American Express Clamps Down on Churning

American Express Clamps Down on Churning

Have you applied for an American Express card just to earn the sign-up bonus before? If you have, or have ever considered it, you might want to tread lightly going forward. American Express has added to their terms and conditions to discourage this type of behavior for some credit cards, with the possibility that others will follow. If they decide that you’re a churner, it’s not going to be pretty!

American Express already had a pretty restrictive policy for determining whether or not a person is eligible for a sign-up bonus. Basically, if you have ever gotten a particular credit card before and earned a bonus, you are not be eligible to earn it again. In other words, you get a sign-up bonus for a credit card once in a lifetime.

Prior to that rule being implemented, bonuses were available to people who had not carried the card in the prior 12 months. The once-per-lifetime rule was indicated in the terms and conditions for credit cards, though occasionally targeted offers would bypass the restriction.

American Express has recently added the following to their terms and conditions on some credit cards:

“If we in our sole discretion determine that you have engaged in abuse, misuse, or gaming in connection with the welcome bonus offer in any way or that you intend to do so (for example, if you applied for one or more cards to obtain a welcome bonus offer(s) that we did not intend for you; if you cancel or downgrade your account within 12 months after acquiring it; or if you cancel or return purchases you made to meet the Threshold Amount), we may not credit bonus miles to your account. We may also cancel this Card account and other Card accounts you may have with us.”

American Express has recently added new rules to the credit cards terms and conditions

Let’s break it down into the three things American Express doesn’t want to see you doing:

  1. If you apply for a card through a link that was not sent to you, you may not get your bonus miles or you may have your accounts closed. Recommendation: only apply for cards through links that are public or were targeted to you. For example, do not apply for a card through a link that was emailed to someone else or an otherwise better-than-public offer that you randomly find on the internet.
  2. If you cancel or downgrade your account within 12 months, you may not get your bonus miles or you may have your accounts closed. Recommendation: don’t cancel or downgrade your account within 12 months. Most credit cards will allow a grace period on the annual fee, so even if you keep your card a few days longer than 12 months you won’t be on the hook for the second year annual fee. If a card really isn’t for you, American Express probably won’t penalize you for downgrading your card after 11 months, as long as you’re not doing that to every single card you ever get. More likely, American Express is using this language to target people who apply for a card, earn the sign-up bonus right away, and cancel the card as soon as they have earned the bonus.
  3. If you cancel or return purchases that were used to meet your minimum spending requirement, you may not get your bonus miles or you may have your accounts closed. Recommendation: Make sure that any purchases you plan on counting toward your minimum spending requirement are not things you will need to return. If you think you might need to return something, make sure you hit the minimum spending requirement without that purchase just in case. Of the three things pointed out, this is the one that American Express has been enforcing for the longest time.
Apply for American Express cards only through links that are public or were sent to you
Apply for American Express cards only through links that are public or were sent to you

American Express was already doing many of these things informally. Now they’ve made it official. In 2016 there was a 100,000 point offer for the Platinum Card® from American Express that was not intended to be public but many people applied through the link. Nearly everyone who applied through that link had all of their points frozen for at least six weeks. Many people (including myself) had the sign-up bonus taken away from them. Most of the people who managed to keep their points had not had another Amex Platinum card of any type previously and did not spend money on any gift cards to help meet minimum spending requirements.As of now, this new language isn’t on every American Express card, in fact, it has only been added to the Gold Delta SkyMiles® Credit Card, but there is a possibility that it will be added to more cards as time goes on.

Ultimately, it shouldn’t make a huge difference in the long run. American Express offers some pretty strong credit card products so you should continue to evaluate the cards based on the benefits you’ll get out of them, including the sign-up bonus, and just know that Amex is cracking down on the gamers.

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