Compound Interest - Can They Charge It?

[WinOrLose]

Does anyone know how you tell if a credit card company is allowed to charge compound interest.

 

In this case of Armstrong vs Amex, Amex agreed to drop all the interest charges because the contract didn't allow for compound interest.

 

This would probably mean they owe me money on many of my cards!

[nicklea]

It depends on the terms of the agreement. I would suggest that, that case revolved around the particular terms of that card and is not necessarily relevant to any other cards that might have different conditions. Indeed, even in that case, one of the other Amex cards that the debtor had was treated differently and was not involved in the appeal

[WinOrLose]

Yes I understand that it will depend on the terms of the agreement. But what form of words does the agreement need for it to either incorporate compound interest or not.

 

I have looked what agreements I can find on CAG and have noticed that the more recent ones explicitly state that interest can be charged on balances due to interest. Does this mean that if that is not specifically mentioned in the contract then it cannot be charged?

 

I know I have many contracts where they have charged compound interest but they do not mention charging interest on interest balances.