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Cardmember Agreement - Terms and Conditions

What to know about your Cardmember agreement and credit card terms

Curious to know what’s in your credit card agreement and how you can use the information to your advantage? Knowing your credit card terms makes you more aware of key card benefits and regulations, which in turn helps you be a more informed borrower and may even save you money. Learn more about what your Cardmember agreement is and how to use it below.

What is a Cardmember Agreement?

A Cardmember Agreement is a credit card contract between you and a card issuer which outlines your obligations to each other. You will have a separate Cardmember Agreement for each account you hold. Your Cardmember Agreement with American Express has two main parts.

  • Part 1: One-page summary of credit card terms and conditions that apply to your account, including an explanation of interest rates (and penalty interest rates) and fees for your Card account
  • Part 2: Information about your account relationship with American Express (Using your Card, Paying for your Account, Interest Charges, etc.)

If your Card offers a cash rebate or reward feature, you may also receive a supplement explaining these benefits.

How should I use my Cardmember Agreement?

After reading your Cardmember Agreement and sharing it with any additional Cardmembers on your account, file it in a safe place so you can reference it if you have a question about how your account works. If you do not have your original Cardmember agreement, you can log in to your Card Account to order a copy.

Thinking about applying for a new Card? View Cardmember Agreements for all the Cards we currently offer.

How to Read Terms and Conditions

When you sign up for a credit card, you agree to the terms and conditions that govern the account. These are outlined in your Cardmember Agreement. Like any business agreement, it is important to review this credit card contract so you are clear about your roles and responsibilities. Below is a glossary of credit card terms to help you better understand what you are being offered and what is expected of you:

  • Annual Fees: Common card usage charges (not present on all cards). Fees could be up to several hundred dollars for a card with elite travel services, rewards programs or other consumer benefits. Annual fees are common on charge cards, rewards cards and airline miles/hotel credit cards.
  • Annual Percentage Rate (APR) for Purchases: The annual, standard interest rate you will be charged for purchases you make if you carry a balance from month to month. In addition to the APR for purchases, there are usually different APRs for balance transfers, cash advances and delinquent payments.
    • Fixed (Non-Variable) APR: An annual percentage rate that is fixed for a stated period of time. Unlike a variable-rate APR, this interest rate does not change if the prime rate changes. However, the initial rate extended to you may change based on your credit actions. You will be notified of any increase or decrease of your interest rate.
    • Introductory APR: This is the interest rate that is in effect for a temporary period of time. Typically, an introductory APR is less than the standard APR and is in effect for six months to a year. After the introductory rate expires, a new standard APR goes into effect for your account. Be sure to review what the standard APR will be before signing any credit card agreements. 
    • Penalty APR: An increased interest rate for a given card product based on the poor credit practices of the Cardmember. If you pay your credit card late or bounce checks, this rate may be applied to your account. Unless you are 60 days late, the new rate can't be applied to your balance—only on new purchases and transactions you make on your consumer credit or charge card.
    • Variable-Rate APR: A variable interest rate means your APR may be adjusted over time, without advance notice. A variable-rate APR is determined by the Prime Rate plus a stated number of percentage points. There's generally a footnote on your credit card terms and conditions with an explanation about how prime rate is determined; typically it is the highest prime rate published in The Wall Street Journal on the last business day of the month.
  • Arbitration: A form of dispute resolution that is often binding with no right to appeal. It may prevent you from suing the company or joining class action lawsuits. Many credit card companies offer to arbitrate on your behalf to resolve issues. You may be able to waive this right in your credit card contract.
  • Balance Calculation Method: A method by which interest on your balance is determined. American Express uses the "Average Daily Balance" method (including new transactions) to calculate the interest on your account each month. Other calculation methods include the Daily Balance Method, Adjusted Balance Method, Previous Balance Method, and Average Daily Balance (excluding new transactions).
  • Balance Transfers: Shifting expenses from one credit card to another, effectively paying off the previous balance on one card with the new card. This practice is usually done to take advantage of a lower, promotional APR on a new account. However, while the interest savings can be significant, it is important to read the terms and conditions of the new credit card. Some cards have a minimum amount you are required to transfer, but you are also restricted to only transferring up to the new card’s limit, which may not be equal to the balance on your current card. You should also keep in mind, the balance transfer APR may differ from the standard APR for purchases, and credit cards may charge fees for balance transfers.
  • Cash Advances: Using your credit card to take money out of an ATM. Typically, a fee is assessed at the time of the withdrawal and the withdrawal is charged interest at a higher APR than the standard APR for purchases. You will also be charged interest immediately until the advance is repaid.
  • Convenience Checks: Checks linked to your credit card account. They can be used to transfer a balance from another card or to make certain purchases or payments.
  • Daily Periodic Rate: Your APR divided by 365 days.
  • Foreign Exchange Fees: When you travel abroad and make purchases with your card, the card issuer will automatically convert your purchases from the local currency to U.S. dollars on your bill. Most card companies exchange money at rates that are more favorable than what consumers would get on their own. You may, however, incur a charge on each purchase for foreign currency exchange. Fees vary from card to card and will be outlined in your Cardmember Agreement.
  • Late Payment Fees: The amount you will be charged for paying late or missing a payment altogether. Generally less than or equal to your monthly minimum payment.
  • Minimum Finance Charge: This is the minimum amount of interest you will be assessed if you carry a balance on your credit card.
  • Minimum Monthly Payment: The minimum amount you are required to pay the credit card company each month. You will be assessed a penalty if you pay less than this, and your credit could go into default if you are unable to resolve the issue quickly (within two billing cycles). Missing multiple payments will also have a negative effect on your credit score.
  • Overlimit Fees: Charges for exceeding your credit limit. American Express does not charge a fee for Cardmembers who go over their credit limit.
  • Payment Due Date: The last day payment can be accepted without penalty. Your due date will be the same date each month. You can find your payment date on your monthly statement. It may be beneficial to set up automatic payments for at least your minimum payment due a few days before the due date to ensure they are remitted in time.
  • Pre-Approved Status: Some consumers are "pre-approved" for credit based on information the issuer obtained from credit reporting agencies and other sources. However, your credit profile is continually evolving. As a result, in some instances, a pre-qualified offer can still be denied.