for late paying cardholders.