Should You Pay a Charged Off AMEX Account?

AMEX, also known as American Express, is a bank holding company that issues credit and charge cards to people around the world. American Express cards are carried by consumers, small business owners and corporate employees. The person whose name appears on the account usually is responsible for payment, even if the card is issued through a company. Charge-offs on American Express accounts occur after several months of missed payments. However, the charge-off is only for internal accounting purposes, as the account is closed and placed for collection. The account holder remains responsible for the debt after the account is charged off.

Many people feel a moral obligation to pay a charged-off American Express account. The company is known for outstanding customer service, and provides account holders with a variety of benefits. A charge-off on the account causes American Express to lose money if debt collection efforts are not successful. American Express encourages customers with charged-off accounts to pay the bill in order to end collection efforts.

The threat of a lawsuit is another good reason to pay a charged off American Express account. State statute of limitation laws limit how long American Express and other companies have to seek civil judgments for unpaid debt, but the average is about six years. After that the debt is considered too old for consideration by the court system. Some people may elect not to pay charged off American Express accounts that are beyond their state's statute of limitations. Other collection efforts, such as letters sent through the mail, can continue, but without the threat of a lawsuit American Express has few resources for collecting an old debt.

American Express reports to the major credit reporting bureaus, with charged off accounts listed on credit reports. Charge-offs are considered a very negative credit event and cause significant damage to credit scores. However, the impact lessens as the listing ages, and negative credit information is removed from credit reports after seven years. Some people may feel no incentive to pay a charged off American Express account that is beyond their state's statute of limitations and is no longer appearing on credit reports.

Some people may elect to pay an American Express charge-off after taking a new job -- even if the old debt is no longer eligible for court action or is listed on credit reports. For example, the new employer may expect certain employees to apply for corporate American Express cards. However, an unpaid account from a previous charge-off makes the employee ineligible, possibly causing embarrassment as well.