a few cracks are appearing in American Express

Talk about playing hardball.

The Associated Press is reporting that American Express will start stripping  the frequent mileage/frequent stay points any co-branded card users earned that month if they don’t pay the bill on time. The new rule will affect Delta, JetBlue, Hilton Hotels and Starwood Hotels accounts.

It is possible to get them back, of course — for a $29 reinstatement fee on top of your late fee and penalty interest rate.  That’s a steep price to pay for a mistake. (And what’s with the odd number? It looks like a retail psychology ploy to keep folks from getting pissed you charged them $30.)

“I think over the course of time, people miss a payment at least once because of unforeseen circumstances like something getting lost in the mail or a long vacation taking your focus off making your payments,” John Ulzheimer, president of educational services for Credit.com went on record saying.

American Express’ spokesperson is calling this a way of incentivizing good behavior by essentially spanking you for bad habits. Other credit card companies are simply calling it harsh  — although they don’t dare say it that bluntly. Even as they look to solidify profits in front of the February 2010 federal rules prohibiting certain fees and interest rate, that‘s not on their radars, they point out.

• Citi: Pay late one month and the associated points might not be available for redemption until the traveler and credit card company settle the bill. But so far, American Airlines and Hilton cobranded card holders are safe from reinstatement fees.

• JP Morgan Chase: Blow off paying the account on your cobranded United card and you won’t earn new points until you settle the balance.

Delta is on record as being OK with this, and early feedback from consumers at blogs is a shrug. Not paying your bills on time still lands in “socially unacceptable” category in general … except when it’s your payment that’s on the wrong side of the deadline, of course. But is it a bluff? Selling airline miles to partners creates a $5 billion a year profit flow for that industry — and like Ulzeheimer says, everyone misses a payment now and then. Taking away their points could eventually wash back to hurt the travel companies themselves.

It certainly isn’t taking anything off the table for American Express, unless card members decide to throw in their plastic and move to a different dealer.

Photography: pheezy (Flickr.com)